Real estate agents are often giving us feedback that their vacancy rates on rental properties are increasing due to landlords wanting to increase rent. We were challenged to work with landlords to find a solution. Several alternative options are usually proposed.The best alternative options we can recommend to improve cash flow without affecting the rental are often:
REVIEWING YOUR CURRENT HOME LOAN
Over 60% of mortgage owners are not to up to date with their current home loan rates. Engaging a good mortgage broker to review their home loan can save landlords up to $25 per week whereas increasing your rent could lose you a tenant or make your tenant disgruntled.
With regards to tax depreciation, it is an ATO approved tax tool that captures the wear and tear (depreciation) on your building to entitle you to claim tax deductions resulting in a boost of up to $75 per week in rent.
With our group of experienced brokers we have managed to show landlords that raising rent isn’t always the best way of increasing cash flow. Simply looking at your current mortgage rate and refinancing would be another alternative to increase your cash flow.
Before reviewing your current home loan:
Example mortgage: $450,000 at 4.68% – $536.96 repayment per week
After reviewing your current home loan and completing a depreciation schedule
Example refinance: $450,000 at 4.24% – $512.93 repayment per week
$24.03 per week saving when reviewing your current home loan PLUS $75 per week with the completion of you depreciation schedule
TOTAL SAVING OF $99 PER WEEK OR $5,148 PER YEAR
Ask yourself the following question
Can I increase my rent by $99 per week?
When was the last time I reviewed my home loan?
Article written by:
Gabriel Mikha from Beat My Home Loan
Disclaimer: This blog post has not taken into account your objectives, financial situation or needs. Due to this, before acting on any general advice/information in this communication, you should consider whether it is appropriate to your objectives, financial situation or needs.