Property Investment Tips: Increase your cash flow

By the resi financial blog team, 10 November 2014

Property Investment Tips: Increase your cash flow

When it comes to recycling debt and leveraging one property to pay for another, there are plenty of ways to cleverly maximise the cash coming in, and minimise the cash going out. Here are some top tips for improving cash flow for your investment portfolio.

1. Try interest only. An interest-only loan will not help you make inroads when it comes to increasing equity from a property, but the lower repayments involved in these kinds of loans means your outgoing​ expenses are reduced. The interest payments are also tax deductible.

If this can get you into a cash flow positive situation, you could start generating some extra income now, rather than waiting for your equity to increase enough to leverage another mortgage. Depending on how long you hold the property for, you may still make a sizeable capital gain when it comes to sell.

2. Deduct what you can. It can be hard to know exactly what you are able to deduct as an expense when it comes to rental investment properties, so retaining a tax accountant that specialises in property is well worth it.

There are several items you can claim immediately, but there are also some that you will be able  to claim for years, offsetting some of your capital outlay. Some of the cost of borrowing as well as depreciating assets and improvements to the dwelling can be deducted from your taxes over time.

3. Minimise your maintenance. It would be poor advice to say to avoid maintenance, as regular upkeep can prevent costly repairs in the long run. However, buying or renovating a property to require as little maintenance as possible will save you some money.

Buying a brand new house often means there are very few immediate maintenance issues to consider, and there may be recourse to the builder for some faults within a given period if your builder provides a construction warranty.

When it comes to investing in property it always helps to talk to a professional in the field. A resi loan specialist is just a phone call away!

Categories: Home Loans, Property Investment