Property Investment
File Management Programs
A Few Important Tips
Don't give the tax man any more money that you have too!
Getting a depreciation schedule made by a qualified quantity surveyor can be one of the most important things you can do to turn an under performing property into quite a performer.
Below are a few sample pages from one of my depreciation schedules.
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Don't wait for the tax man to give you your refund
The Australian Government lets you reduce the amount of tax you pay during the year by filling out a Income Tax Withholding Variation (ITWV) form. They will then work out what your tax deductions will be for the end of the financial year based on the information you provide and instead of paying your usual amount of tax, they inform your employer to take out less tax during the year. This is putting extra money in your pocket each week/month, that you can use towards a deposit for another home or if you have a mortgage on your on home, it helps you pay it off sooner.
Make a Business Decision
Remember that buying an investment property is a business decision. It does not matter if you personally like the property or not. The key is to make a good business decision and buy a property that will make you money.
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START BUILDING YOUR INVESTMENT PROPERTY PORTFOLIO TODAY
Ways to reduce your debt
Please understand that I am not a financial adviser, I am only trying to help
people by passing on some strategies that either myself of people I know have
used to get out of debt.
Avoid paying interest on your credit card
Credit cards can charge an obscene interest rate especially when compared with that of a housing loan. Methods you could try are:
- Top-up your mortgage so that you can pay off your credit card and you then pay the reduced interest rate on the balance. More importantly the money you save on interest you can put straight into the mortgage paying off your debt quicker and reduce the amount of interest you will need to pay next month.
- Use a credit card that gives you an interest free period so that you can purchase goods and effectively delay payment for them, usually by up to 55 days. At the end of this time pay off your credit card using your mortgage offset account or redraw facility.
Always do what will be cheapest for you in the long run
- When you get bills that offer a variety of ways to pay such as car registration or house insurance where you can pay monthly, quarterly or yearly, pay the amount that will be cheapest for you over the full year. In scenarios like these you could save $100 or more just by paying the total bill in one hit and may have only cost you $20 to $30 in interest if you had to dip into your mortgage.
- It is reverse if a company offers you pay by the month or quarter without penalty as this means you are not paying more in the long run by paying in smaller installments and you can leave the funds in your own loan account reducing the amount of interest you pay.
Try to reduce expenditure
- As bills come in shop around for a better deal. Companies are tripping over themselves to get your business, so let them. This may also include delaying slamming your front door shut next time a salesperson knocks on your door just long enough to see if in fact you could be better off by changing suppliers or provider etc.
- If you have a mobile phone plan, check to see if there is a better plan for you or if you need to be under a plan at all. If you are out of contract or already have your own phone some telco’s will let you use their networks with no ongoing fees and you only pay for calls at something like a cent per second.
- Look through the junk mail. You can find a bargin if you are just willing to look. It’s not uncommon to find things 20 to 40 percent off. The trick is not to buy something because it is good for the price. The way to get ahead is to buy something on special that you were going to buy regardless, otherwise you might inadvertently increase your expenditure.
- Look at your subscriptions to magazines and papers and if you don’t need them have them stopped. Alternatively if you buy these things and want to continue buying them save up to 40% just by subscribing to them instead of buying them down at the shop.
- Keep as much money in your mortgage or offset account as you can reducing the amount of interest you pay. If you can, have your pay deposited directly into your mortgage or offset account and only draw out funds as required.
Convert assets into cash
- A garage sale may easily turn unwanted goods into cash. For a days work you could make $300 to $1000 or more and it will un-clutter you home at the same time. If you don’t have a lot of stuff you could look at trying to pass on some of your lighter possessions through the use of ebay or similar company.
- The sale of a car may also be a good idea if not completely required. It is not just the money from the sale but the ongoing savings in not paying for rego, insurance, repairs and petrol etc. While talking about cars think about this. If your driving a bomb around and is costing you a fortune in repairs and running cost then buying a new car may actually save you money. Do your sums but if you traded a v8 that was costing you a packet to keep on the road in repairs and running costs then down sizing to a new 4 or 6 cylinder car would save huge amounts in running costs and things like rego. Plus you’re protected by the new car warranty and new small cars these days can be picked up for about $13,000.
- Your time is an asset. Think about changing jobs for a quick injection of cash. If you have 4 or more weeks in annual leave saved up and or your eligible for long service leave, you may want to find a new job and get paid out from your old job for all your saved up leave. This could easily be $5,000 to $10,000 if you have over several weeks leave owing to you. DO NOT quit your job first and then look for a new job.
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Don't wait to long
I would be a much wealthier person today if I had not procrastinated so long on what and where to buy. Imagine this... over 5 years you buy 5 houses, each worth about $200,000. Now also assume that you have used none of your own money for the purchase, except a small amount on each as a deposit. Now we all know that property inflation has been sitting between 5% and 25%. For this example we will assume the worst and use a 5% increase on our 5 houses worth above $200,000 each. This is $50,000 a year in equity being built up each year to put towards your retirement
See the Importance of a Positive Cash Flow
The link below provides all the details on the importance of finding Positive Cash Flow properties. Don't buy an investment property until you have read this page. Also provides a few working examples so you may see the affects before your own eyes.
Negative Gearing... Friend or Foe?
Buy Like a Professional
With this software you no longer have to worry about making a wrong decision. Imagine having the combined confidence of a Land Agent, a Accountant and a Property Tycoon all rolled into one.
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