1 – 31 AUGUST 2023

Maximise your money in your 40s: 14 – 18 August

Day 2:  Owning a second property

Now that you are in your forties, you may be focused on getting rid of your mortgage as soon as possible, however, have you considered the alternative of owning a second property?

Challenge yourself to think ahead with this top tip from our expert mortgage adviser Hamish Patel from Mortgages Online:

Owning a second property vs paying off your mortgage

Evaluate whether investing in a property as a rental income source aligns with your long-term financial goals. It’s essential to weigh the potential benefits of rental income and property appreciation against the risk and responsibilities of being a landlord. Alternatively, focus on paying off your primary mortgage faster to reduce interest payments and achieve debt-free homeownership.

If you have a stable income, a comfortable emergency fund, and a high-risk tolerance, a rental property might be a worthwhile option to explore. Investing in a second property may be an appealing strategy for building long-term wealth as it can generate a steady stream of passive income providing financial stability and a supplementary income. Historically, real estate tends to appreciate over time leading to potential capital gains in the long run, and owning multiple properties can diversify your investment portfolio reducing reliance on a single asset.

On the other hand, if your primary goal is financial security and peace of mind, accelerating mortgage repayments to achieve mortgage freedom could be the path for you. Once the mortgage is paid off, the money that would have gone into mortgage payments can be redirected towards other savings and investments without needing an initial capital outlay, the hassle of tenants, property maintenance and potential market volatility.

Regardless of the choice you make, seeking professional financial advice and conducting thorough research is crucial. Remember that each person’s financial journey is unique, and finding the right balance between investing and debt repayment is key to achieving your financial goals.

Top tips contributed by:

Hamish Patel | Mortgage Adviser
Ph 09 625 4693

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