It can be easy to form tunnel vision when buying a residential investment property. While you focus on things like cash flow and capital gains, you might forget about other areas of your financial life that are equally important. This means making sure all the right structures are in place to protect your assets and provide for your family. After all, you never know what's just around the corner, so it's a good idea to check all these things off your list.
Estate planning
Now that you've got an investment property in the mix, have you thought much about what will happen to the income you earn from it? Sure, it's hard to think too far ahead, but a little thought now can pay off in the long run.
Estate planning means making all the arrangements so that your wealth is secure and passed on to the right people, and structured in the best way for tax efficiency. Wills and enduring power of attorney can all be included under this umbrella.
Ownership is another key point of property investment. The right trust structure can keep your portfolio out of harm's way if creditors come knocking, offers great tax advantages and provides for future generations.
Asset protection
When you've put so much care and attention into your property portfolio, the last thing you want to happen is to see it slip from your grasp – or your family's. This is why savvy investors never forget about asset protection as part of their wider plan.
Income protection and mortgage repayment insurance, as well as life cover, can shield your investments in case anything goes pear-shaped. There's also landlords' insurance, to protect your rental from unfortunate – and destructive – accidents!
Once you've got these things ticked off, you'll be well prepared to handle anything life has to throw at you.
Here's to your financial independence!
Daniel Carney
Authorised Financial Adviser / Investment Property Expert
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0508 GOODLIFE
info@goodlifeadvice.co.nz