Being a Sydney resident myself, I’ve notice that auction clearances have eased off lately from their record highs; meaning property prices are starting to stabilise (finally). Interest rates have also caught my attention, although they’ve been moving downwards over the past twenty years, the current fixed-rate loans rates have hit a sweet spot between 5½ – 6%pa . What do my observations mean and why should you care? They mean you can turn the increased value (capital) of your property into a deposit for another rental property sooner than you think. And the sum of $20k is definitely worth caring about! Having this much extra equity in your property can be a make or break moment for your next investment. Let’s face it, now is the time to make a move in the property market. When you mix the current high property prices (particularly in Sydney) with low interest rates, you’ll get investment success pretty much every time. So how do you “shake” an extra $20k loose from your investment property, over the next five years? It’s actually pretty easy, so let me explain with a simple example. Say your rental property is valued at $600,000, of which you purchased with a 20% deposit, and it’s now yielding a 5% return from your renters. Now, you fix the interest rate at 6% over the next 5 years. And schedule your rental income increases by 5%pa respectively. This creates a gross profit gap that accumulates to more than $20,000 by the end of the fixed term! That’s definitely something to get excited about!
I need to make sure you got what I just said, so let’s repeat this again: by simply locking in your loan at a fixed rate of 6% over the next 5 years, and increasing your rental income by 5% each year as well = $20K+. By “shaking loose” a spare $20,000 with this simple strategy, you can realise that next property investment quicker than you originally thought. Do you think this sounds too good to be true? Trust me, I know it’s too good, but I can promise that it’s definitely true! Like a lot of investors, I’m sure you’re ready to get started with this, but you probably don’t know what the next step actually is. Please, don’t miss this window of opportunity simply because you’re getting stuck in the details or with the fact you don’t know what to do – leave all that stuff to the experts. Of which, I can help with, too.
You only need to do 3 things from here:
Step 1: Ensure you’ve engaged an experienced tax advisor. Getting the right tax advice and checking you’re properly set up to take advantage of this strategy is priceless.
Step 2: Get a professional mortgage consultant on your side, someone you can add to your team to help you find out where all these great low interest rates live. By always working with a pro in loans means you’ll never miss out when better rates are available for you.
Step 3: Be sure both the tax advisor and mortgage consultant know how this strategy actually operates, so they work in conjunction to make that $20,000 appear in five years’ time. And to make things even easier again, you’ll be happy to learn I have extensive experience in this area, as well as my home loan colleague John Tindall.
Pick up the phone for help today so we can get that $20k a step closer to you. Contact myself George Germanos of Alliance Accounting on 1300 135 918 or John Tindal of Choice Home Loans on 0411 023 078. Source: John Tindall of Choice Home Loans: 0411 023 078 Note: tax benefits and transaction costs not modelled