Pay Off My Own Home or Buy Another?
I love this question and it comes up like clockwork when we have a client complete their first property. What do I do now? Where to go from here? This is a very common feeling.
Well, it may sound cliché but it is based off many factors that will always be personalised to you. Everybody is different and when we hit this part in your journey weighing up your financial stability, investment goals, market conditions and personal circumstances are always going to be the key indicators for the answer to that question. So, what do these 4 sectors actually contain? Let’s look a little deeper into what they could be.
Settling your mortgage can offer peace of mind, anchoring a stable budget. Having only one mortgage is especially crucial when a substantial pay off amount is outstanding. If you’ve accumulated cash reserves or equity, consider utilizing them to pay off your mortgage or venture into an investment property. Investment properties bring substantial tax benefits, a notable advantage over your primary residence.
These decisions align with your investment goals, whether aiming for mortgage freedom or leveraging assets for a diversified portfolio. Striking a balance is key, ensuring strategic financial moves that align with your aspirations. Evaluate the advantages of paying off your mortgage versus expanding your investment portfolio, making informed choices for a secure and prosperous financial future.
If your goal is to build wealth and generate passive income, investing in another property might be a good option. However, it’s important to ensure that you take the time and engage a team of professionals to assist you with this venture. You are not buying a happy meal at McDonalds; you are securing your future. As mentioned, there are also tax advantages as it is classified as good debt.
Good debt is debt that is pay off tax deductible. This is what an investment property can provide. As long as it is the right property for you, it should grow in value over time and generate you a passive income.
Sounds pretty bloody good doesn’t it..
Ensuring that you engage a team of qualified professionals to ensure that the market conditions are favourable to re-enter. Strike Property has their Target Location Pyramid which allows a detailed assessment for the location of your investment property. Location is paramount.
Consideration to your own financial situation, including your income, expenses, and financial horizon. If you have a trip planned to Europe or about to have a child, you will need to factor all these into your decision. Make sure you have enough resources to both pay off your mortgage and invest in another property if that’s what you decide to do.
Ultimately, the decision between pay off your mortgage or investing in another property is a personal one that depends on your individual financial goals and circumstances.
Personally, I am a firm believer that you need to have a debt free home at the end of your working life. Though something also needs to pay for the bread and milk…
This blog is for general information only. It should not be taken as constituting professional advice from the presenters from Strike Property. Strike Property is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this website. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances.
For more information you can visit: www.strikeproperty.com.au