Using LOC for rental expenses

I want to use the bank's money for repairs/maintenance costs for IP which a property manager looks after. Say I ask for a LOC on the IP, so that I can draw down from there as and when its needed. The Property Manager currently deducts any repairs/maintenance from rent collected before transferring the net to me. How does it work practically to make sure those expenses are directly paid with the LOC rather then a lower cashflow back to me (ie. get tax deductions for the interest) ?

Thanks

 

Just tell the PM not to pay any bills for you. I have a couple people like this - they get good rewards points on their cards, or are doing tricky stuff with their offset account, so they handle the bills. No problem.

You may just want to get some tax advice to make sure the loc interest is deductible with the way you've set it up.

 

In addition to what D.T. said, you can also ask the PM to bill their management fee separately so that you can pay that with the LOC too. (get advice)

 

I used to do something similar to this but in the end the hassle of maintaining records across so many properties became more than it was worth. I'd rather have everything be packaged up on a clean statement from PMs now.

 

On the tax side see
Tax Tip 4: Borrowing to Pay investment expenses https://propertychat.com.au/community/threads/tax-tip-4-borrowing-to-pay-investment-expenses.1554/