But did you know that there are some landlords who overlook one of the biggest potential deductions of all? Now this little tip only applies to investors who have fixed rate investment loans with the option to pay interest in advance, so it’s not for everyone, but the possibility of paying your interest in advance is worth looking at if you qualify.
Our friends in the tax world tell us that there are several reasons why an investor may look at paying interest in advance. For example, if an investor’s income was unusually high during this financial year or they expect a lower income in the next financial year, there can be tax benefits in paying next year’s interest during this financial year can be advantageous for investors.
It is also worthwhile noting that if you have a loan account that allows you to do this, some lenders will even offer an incentive to pay interest in advance, effectively giving the investor a discounted fixed rate for the whole year, no matter what happens with interest rates.
Now, obviously, we are not in the business of offering tax advice, nor are we mortgage brokers. Any potential benefits will depend entirely on your own individual financial circumstances. However, if you think this could be of help, why not have a chat with your financial advisors to see if it could apply to you? After all, if you don’t ask you’ll never know.
Of course, if you need any assistance or advice regarding the management of your own rental property, don’t forget that our own team of experts are always happy to help.