Saving money. For any smart property investor, this is something that has probably made your resolutions list every year. Still, many people find it hard to tuck away the proverbial dollar a day. Especially today when everybody is nervous about income security, you want to be assured that you can still save while investing in real estate.

A lot of the time it can feel like your investment is just taking and not giving. However, it is up to you to assess your assets and take the first step. So let us look at some of the ways that you can save money when investing in the property market.

Get Yourself An Offset Account

An offset account can reduce the amount of time you spend paying off your mortgage. With an offset account, you will end up paying less interest overall. That is because your loan account will use the offset account towards your loan balance.

This is how it works. You will first link your offset account to your loan account. Then the money that you keep in your offset account offsets your remaining loan balance at any given time. So this way, when your interest is calculated, it will be based on your loan balance minus the amount of money that you are holding in your linked offset account.

To save money, keep as much money as you can in your offset account. A great way to keep your offset account topped up is by having your salary sent there. It doesn’t matter if you don’t keep the money there for long. You can still get a lot of savings if you end up transferring your salary (or some of it) after a few days.

Take Advantage Of Depreciation

You really get to see the rewards of having a depreciation schedule done when filing your taxes. The first step is to get a qualified quantity surveyor to get the depreciation schedule done for you. The depreciation schedule would include information about any tax deductions that you are eligible for with that property. Having this information ready can save you as much as $4,500 each year, come tax time.

Consider Refinancing Your Mortgage

With interesting rates, nationally, as low as 0.10%, it is the perfect time to refinance your loan. Talk to your bank or lender to see if there is a more attractive interest rate that you can get.  

If you do find that your bank won’t budge, start talking to different financial institutions or reach out to MLS Finance, we can do the leg work for you on this and find you the sweetest deal. 

When it comes to variable rates versus fixed rates, fixed rates are winning right now. You can get much better saving opportunities from changing your agreement to a fixed rate or refinancing under fixed-rate terms. 

“There has never been a better time for those with a mortgage to consider meeting with a mortgage broker to review their home loan and lock-in thousands of dollars in potential savings.” – David Ruddiman, GM of Digital Banking, Compare The Market.

So if you can’t find it when your lender right now, go out there and start looking for a comfortable 2 to 3 year fixed rate. You will see the savings in the long run!

Prioritise Risk management

You never know what could happen. It could be a natural disaster or an accident and without your insurance, you will be liable to pay thousands in repairs. Do not neglect your landlord’s insurance. This keeps you covered if any damage is done to your property.

Your landlord’s insurance policy is insurance that you can get specifically for your investment properties. This type of insurance does not only cover things like physical property damage. It can also come in handy if your tenant does not come through with the rent.

“For example, if a tenant goes rogue, it can take at least three weeks to deal with the problem, so if it is a property that earns high rental returns it can be well worth it to be insured.”- Bev Levy, Renting Smart

We all know that in every investment situation, you need to invest first and then reap the rewards later. However, it is still a good idea to try and save as much as you can while you are funding the investment. If you are ready to start the search for the best offer, MLS Finance is here and ready to take your call.  We always enjoy finding ways to put more back into your pocket!

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