21 Jun 2016

How to Get the Most out of Your Investment Property


Buying a property with the intent to rent it out is one of the more popular investment strategies today. Through perpetually rising rental rates resulting from increasing demand and decreasing vacancy, investment property owners use their asset to eventually turn a profit (and wind up having paid off the home entirely).

But the property market is volatile. Changes to taxation or other law, contractual changes or even difficult tenants can have dramatic effects on a vendor or landlord’s ability to earn.

If you’re going to invest in property, it’s important to squeeze every drop of juice possible out of your investment. Here are a few ways to make sure you do that:

Interest-only loans

Interest-only loans come with much lower monthly repayments. If you’re looking to use negative gearing as your investment strategy, an interest-only loan could be your best option.

Not only do you pay less, you might even be eligible to claim the entire amount of your interest on tax.

Consider throwing your savings into an offset account. This would lower the amount of interest you pay even more.

Capital gains

If you sell an investment property that was purchased after the September of 1985, you’ll need to pay capital gains tax.

But there are strategies you can use to lower the amount you have to pay. One option is to offset the profit with capital losses.

Capital gains tax can be complicated, so it pays to speak to financial experts about it. Your accountant might be able to assist you, but alternatively, you could speak to Mortgage House by dialling (02) 8116 1010.

Depreciation claims

You might be surprised what you can claim come tax time as a property owner.

Depreciation can be claimed on removable items such as fixtures and appliances, and if your property was built after 1987, you can even claim 2.5% of the structural cost of the property.

Four out of five property investors don’t maximise depreciation on their properties come tax time. It pays to be the fifth.

Mortgage House

At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.

But don’t worry, we can help with that.

If you’re thinking of buying a home, you can contact us for advice about the best options for you when it comes to your mortgage. The cost of your mortgage can drastically affect your financial planning, so it pays to speak to the experts about it.

Click here to speak to us!

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