Category: Asset Management

We love seeing money go back in your pocket!

Claiming everything you’re entitled to from the ATO is one proven method of increasing your bottom line with investment property.

Investment property expenses you can NOW claim

Understanding the ATO’s latest rules on what you can claim on your rental property can significantly increase your returns.

The ATO allows you to claim an immediate deduction (against your current year’s income) for the costs associated with:

• maintaining
• repairing
• managing and
• improving your property, as well as
• mortgage interest and some legal costs

Maintain, repair or improve – BUT DON’T blur the lines


The ATO defines maintenance as: “work to prevent deterioration or fix existing deterioration”.
• painting
• cleaning
• gardening
• lawn mowing and
• pest control

are all considered maintenance.

Something like regular servicing of the hot water system or air conditioning unit is considered maintenance as well.


The ATO defines repairs as: “work to make good or remedy defects in, damage to, or deterioration of the property”.

So, for example, if the hot water system breaks and you pay to have it fixed – that’s a repair.


The ATO defines improvements as anything that will increase the value or life of the property or anything that goes beyond the definition of repairing.

Replacing the old hot water system with a new solar system (even if the old system was no longer working) – that is considered as an improvement.


The distinction is important (and the ATO keeps a keen eye out for improvements incorrectly claimed as repairs).

Maintenance and repairs are eligible for an immediate deduction. Improvements ARE NOT.

You also cannot claim a deduction for the cost of improvements in the year you incur them.

Capital improvements (such as renovating a bathroom or kitchen) must be claimed as capital works deductions over several years.

Property management AND maintenance of your records

Property management is generally an area where you will have substantial expenses, regardless of the age or condition of the property.

The ATO says expenses including:

• advertising for tenants
• body corporate fees and charges
• council rates
• water charges
• land tax
• property agent’s fees and commission, as well as
• insurance costs (building, contents, public liability)

may all be eligible for an immediate deduction in the year it is incurred.

It is important for you to keep accurate records to make sure you are claiming everything you’re eligible for to support your claims.

Interest just got interesting

It is common knowledge that you are able to claim against the interest paid on your investment loan, however, it is important to remember the property must be rented out or genuinely available for rent in the income year you are claiming a deduction.

You may not be aware however that you can also claim the interest on a loan used to:

• purchase a depreciating asset for the rental property (like a new hot water system)
• a loan used to pay for repairs to the rental property (like fixing the hole in the wall the tradies made while removing your old hot water system), or
• a loan used to fund renovations.

Legal expenses – we object!

Legal fees always sting a little, so it’s good to know the ATO will allow some of them to be claimed as deductions.

For example, if you have to pay legal fees to:

• evict a non-paying tenant, or
• take court action for loss of rental income, or
• defend a damages claim related to your rental property

you can claim them as an immediate deduction.

It’s all about YOUR opportunities

If you are not positioning yourself to take advantage of all the tax deductions available to you, then you are wasting these opportunities to have more money in YOUR pocket.

Understanding what you can claim, and then making a claim, is one of many proactive steps you can take to improve your financial position and gain a greater return on your investment(s).

It’s all about YOUR opportunities

If you are not positioning yourself to take advantage of all the tax deductions available to you, then you are wasting these opportunities to have more money in YOUR pocket.

Understanding what you can claim, and then making a claim, is one of many proactive steps you can take to improve your financial position and gain a greater return on your investment(s).

Did you know – you can claim your tax deductions back in your pay each week?

If you are struggling to finance your investment property week to week and cannot wait until the end of tax time, then you may request a PAYG withholding variation with your pay officer. This essentially means that the amount of tax you pay (according to your projected investment property deductions) can be withheld from the ATO each pay cycle and remains in your hands until it is reconciled in your tax return at the end of the financial year.

HOWEVER – it will mean you are unlikely to get a big fat tax return each year. So chat with us to see



About Property Loan Advisor

Our goal at Property Loan Advisor is to ensure you receive expert loan advice to suit your personal situation and property goals. We take the time to listen and understand your circumstances and what you would like to achieve in the future.

Contact us If you would like guidance on utilising rental tax deductions available to you in an ever-changing financial and taxation landscape, contact the office today for assistance.


7 Millennial Money Savvy tips

You may be forgiven for thinking of the millennial generation as financially frivolous given all the headlines on ‘smashed avocado’ – spending money on café breakfasts. Contrary to popular belief, this generation can teach parents and older generations a few money savvy tips.

Follow these tips and the banks will love you

If your finances just aren’t what they should be, follow these 7 money savvy tips BEFORE you plan to buy a home.

1. Reduce your reliance on credit cards

In some cases, responsible use of credit cards can allow us to be rewarded with some of the finer things in life. BUT, on the other hand, unhealthy credit usage can lead to debt and poor credit ratings.

If you already have a (or some!) credit card(s)…

• STOP using your credit cards
• Pay off the highest interest rate card first
• Make consistent, full payments on time (this will help with the next point)
• Contact us. We can help you shop around for a lower interest rate, balance transfer credit card or consolidate your debts.

Finally, if you can’t afford it, don’t buy it. Don’t be tempted back into bad credit usage habits.

2. Do your research before you spend

Aussies love a good sale – think Boxing Day bargains, Black Friday (which is growing in popularity in Australia) and EOFY sales. The fear of missing out on a bargain drives up impulse buying.

Put the brakes on your spending

• Is your purchase a want or a need?

• Shop with a plan. Make a shopping list of items you need – if it’s not on the list, do you really need to buy it?

• If you need to spend, compare prices, DO YOUR RESEARCH – especially on big ticket items

• Give it 24 hours – wait overnight before you purchase

• OR….. spend like a millennial – on experiences, not things

3. Cut back on discretionary spending to save

Back to the ‘smashed avocado’ debate of frivolous spending – reigning in on your discretionary spending can reap BIG rewards.

For example, calculate just how much you could save if you cut back on one brunch and a few coffees a week.

Say you cut back on one $25 brunch and three coffees a week – that could save you approximately $2,080 a year. That’s the cost of a good holiday! There’s no reason you can’t afford a holiday, a new television or house furnishings.

4. Use new technology to manage your finances

Almost one in three millennials use online tools to track their spending1. Most banks offer online tools linked to your savings and transaction accounts to help manage your expenses.

There are other apps and online tools readily available such as Pocketbook and TrackMy Spend, that, once linked to your accounts, automatically total your spend by category. Some even have ‘safely spend’ limits and alerts.

There is no excuse for not knowing where your money goes!

5. Own your money situation

Millennials are increasingly taking control and responsibility over their finances. They are possessive of their data and more eager to be involved in their finances than past generations.

Take the lead from this generation and make time in your life for your finances.

Drop some time in your diary each month to do a quick check of your account transactions, fees and charges.

Make sure your debt is reducing and your savings/offset account is increasing because if it isn’t, then you are not getting ahead financially.

6. Create a side-hustle to accumulate additional wealth

The basic law of getting ahead financially states “you either have to make more money or spend less”. You don’t have to do one without the other – DO BOTH – and you’ll get even further ahead.

A recent Aussie survey indicates that millennials are joining the FIRE moment – Financially Independent Retire Early – and creating side-hustles to accumulate wealth.

Do you have skills or interests that could earn you extra income?

7. Spend on experiences, not on ‘things’

For those of us who are a little older, when you think back to your childhood, you are more likely to remember those family weekends away camping or balmy beachy holidays than the bike you got for your birthday.

Instead of impulse spending or online shopping, reward your improved money management techniques with an experience.

Some strategists quote 75% of millennials prefer to spend money on desirable experiences, education or a ‘shared’ good rather than on material possessions.

Think like a millennial and focus on experiences rather than spending on material goods that will date, be replaced or depreciate over time…. instead spend on experiences you will remember for a lifetime.



About Property Loan Advisor

Our goal at Property Loan Advisor is to ensure you receive expert loan advice to suit your personal situation and property goals. We take the time to listen and understand your circumstances and what you would like to achieve in the future.

Contact us if you are looking to set up a financial budget, refinancing or have plans to buy a home, contact us first so we can help you become financially savvy. We will help you achieve a good credit report and put you in the right position before going to the lenders.


The important of documenting family loans

Family loans are not uncommon. When a loved one needs help financing a new business, purchasing their first home or overcoming financial difficulties, it is natural to want to help out as much as you can.

However, this does not mean that you have to put yourself in an uncomfortable position and run the risk of stressing family relationships. You should seek help to structure a family loan and be savvy about it.

Why should I have a loan agreement?

Having a loan agreement in place will provide you and your family members with certainty and make both of your expectations clear. This can prevent family disputes and put you at ease knowing that you can enforce your agreement.

Although your family members might not expect a loan agreement it can benefit them too.

It shows the rest of the family that they are serious about repaying the loan and can help prevent potential family tension and unease.

When things turn ‘The bold and the beautiful’

If family relationships happen to break down, the last thing you need is to have disagreements over loan repayments.

What should a loan agreement contain?


The terms of your family loan agreement are up to you. However, it is absolutely necessary that the terms of the loan are specific. If the agreement is vague or uncertain, you run the risk of not being able to enforce it!


Make sure to cover whether interest is payable, the rate and the dates due for repayment.


The loan documents should also be signed and dated and each party should retain a copy.

Depending on the circumstances, you might want the loan to be on commercial terms.

Interest rates can be fixed, variable or even pegged to the home loan rates of a commercial lender. If you are concerned about being repaid on time, you may want to consider setting a higher interest rate should your family or friends default on payment.

If you plan to loan a large amount of money you would be wise to secure the loan in some way.

If you have helped a loved one purchase a home, you should support the loan with a mortgage or place a caveat over the property.

The word caveat is a Latin word loosely meaning ‘warning’. A caveat acts as a warning that another party has an interest in the property, usually because they are owed money by the owner of the property, but have not formally registered their interest by way of a mortgage.

A mortgage is a more prudent choice, as a caveat will not prevent the property from being sold. Caveats simply prevent the property being dealt with without your knowledge, buying you some time to protect your interests. Another option is to secure the loan with personal property from the borrower. If you are unsure of how to structure any of these securities, obtain legal advice.

Do I need to consider other legislation?

It can be all very confusing but we have the answers for you and can give you peace of mind!

How do I obtain agreements and documents?

Law Central is an automated legal document provider that enables individuals to build their own Australian legal documents online by answering questions. Each legal document is written and maintained by a lawyer and signed off by the authoring law practice.

Should you need to customise your legal documents or require more details, seek legal advice.


About Property Loan Advisor

Our goal at Property Loan Advisor is to ensure you receive expert loan advice to suit your personal situation and property goals. We take the time to listen and understand your circumstances and what you would like to achieve in the future.

We are here to help you so contact us no matter what financial question you have!


Top 5 questions to ask before purchasing an investment Property

Due diligence is everything when it comes to investing rental property. Check out the top 5 tips and strategies to help you grow your property portfolio.

1. Decide – Capital gains or rental return or both?

You need to consider whether you are chasing rental returns or capital gain. A rental return will help you pay off a property over time; Capital growth will allow you to use the equity to purchase future investment properties. You may decide to have a mix of both. It will come down to affordability. An experienced mortgage broker can assist with the ability to borrow.

2 Calculate the rental return

The very first step is to calculate the rental return on the property and ask yourself the question; does this meet my criteria for purchasing the property? Some people are looking to achieve a positive cash flow on the property others look for capital growth.  You can very easily do a “back of the envelop calculation” that requires finding out what the weekly rent potential is versus the value of the property.  If you want to achieve a 5% return you would look for a property where the rent is the same as the first three digits in the purchase price. For Example $400,000 house rents for $400 per week it is roughly a 5% return. In fact it is really 5.2% ($400X 52 ÷ $400,000) = 5.2%. Try it – it works! Given that interest rates are at an all-time low it becomes easier to seek a neutral or positive cash flow on the property.

3. What’s the property really worth?

It is really only worth what someone is prepared to pay for it. Statistical analysis will help; you can use RP Data or other vendors of data to offer comparisons. Things that can help your negotiations are how long the property is on the market for, where does the property “fit” with other properties similar to the one you are researching, has the vendor previously dropped the price. What is the condition of the property you are looking at? Bear in mind if you purchase a property that needs repairs this will impact your ability to borrow for that property. The bank may request to see that you have funds available to do repairs or decline the loan because it is not a good security risk for them.

4. What is happening in the local market?

  1. Regardless of the statistical data when the valuer goes out to value the individual property, the fact is that the individual property is impacted by power lines, most people will view this as a health risk that they are not prepared to take. The majority of people may have trouble funding the property due to the adverse remarks that the valuer may add to the valuation report to the bank. Events such as murder or suicide that have occurred on the property will dramatically affect the sale and hence the value. Once a valuer makes comment on why the property is at a reduced sale price it will alert the banks to the risk and hence the ability to borrow, especially in mortgage insurance territory.
  2. I am looking to purchase a property in an area where all the other properties are listed at offers over $325,000. The property is 3bed, 1bath, 1car is perfectly fine condition the problem with the property is there are power lines running over rear of the property, which is the reason no one else is interested because it is well under what other properties have been selling for. A very similar property in the same street sold 2 months ago for $365,000.
  3. You could take a market analyst approach and research everything online. However, in my experience the most definitive way is to visit the area yourself and burn some shoe leather whilst walking around talking to local real estate agents and neighbours of potential houses that you a looking to purchase. A perfect example of this was a young investor made enquiries about a property he was thinking purchasing.

5. Property management

It may be tempting to manage property yourself. If you are going to do this put a proper lease in place and collect the payments by direct debit. Even if the property it is rented to a family member.  There are two main reasons you should put the proper paperwork together; one is to establish “the rules of the game” making sure everyone is aware, all too often the relationship that starts off good can end in disaster. The other reason is that you will need to prove that you can service future borrowings. If the bank can not verify the income on a property rented to a family member then it is assumed that there is no income on that property. This makes life difficult if you want to refinance to get yourself a better deal or grow your property portfolio. Best option is to have a local property manager do all this for you. The good ones are worth their weight in gold!

Questions About Macro Prudential Tools

Hi Felicity, I learnt a new word yesterday: macro-prudential. I understand the RBA is also talking about it in relation to investors. It looks like its going to be harder for investors to get loans. What is more scary I heard mortgage brokers saying the banks will soon increase interest rates for investors but keep owner occupiers loans low in a attempt to cool the property boom. Your thoughts? They have been advising investors to consider converting over to fixed interest rate loans.

Hi, great question – interesting term macro-prudential and what does it mean for investors? Macro-prudential controls are financial regulations aimed at minimising the risk to the financial system as a whole, while traditional micro-prudential regulation limits stress individual institutions.

They are measures that are not associated with the monetary policy (raising interest rates) which are designed to slow lending, particularly to property investors.

Some of these measures could include capping loan-to-value ratios or capping debt-to-income ratios or stress testing borrowers capacity to cope with rising interest rates.

At the end of the day, it is anyone’s guess as to what may happen. Growth in the market is not Australia wide and is mainly in cities such as Sydney and Melbourne. When I compare products in the market for investors small differences appear between owner-occupier and investor loans – for example, most lenders that offer Loans at 95% LVR will capitalise the mortgage insurance for owner occupiers but not for investors.

I think regardless of the financial landscape – the most important thing is to check in with your broker or banker when you are transacting a property deal and get the advice to match your circumstances and goals.

Fixed rates are historically very low now and great for locking in and knowing what your cash flow is, the downside is that if you sell the property in the fixed term you can be up for large break cost, so knowing what you want to do with the property determines what type of loan you would take up.