Monthly Expenses

At the moment due to the rents being down, our units are costing us money so we are in the process of getting them refinanced, hopefully on a fixed rate. Is there anything else that can be suggested to stop the financial drain on a monthly basis.

 

If you haven't done so already then time to go into "lean mode" with all expenditure.

Storing up in the good times for the lean times that always come is always sage advice but rarely heeded.

Setting your properties apart form the crowd will help as well and price it right from the outset to limit vacancies.

 

Well we have to pay the land and water rates and strata fees which in Queensland are high, is there any others?

 

Do you allow pets? You can often command a higher rent.

Look at household expenditure as well if cashflow is a bit tight - see if there's any ongoing expenses that could be cut/reduced. Also see if you can get better deals on insurances, etc.

Cheers

Jamie

 

Haha - what Rolf means is if you have the borrowing capacity and equity in any of your properties, you may be able to set up a small loan to borrow for these costs, and it may be deductible. It can be a good way to get through a lean time as long as it's only temporary.

Another way is to look at a PAYG tax variation. This basically lets you pay less tax per pay which equals more cash-flow every month. It's important to do this with your accountant to be sure you're not going to end up with a bill at tax-time, but can be an excellent way to reduce the strain month to month.

 

Either reduce expenses or sell them.

 

Self managing can save the agent fees. This is often a significant % of rent and absence of an agent may not reflect lower rent being earned.

Many small cuts can add to significant savings
- Interest rate and fees on loan
- IO repayments even for a few years
- Fixed rate ?
- Agent fees

Avoid making silly cuts eg LL insurance

 

Have you thought about changing the way you rent the places out? Air bnb, student accommodation or rental individual rooms may increase your income.

 

Are your rates and water all monthly or quarterly rather than annual?

I doubt it is sensible to self manage Qld properties from WA.

 

Probably an obvious one, but be sure to seek the maximum term when you refinance the balance. This will help keep your repayments to a minimum. Also, there are some really good 2 and 3 year fixed rates around at the moment so consider those fixed terms.