As an Investor, it is vitally important that you continually review your properties and your finances to make sure you are maximizing your returns.
It is important that your properties are working as hard as possible and that your money is working as hard as it can and that you are seeking the right advice.
Here are 3 RealRenta tips to ensure that this is happening:
•Maximise returns from your properties
Rental income is the bread and butter of your investments.
It offsets your loan and expenses so it is essential that it is generating the maximum amount of income for you.
Reduce your property management costs by Self Managing and keep on top of the market rental prices, by conducting annual appraisals.
Build equity and generate cash flow through improvements like painting walls, new benchtops, cupboards, landscaping etc.
Improvements allow you to review and potentially increase your rent, thus boosting your rental yield immediately.
Evaluate mortgages regularly so you can take advantage of fluctuating interest rates and deals from lenders.
•Is your money working as hard as it can?
If you are mortgaged to the hilt and there is a market slump or if you struggle to find tenants, do you have a cash buffer to keep you buoyant?
At a minimum, you should have enough cash to cover any shortfall between mortgage repayments and rental income for 6 to 12 months and also, enough money to cover property expenses for a year.
Use all your income, savings and buffer to reduce interest on your personal home loan by linking it to a Line of Credit or Offset account.
Your combined cash is calculated as a repayment on your loan reducing the overall amount that the interest is applied to.
The earlier you begin offsetting your loan with your income and other funds, the less interest you will pay in the future.
•Get advice from the right people
Many investors try to manage finances and tax on their own but if you’re not 100% certain of what you are doing, this can lead to missed deductions and/or miscalculations.
It is a good idea to find an accountant with experience in property investing, who will be able to guide you through the process of claiming all legal deductions, whilst also keep on top of all depreciations schedules, which must be drawn up by a Quantity Surveyor.
A good mortgage broker and property strategist will help with the initial purchase and with annual reviews of your portfolio. (Contact us @ firstname.lastname@example.org for more info)
The fees incurred when engaging these experts are generally tax deductible and smart investors understand that their advice can be invaluable.
Saturday, 15 September 2018