The possibility of an interest rates rise is something that should be factored into any investment. Rates will rise, rates will fall, and it’s important to make sure you’re not adding unnecessary risk to your property portfolio when these changes occur. Here are 3 tips to keep you and your portfolio prepared.

Calculate Your Cash-Flow

When investing, work out your repayments at a higher interest rate than what is currently being charged. This will give you a clear idea of whether you can afford the repayments if they go up. Do this to whatever percentage you are comfortable with.

Have A Buffer

Make sure that you allow a big enough buffer to cover yourself if interest rates rise. A way to do this is by buying below market value and making sure you always leave some equity in the property. It is also important to have that rental cash-flow coming in to help service the loan. Investing in properties with neutral cash-flow that will turn positive as rents increase is a good place to start.

Know Your Plan B Or Exit Strategy

Take the time to put in place a Plan B (or more) and your intended exit strategy that you can fall back on without putting yourself at financial risk. Although major interest rate rises are not currently being predicted, it is always better to be prepared in case the tables turn. This will give you greater peace of mind when making your next move and assist you to safely grow your portfolio.