By Paul Bennion, Managing Director, DEPPRO
With the new 2019/2020 financial year fast approaching, it is very timely for property investors to undertake a start of financial year property check-up.
A lot has changed in the past year for property investors throughout Australia.
These changes include the decision by the RBA to start cutting interest rates as well as falls in fixed interest rates for property investors.
In addition, the fall-out from the Royal Commission into the financial services sector has resulted in tighter lending standards being imposed by the major banks for investors.
In these challenging times, it is critical that property investors focus on enhancing the cash flow.
A start of financial year property health check can best identify these opportunities to boost cash flow especially if you 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 investors thousands of dollars in unexpected tax benefits.
A start of financial year property health check should not only look at issues such as tax deprecation but also other important issues such as home loans.
The need for a mortgage check is all the more important as interest rates are likely to fall further during the coming year for property investors.
If you are refinancing an existing investment loan or applying for a new investment loan, it is important to look at all the options especially as some lenders offer more competitive rates as well as more flexible lending terms.
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packages constantly coming onto the market, a home loan package which appeared very attractive a few years ago may be superseded by more competitive or flexible products.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.
Many people are locked out of the property investment market because their current home loan structure is too inflexible or not offering the most competitive interest rates.
In the past, most home buyers took out a home loan and just focused on servicing it. However, because of intense competition amongst home loan lenders, there is now the opportunity to review your home loan with a view to secure an even better home loan package.