Successful property investment is not just about what you own now in the short term, but also what you hold onto over the long term. The means that any investment be it property or anything else has some level of risk attached. Property investors frequently borrow money to obtain an asset like a house. Protecting this asset should then be a top priority. To ensure you still have your investment in the future you should take precautions to ensure that unforseen circumstances don’t get in the way of your investing goals
Cash-flow:
Ensuring that you are in a strong position to deal with any short term changes in cashflow is a must for investors. This can take a number of forms. Cash buffer: ensuring you have cash on hand
Redraw loans: lines of credit or an offset account which can be called on.
Insurances:
Most investors at least at the start need to retain a job to provide for themselves and their family. Ensuring that should your ability to earn income be jeopardised, you and your family can still maintain your lifestyle and importantly hold on to your investments is a important part of investment planning. Income Protection Insurance: This insurance pays a monthly benefit amount when you are unable to work due to disability, accident, injury
Life Insurance:
Pays the beneficiaries of the policy a lump sum on the death of the insured, this enables the family and dependants of the loved have options without additional financial strain.
Total permanent Disability Insurance:
This pays a lump sum to the insured where you become disabled and are not able to work.
Other insurances relate to your property portfolio more directly, these include.
Landlord Insurance:
This protects your property commonly insurable events are
Burst pipes, leaks and overflows of liquids from pipesBreakage of fixed glass
- Damage by animals
- Earthquake and tsunami
- Explosion
- Fire
- Impact
- Damage by tenants or their guests
- Vandalism
- Riot
- Storm and flood
- Theft by tenants
- Theft
- Lightning
Summarising
* Long term success in property investment is about holding onto your assets over the long term.
* Protection of your self and your earning capacity is important
* Protecting the assets you acquire is also important.