Many people are cashing up to purchase investment properties in the current low interest environment. When it comes to structuring the finance needs of an investment property or property portfolio building, Chamila Suraweera at Finance Circle Group says there are three things in particular that he does to help clients on their journey of acquisition.
- Importance of understanding the client’s objectives
- Why he thinks making P+I repayments can be a good thing.
- Importance of sound advice from an accountant and a financial adviser
Knowledge and Experience
With over 20 years of experience in banking and finance, Chamila is no stranger to property investing as well as helping his clients achieving their goals as well. He knows how important it is to develop a clear understanding of why and how a client want to invest in properties.
This is something he focuses on when helping investor clients with their finance needs.
“I try to understand the client’s goals, objectives, requirements and motivations as to why they want to buy an investment property” he says.
Once he hears the client’s goals, he can use his own expertise, knowledge and experience to help him to see the bigger picture of a client. He also involve the client’s accountant or the financial adviser from the outset.
Looking to the future
He says in order to successfully help people with finance requirements, he workout their short, medium and long-term needs. It is also important to act in the best interest of the client – which is also important to cross link with the accountant or the financial advisers views.
“Most mortgage brokers follow these principles” he says.
“You’ve got to be knowledgeable and suggest things to the client however always ensure that the client is getting the advice from their trusted accountant– as mortgage brokers, we do not provide property or tax advice”
What we expect for the client to understand about property investing
We have also spoke to Andrew Osborne who operates a well-established accounting firm in Melbourne. Andrew has over 30 years of experience supporting clients with advice and sharing his knowledge on property investment.
Andrew says when helping an investor with advice, he always makes sure the client has an adequate understanding of the market before they jump in.
Anyone who wants to invest in property needs to have a good cash holding to help them deal with emergencies. For instance, if there is a delay in renting the property, our client still need to be able to cover all the other running costs of the property throughout periods of vacancy including any interest on the loan.
“It’s really important that the clients understand rental properties and consider location of their investment” he says.
“Unlike shares, the transaction costs of property are really quite high. I don’t want my client buying things that are going to give them negative equity in the future.”
He also says it can help if the client makes P+I repayments straight away where they can afford to from a cashflow perspective.
This may improve their serviceability while preventing against the unexpected trauma that can sometimes occur at the end of the interest-only period, when the client has to do a full credit application if they want to extend it.
Finance Circle Group recommends that customer seek advice from their accountants and ensure that their cash flow will be able to afford further loan payments in all circumstances.
If you have any questions or concerns please feel free in getting touch with us – NO OBLIGATION and we will help where we can.
Andrew W Osborne FIPA
A W Osborne & Associates
T : (03) 9551 7223
M : 0408 557 463
Finance Circle Group
Nirosh Weerasinghe 0401 976 188
Chamila Suraweera 0402 927 220
Shane Cross 0421 427 272
info@financecirclegroup.com.au
