Author: Dino Livanidis
Source: articledashboard.com
Interest rate increase what are the positives to it and how can you benefit from it?
Just think about the property cycle and you will start to see the positives and if you set it up right, you can ride the wave when interest rates increase.
As an Investor, if Interest Rates increase, you don't pay for the total increase.
When you're paying off your home and the interest rates increase, who is responsible for the increase? You are...but as an investor you are not, why?.... because we can claim the increase against out taxable income.
Lets say, for example - you are on a $60,000 income and your tax bracket is 42%. If the Interest rates have increased by 1%, you will be claiming the 42% against your tax right, so in reality, the interest rate has only gone up for you 0.58%.
Plus, if you're concerned about interest rate increasing, talk to your lender and ask about having the Interest rate fixed for 3-5 years, then you know what your repayments will be for that term.
Not only that, another positive aspect you will discover is- Rentals will also increase.
Because we have new home buyers always coming into the market, when interest rates increase this puts a hold on their decision to purchase a home and instead they choose to rent, which means we get an increase in rental demand, which means..... Rents Increase.
So when you think about it we are, income tax bracket, just playing the property cycle game, we must have these interest rate increases happen so the property cycle can stick to its cycle. But it's up to us (property investors) to protect ourselves with safe measures just in-case something like this does arise.
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Wishing you all the success,
Dino F. Livanidis,
0418-872280,
www.npis.com.au
