Devastating bush fires highlight need for property owners to undertake a financial check up

The devastating bush fires that have occurred over the last few weeks highlight the urgent need for property owners throughout Australia to undertake a financial check-up.

These bush fires have caused millions of dollars in damage to properties but unfortunately a large number of the affected property owners were either underinsured or in some cases had no property insurance.

The financial trauma caused by these bush fires has only added to the emotional turmoil of these unfortunate property owners have suffered.

It is a traumatic enough experience to have your property destroyed by a bush fire. However, it is even more traumatic if you don't have the necessary funds to rebuild the property due to lack of insurance.

This summer is shaping up to be a deadly bush fire season so property owners throughout Australia need to ensure that their properties are correctly insured as part of an overall financial check-up.

A financial check-up should also include a review of current mortgages.

With interest rates constantly changing and new home loan finance packages constantly coming onto the market, a home loan package which appeared very attractive a few years ago may now be superseded by more competitive or flexible products.

It may surprise property investors that there are a large number of home loan packages to choose from at very competitive interest rates.

Choosing the right home loan package can now be just as important as choosing the right location for your property. Choosing a better home loan can literally save you thousands of dollars over the life of the home loan or give you the opportunity to purchase additional investment properties.

A lot has happened in mortgage lending sector over the past year with APRIA relaxing lending restrictions especially for property investors.

In addition, the RBA has made three cuts to interest rates totalling 0.75% over recent months.

Lenders are now aggressively vying for business with highly competitive interest rates so property owners should shop around to get the best deal by utilising the services of a professional mortgage broker.

Property investors have been one of the major beneficiaries of this more competitive lending market and as a result they can now boost help boost their cash flow by obtaining more competitive housing finance.

A financial check-up can be used by property investors to identify other opportunities to boost cash flow especially if they own a number of investment properties.

For example, a major issue that property investors overlook is not fully claiming their tax depreciation benefits.

These tax depreciation benefits can amount to up to 60% of the overall value of the property over time.

It is never too late to claim these tax depreciation benefits as they can be claimed retrospectively. A retrospective tax depreciation report can deliver an investor thousands of dollars in unexpected tax benefits.

By Paul Bennion, Managing Director, DEPPRO