Organising your money. The key to being successful and creating wealth through property investing is being in control of your finances. Once you have total control over your income, personal mortgage, debt and savings you can begin your journey into investment property. Separate your life from your investments, look at your investments as a business and put on your business hat when dealing with them.
Buy new – not old. Receiving tax deductions from depreciation is a big factor in this – but you also have the benefits of attracting a better quality tenant and increased cash flow. Over the years the constant maintenance and repairs on an older property drains the cashflow – holding back your ability to buy further investments.
Interest only. Interest is tax deductible, principle is not. It is easier to manage your investments if you minimise payments during the ‘negatively geared’ period. As the property increases in value, the rent follows suit. This means that the property will become ‘positively geared’ and then the additional rent payments can begin to reduce the investment debt. It’s all about the timing and maximizing the tax deductions.
Wait as long as you can – or just don’t sell. History says that your property will increase in value by up to 10% each year. By purchasing and holding onto your property you only pay stamp duty, bank and legal fees once and you pay no commissions, government costs or capital gains tax. You then can use the equity of that property to purchase an additional investment. If you sell with the intention of buying another investment you both maximise the costs and minimise the profits by wasting funds on the above mentioned expenses.
For any further advice or to have an informal chat about your investment options call Chris now on 0434 449 455 or shoot us an email at firstname.lastname@example.org