house moneyAs I mentioned in the last blog, a cash buffer is something that will buy a property investor time. Maintaining a large cash buffer is the main strategy to deal with risks such as, interest rates fluctuating, unforeseen maintenance problems, and/or rental vacancies. Now, these are unfortunate and they will occur to some extent, BUT we cannot let them deter us from investing in property. So we invest smartly.

One way of investing smartly is by maintaining a large cash buffer. One way of doing this is to establish a bank account, such as an off-set account against a mortgage or a line-of-credit, and make sure you have some cash in there. Throughout the year you can use that cash to pay for unforeseen expenses, and then come tax time, when you get your big property investors’ tax return, top the buffer up again.

Too many inexperienced property investors go out and buy as many properties as they can and leave no cash in reserve. They soon get caught out and have to sell a property or even default on a mortgage. Don’t let that happen to you!

So, do you see how important a cash buffer is? If you’d like me to explain this in more detail, help you initiate YOUR cash buffer or guide you so that you invest in property the best possible way for you, then let me know! Call my team on 1300 372 677, book an appointment with me, and we’ll sit down and talk about your property investment plan, goals and everything in between. I swear you have nothing to lose and everything to gain!

 

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