Currently over 1.8 million Australians own an investment property and one of the main reasons is for the tax benefits they provide! An investment property is a real estate property which is purchased for the purpose of earning an income through the property in a range of ways which may include through renters or through resale of the property in the future.
Buying a commercial or residential property as an investment property is an exciting time – although to make the most of it it is important to understand the ins and outs of an investment property to make the most of tax benefits and other benefits available.
Benefits Of Making Investments In Properties
There are many benefits of investment properties with the main benefit being tax related. Many property-related expenses are tax deductible, which may include maintenance costs or fees paid on your residential or commercial loans.
Some key benefits of investment properties include:
– Rental Income
– Capital growth
– Tax advantages
– Negative Gearing
Having rental income from your tenants is a great way to ensure you have a regular income which is beneficial for cashflow. Landlords can claim a variety of costs including property maintenance costs, council rates, pest control, garden maintenance, agent fees, strata fees, land tax, advertising costs to find a tenant and more.
The main tax benefits and advantages which come with owning an investment property which is a rental property is that you can offset any losses on the rental property against your assessable income. It is possible to pay less tax overtime if the income you receive from the property is less than the expenses associated with owning the property as these costs will be deducted from the owner’s income.
Negative gearing is something to take into consideration when you have an investment property. Negative gearing refers to when the income from the property is less than the rental return, interest, or other related property costs. This can reduce your overall taxable income, meaning that you are reducing the amount of tax you may need to pay – overall saving money in the long run.
Claiming for depreciation on a negatively geared property can result in an improved tax position. This is due to when you claim for depreciation this can increase the overall loss of the investment property which can then be claimed as a tax deduction against personal income. Due to this, there will be a decrease in the investors tax liability and lead to a higher tax refund.
Reach out to the friendly team at Greenline Home Loans who can assist you with commercial property loans, accessing the best home loans, or a construction loan where the real estate property can then be used as an investment property for you to reap the benefits for.
Top 3 Mistakes To Avoid When Investing In Properties
To get the most out of your investment property it is best to understand your goals and financial situation. Here are some tips for 3 mistakes to avoid when considering an investment property:
1. Not conducting enough research
It is important to carry out sufficient research before acquiring a loan or buying a property which you are intending on becoming an investment property. It is important to research the location of the property you are wanting, the possible zoning requirements in the area you are interested in, the needs and requirements of possible tenants for your property, the condition of the property and more.
Ensuring you have undertaken sufficient research will ensure that you are well-informed about the property you are building or buying and are able to make the decisions based on factual evidence.
2. Not having a plan or strategy in place
It is always beneficial to have a plan or strategy in place regarding your investment property. Real estate can appreciate in value, although time is needed for this to happen. Generally, the longer you are in the market, the higher your capital gains will be. Therefore, it is important to set a plan for if you are planning to invest long-term.
3. Not calculating finances effectively
It is important to ensure the property you are building, or buying is a good financial decision for you long-term. Ensuring you can afford the payments required and maintenance costs by setting aside money or creating an emergency fund can limit financial hardship which may occur.
Speak to the friendly team at Greenline Home Loans who are able to assist with commercial property loans, the best home loans available or construction loans to begin with when you are considering an investment property.
Reach out to Greenline Home Loans today!
If you have been considering buying your first home, buying a residential property or wanting an interest-only residential home loan, get in touch with our team of experienced brokers at Greenline Home Loans. We have access to 50 lenders and a strong relationship with several major banks to assist you and offer a solution to suit your needs.
At Greenline Home Loans, we will tailor the best solution for your needs and walk with you hand in hand from the first day you consider a construction loan or small business loan. Contact our friendly team of brokers to speak about low-rate home loans on 1800 705 505 to get started today!
Home equity refers to the difference between your home’s current market value and your mortgage balance. As a very important element for your financial future, home equity helps you to build wealth. Retaining equity in your home acts as a resource where you are able to borrow against it in order to enhance your property or simply to pay off any high-interest debts.
What Are The Benefits Of Unlocking And Accessing Home Equity?
Low-Interest Rates
Favourably enough, home equity loans don’t entirely rely merely on only the lender. Financial institutions, including banks and brokers, hand out loans in a way that guarantees a sure return for both themselves and their clients. So, in saying that lower interest rates are offered for home equity loans as compared to other loan types. These low-interest rates prove to be very beneficial on your behalf if you do not have high-interest debt on your credit card. When applying for a home equity loan with Greenline Home Loans, you can ensure that you will receive the best home loans.
Ability To Fund Home Renovations
Several homeowners unlock and access their home’s equity to aid in funding a home renovation. If done in an accurate manner, not only is there a possibility to boost a property’s value by more than what is spent, but it can also save you the hassle of having to upsize your home and having to go through the whole inconvenience of selling, buying and moving.
It is crucial to keep in mind to do your research before carrying out such renovations. Ensure that you are careful with your budget, as overcapitalisation – the amount spent for renovations ends up costing more than the value they add to the property – is a very common mistake for amateur renovators.
Power To Borrow Large Sums Of Money
There are individuals who have excellent credit scores that may need to borrow against the value of their home in order to receive a large sum of money. Accessing your equity from the value of your home provides you with easy-to-obtain large sums of money that you may not qualify for through other avenues. If you find yourself in a position where it is necessary to borrow a large sum of money, then a home equity loan would be an excellent option for you.
Home Equity Line Of Credit For Business
If you are searching for something a bit more flexible, a home equity line of credit (HELOC) for your business is a great solution. As compared to standard commercial loans, HELOCs can provide you with the ability to access funds at your convenience, and you are able to take out extra as needed without any retributions.
When it comes to a HELOC, the application and approval process is generally much more trouble-free in contrast to other alternatives. As with a home equity loan, there is a chance that the interest within this loan will be tax-deductible, and the loan terms usually span from 15 to 20 years.
Great Opportunity To Purchase A Commercial Property
If you have owned your home for a few years, there is the possibility that you have built up enough equity. This is a worthy resource when it comes to property investment. Your home equity can be used instead of a cash deposit to buy another property.
Once you have decided on your commercial loan with Greenline Home Loans, we will work closely with you to get this application process underway and support you all the way through to settlement.
How Do You Unlock and Access Home Equity With Greenline Home Loans?
Below we have summarised the various steps that are involved with unlocking and accessing your equity with Greenline Home Loans.
- Determine how much equity is available in your property
- Work out the amount of equity that is accessible with your mortgage broker
- Evaluate the various loan options with your mortgage broker
- Calculate the costs associated with accessing such equity
- Loan application and settlement
- Access your equity and utilise it for any purposes you feel best
Reach out to Greenline Home Loans today!
In an instance where you may need to borrow some money to achieve some personal goals like renovating your home, purchasing a new car or even travelling overseas, releasing equity from your property is a very favourable option. Here at Greenline Home Loans, you can rely on us for the best home loans with the lowest home loan rates and customer service that you will value for the life of your loan.
If you have been considering buying your first home, buying a residential property, are after a commercial loan or want to access the equity in your home, get in touch with our team of experienced brokers at Greenline Home Loans. We have access to 50 lenders and a strong relationship with several major banks to assist you and offer a solution to suit your needs.
At Greenline Home Loans, we will tailor the best solution for your needs and walk with you hand in hand from the first day you consider a cash out – equity release. Contact our friendly team of brokers to speak about our low-rate, best home loans on 1800 705 505 to get started today!