Summary:
this article takes a look at the importance of
budgeting when investing in realty and who can help you establish and stick to
a budget.
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cursorily manner to just determine they are not offensive to my personal
taste. Posting the article is not to be
seen as a endorsement of any kind except I thought it was worth reading.)
Propertyinvestment can be a huge financial risk, especially to those who haven’t
established a well-planned budget. In
fact, having a well thought out budget is an essential component to owning and
keeping and investment property.
Detailed below are the reasons why you should
plan out a budget, those professionals who can help you establish a budget and some
helpful tips on how to stick to your budget.
The
Importance of Budgeting
Bad financial decisions are the root cause
of many failed property investments. People often over stretch themselves
financially, either on the sales price, or by taking out a loan that they will
be hard pressed to pay back, or by neglecting to calculate the upkeep costs of
the property. Having a budget can help you avoid all these situations.
The purpose of a budget is to help you
understand what you can afford to spend on a property and what its maintenance
costs and are likely to be. It can help you plan out and keep track of your
loan repayments, taking into account your expected profits, and how such
profits can be used to help pay off your loan and upkeep costs.
Getting
Professional Help with Your Budget
It is always advised, when thinking of investing
in property, that you seek help from a financial adviser as looming loans and
multiple repayments, combined with incoming profits, can be overwhelming.
When seeking financial advice, regardless
of whether you go to your bank, a home lender, or an accountant, it’s essential
that your financial adviser has a background in property investment. This is to
ensure that any financial advice given is tailored to establishing a budget
that is efficient and practical for investing in property.
Financial advisers, with experience in
investment property, have the necessary know-how and often use property valuationsoftware programs. They can help you organise the frequency of your loan
repayments, the property’s upkeep costs and your property’s projected profits
and exponential growth.
Seeking out good financial advice can help you
work out the most efficient and effective budget for your specific investment
property needs.
Tips
on Sticking to Your Budget
Having a great budget is only half the
battle — it’s sticking to your budget that’s really going to test your resolve!
Below are some handy tips on how to stick to and survive your budget:
1. Always keep the end goal
in mind!
It’s easy to lose
your self in the costs of day-to-day living. So, it’s handy to continuously
remind yourself of why you are keep a budget.
2. Keeping track of your
spending.
Monitoring your
outflow of cash will help you see where your money is going. This may reveal areas
in your life where you can reduce your spending and, perhaps, invest a greater
portion into achieving the goals of your budget.
3. Resist spending money on
unimportant things.
Unfortunately,
when budgeting, you have to always ask yourself — do I need this? Will this
make it harder for me to reach the goals of my budget? So it’s good to keep
your spending on things that you don’t need to a minimum.
4.
Prepare for changes in your circumstances.
Sometimes life
throws us a curve ball and we can get hit with a host of unexpected expenses,
like emergency surgery, or insurance payments etc. Changes in your financial
circumstances might require you to revaluate your budget. This is why it is
also good to be careful with your spending on unnecessary things. It’s better
to have extra cash saved just in case the unexpected happens.
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