Do what it takes to re­fi­nance

Money Magazine Australia - - THIS MONTH -

It’s be­com­ing more dif­fi­cult to re­fi­nance. If you have mul­ti­ple loans, chances are you have found it in­creas­ingly dif­fi­cult to re­fi­nance over the past few months. Banks are now re­assess­ing you at up to 7-9% in­stead of the 4.5% that you may cur­rently be pay­ing.

In many re­spects prop­erty in­vestors have life easy, in gen­eral – once a prop­erty is bought, it is sim­ply a mat­ter of sit­ting back and reap­ing the re­wards for lit­tle ef­fort. While we do pay land tax, we do not pay high in­come taxes – as we are geared – or cap­i­tal gains taxes, if we never sell.

Your abil­ity to ob­tain money from the banks and keep re­peat­ing is what prop­erty in­vest­ing is re­ally about – re­fi­nanc­ing pro­vides you with on­go­ing eq­uity to rein­vest in new prop­er­ties. With this in mind, it is im­per­a­tive to do what­ever it takes to meet the bank’s cri­te­ria

– whether that is re­duc­ing your ex­penses, declar­ing more in­come, pay­ing more tax or get­ting a se­cond job. While re­fi­nanc­ing has been more dif­fi­cult re­cently, if there is a will, there is usu­ally a way.

Chris Gray, founder and CEO, Your Em­pire

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