New Builds vs. Existing Properties: Which Is Better? — As a property investor, your primary wealth-building vehicle is the real estate assets in your portfolio. Strategically refinancing these investment properties can help maximize your returns and overall portfolio growth.
**Why Refinance Investment Properties?**
The main reasons investors look to refinance are to access equity for further investing, restructure loans and cut interest costs, consolidate multiple loans, or alter loan terms to better suit their needs.

Equity Access for Portfolio Growth

As your properties appreciate in value over time and mortgages get paid down, you build up hefty equity positions. Through refinancing, you can tap into this equity to fund deposits on additional investment properties without disrupting your current cash flow. This allows you to rapidly expand your portfolio using existing assets.

Lower Interest Rates

Market rates fluctuate over time. When interest rates drop meaningfully below your current rate, refinancing can radically lower monthly costs and free up cash flow on your existing investments. Some may worry about lender fees, but these refinance expenses can be dwarfed by the long-term savings of a lower rate. The savings can then be reinvested into your property to enhance its value, such as making necessary repairs or upgrades that can attract higher-paying tenants.

Consolidate Loans

As you acquire more properties, you may end up juggling multiple mortgage payments across various lenders, loan types and payment cycles. Refinancing presents the opportunity to consolidate this portfolio debt into fewer streamlined loan facilities, ideally at highly competitive rates.

Flexible New Loan Terms

The nature of your property investing strategy and cash flow needs to evolve over time. What made sense earlier may require adjustment. Refinancing allows you to alter mortgage terms including interest-only periods, offset accounts, redraws, extended loan periods and more. The right features maximize your wealth trajectory.

How to Maximize Refinance Returns

To ensure refinancing enhances your portfolio, scrutinize lender terms and calculate potential outcomes. Some key considerations:

Fees and Break Costs

Refinancing always incurs some fees and may trigger break costs for ending loans early. Calculate fees alongside rate savings to assess the true benefit over your intended holding period.

Equity Remaining

Lenders have borrowing limits based on the property value and your income/assets. Refinancing can't always fully extract all equity. Your broker can help with running the numbers to optimize the equity released.

Income Documentation

Lenders require proof of income, assets and rent to qualify you for new loans. Having all records organized makes for a smoother process.

Property Value Updates

Refinancing is an opportunity to get current property valuations which may increase the equity available if values have appreciated from your original purchase price. Your broker can order an upfront valuation for you before proceeding with a refinance application.

Depreciation and Tax Impacts

Check with your accountant about any potential tax impacts of refinancing including restarting depreciation cycles. Maximize tax efficiency across your portfolio.

Teaming Up with Investors Mortgage

Navigating the refinancing landscape for property investors involves an intricate balance of finances, tax impacts, and wealth creation objectives. Our seasoned Investors Mortgage team are specialist in this space. We can provide personalized analysis detailing the true costs and benefits of any refinance proposition. We'll align ideal loan products and equity positioning with your specific strategic direction.

Contact us today to develop and execute a refinancing plan that catapults your portfolio's growth and financial performance. Let's unlock maximum wealth potential together!

Spread the Word