As a property investor, you don’t just want to make ends meet. You’re making an investment after all, and you want to ensure you’re doing everything you can to save money and get the best return. Mortgage Masters are the mortgage broker Auckland property investors can trust for advice on reducing costs and maximising rental income. Here are some of our tips on how you can do that.
Tax Deductions
Start by double checking you’re claiming all the tax deductions you’re eligible for. This includes:
- Repairs and maintenance (excluding renovations that substantially improve the value of the property)
- Rates and insurance
- Mortgage repayment insurance
- Legal fees involved in buying a rental property ($10,000 or less)
- Professional services fees, like accountants, lawyers, or property managers
- Vehicle and travel expenses incurred when travelling to inspect your property or do repairs
- Depreciation on capital expenses, such as appliances, hot water systems and whitegoods
If you’ve taken out a loan for a business purpose, e.g., to buy a new business asset, and the loan is secured against a residential rental property, you can also claim the interest as an expense.
Keep Up with Rent Increases
Some landlords find it daunting to increase the rent, however, you should always review your rent and ensure it’s consistent with market levels so you’re not incurring increasing costs against decreasing income over time. Remember that it’s better to make small, regular (yearly) increases instead of one big one that can upset or shock your tenant/s into moving out.
Building Your Property Portfolio
Creating a better financial future through property investment is all about the big picture. By considering your next home loan Auckland property investors can create a long-term strategic plan for building a property investment portfolio. Build your wealth by ensuring property you purchase will have a high rental yield and capital value so you can leverage its equity. The higher your equity and rental returns are, the more you can borrow for additional investments.
How to Use Equity
Equity allows you to leverage profits from one property into more. Equity is the difference between the value of your property and how much you have left on your mortgage for it. For example, if your home is worth $400,000 and has $200,000 left on the mortgage, you have $200,000 in equity. You can borrow against this equity to purchase an additional property, with the equity used as security. Calculating your equity involves the current value of your property, which will differ from its purchase price. You can also leverage the equity in several properties if you own more than one.
Using your equity is one of the most cost-effective ways to expand your property portfolio. You need to structure your finances so that accessing equity is easy. Ensure you get an independent valuation of your property to get an accurate equity calculation. Work with a mortgage broker who understands investing, equity, negative gearing, and specific home loan requirements NZ property investors are subject to, so they can help you organise the ideal financial structure.
Speak with a Mortgage Broker Auckland Property Investors Can Trust
At Mortgage Masters, our independent advisors can help you access the best home loan Auckland property investors can get to reduce ongoing costs and maximise returns. To find out more about property investment strategies and home loan requirements NZ property investors should get in touch today for a free consultation.
