Ok, so after the 14th consecutive interest rate rise this month, you might be wondering where that leaves your investment portfolio. But let’s not panic. We’re sure you’ll know by now that changes to the Bank’s Base Rate will eventually impact how much interest you’ll pay on your mortgages. If you’re on a fixed-rate deal, your monthly payments won’t change until the end of your deal. However, if you’re on a variable or tracker mortgage, your payments will almost certainly go up.
If you’re coming to the end of your fixed-rate mortgage soon, you’ve probably already started to think about the rate you’ll be offered on your next deal.
This is why it’s so incredibly important to understand your portfolio, your position, and any potential pain points.
When should you assess?
Ideally, you want to be assessing your whole portfolio quarterly. Now is a great time to take a look and see where your portfolio is heading for the remainder of the year.
What should you be assessing?
In short, you want to be assessing the performance of all the assets within your portfolio, as a whole. Assess whether you have any BTL or HMO mortgages that are coming to an end and if so, start the process early and understand where the new figures might leave your wider strategy. Some things like development loans or project budgets you might want to assess on a more regular basis.
We’re facing many economic challenges at the moment as property investors so it’s key to understand exactly where your portfolio is at. We’ve said it time and time again, the key to being successful in property it being able to identify risks and adapt your strategies accordingly. Having a diverse portfolio of BTL’s, HMOs, development projects etc. is an ideal way to spread risk.
What you need to know
Again, at risk of stating the obvious, the economy is making investing a little trickier than it has been for a few years. But this is no reason to be intimidated. The cost of goods, services and lending has all increased but so has demand for rental properties, shared living and commercial to resi conversions! Make sure that when you’re forecasting or stacking deals that you’re taking these increases into account. That way, you’ll have no surprises further down the line.
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