If you have purchased an investment property you will want to make as much profit from it as you can. The best way to do this is to cut your costs, as the best Campbelltown mortgage brokers will tell you. But the challenge is not to upset your tenants.
Good Advice from Campbelltown Mortgage Brokers
The five best ways for investment property landlords to cut their costs are to:
- Get a better mortgage deal that costs less and improves cash flow,
- Consider buying your investment property using the superannuation option,
- Take maximum advantage of property depreciation,
- Don’t cut corners when it comes to repairs and renovations,
- Ensure that your property is properly managed.
Reconsider Your Mortgage Options
Switching to a different, better mortgage option is a good way to save on your investment property. In fact this is one way that landlords save money relatively instantly. There are a number of very competition mortgage loan options that include fixed-rate loans, and there are also lenders that specialise in “investment loans” that are aimed at landlords specifically. Interest-only loans in particular can be hugely beneficial to cash flow, while other options can help to reduce the costs incurred for deposits and regular payments made.
The beginning of the tax year is a really good time to make these changes – and it’s still not too late to make the change. If you’re considering changing your mortgage options the Campbelltown mortgage brokers at Our Mortgage Options will give you good, sound advice on whether or not you should refinance, and what sort of mortgage changes would benefit you.
Superannuation Can Save You Money on an Investment Property
While it is true that you will not get an immediate cost saving if you buy your investment property via a superannuation fund, but eventually it can help you increase profits substantially. This is because when you sell, and the super-fund switches to pension mode, there will be no need to pay capital gains tax. In reality this can result in thousands of tax-free dollars.
Property Depreciation Schedules Help You Save
I wrote recently how important it is to claim property depreciation when you do your tax returns. It’s surprising just how many landlords do not bother to get depreciation schedules done. These don’t cost a lot, but even if you own an old property, you may be very surprised to discover where you can claim tax deductions. Once the initial report has been done, it can be used by your accountant to identify what ongoing property depreciation can be claimed on the property annually.
Never Ignore or Skimp on Repairs and Maintenance
Keeping an investment property properly maintained is essential not only because you owe it to your tenants, but also to protect your investment. If maintenance is not ongoing, this can lead to deterioration that will inevitably cost more to sort out in the long run.
The other issue is that if you don’t do the necessary repairs, tenants may have a viable excuse for breaking the lease. And for landlords leasing investment properties, this is something to be avoided. There is no doubt that a good, long-term tenant is worth the investment.
Streamline Your Property Management Options
Many landlords who rent out properties do their own management. There is nothing wrong with this, although it is essential to keep up-to-date with legislation and any regulations that might have changed. You need to stick to these.
But the other option is to employ a professional manager. This will certainly cost you more, but a good, reputable manager will guarantee a good job. You can negotiate management fees, but do not make the choice of manage based on fees alone. You want to be looking for a person who will be able to find, approve and ensure that you have good tenants long term, not someone who’s fees will save you money.
You can be assured that we are one of the leading Campbelltown mortgage brokers, and we can help you cut costs and make a bigger profit, at the same time advising you so that you do not upset your tenants. We are here to discuss all your investment property needs. Contact us today.