Most investors have learned ways to maximise the cash flow from their properties including, taking out interest-only loans, buying with others as ‘tenants in common’ and utilising home equity. However, there are a few additional tricks savvy investors have been tapping into.
If a property is negatively geared it is possible for an accountant to submit an income tax variation form to your payroll office. This estimates the end of financial year tax return and reduces the amount of tax taken out each pay period. This strategy must be approached with an accountant to ensure penalties are not incurred at the financial year end.
By opening a line of credit with a global or umbrella limit, applying for loans for each investment can be avoided. Small (sub-account) loans for mortgages, cars, personal loans, etc. can all be managed in one place. This allows an investor the freedom of managing and making changes to loans continuously if required.
Another trend investors are adopting is building a secondary dwelling on a property; a granny flat for example. The building must be self-contained and approved by council, but the value of the property and cash flow can greatly increase as a result.
Savvy investors stay up to date on the latest loan products to ensure that each investment has the best possible loan, saving money and increasing cash flow. Speak to an accountant or financial advisor to make the most of your investments.