Mortgage rates are the lowest we have seen in 50 years and there is little chance of significant interest rate rises in the near future. Now is a great time to review your position and make plans for your property portfolio.
Labour’s KiwiBuild plan is one of the dumbest ideas I’ve heard of in a long time to reduce the price of houses. Gifting money to first home buyers would create significant momentum for another housing boom once the equity can be utilised for further borrowing. It’s such basic economics that you have to wonder if it’s a cynical vote-buying trick to have a shot at getting back into Government in 2014.
Don’t assume that just because you’re talking to a Chartered Accountant that they know more about property tax than you do. Over the years, I’ve been surprised at how little some accountants grasp the most important aspects of structuring entities for property investment or even the basics of property investment itself.
This would normally be a clear indicator of interest rate hikes to come in double-quick time but the first sentence of this article doesn’t make sense to me. Fuel, food and power are basic necessities. We’re not even in control of these price rises, so what would be the point of raising interest rates? It’s not like people are rushing out to buy tomatoes at $12/kg because they are rising in price! I’m not extending my mortgage to invest in bananas for my retirement!
If you’ve never had any problems with banks or believe that if you always pay your mortgages, you will be ok, don’t be so sure. I know many investors whose relationships with their lenders suddenly turned sour even though they had strong cashflow and had not missed any mortgage payments. Some were shocked to learn that their mortgages could be called in at any time even though they had long term fixed rate agreements!