Member Club Id: 12345678   Property Mentor: Bob Dylan

Important tips for managing your line of credit

Managing the cashflow and allocating appropriate spending in your Line of Credit (LOC) loan is very important, whether itís for personal or investment purposes.

Property Loans highly recommend that your LOCs are utilised solely for the purpose for which they were originally established, either for personal purposes or for investment purposes. By correctly establishing the separate loan types into what is personal and investment at the outset, youíll be able to easily identify which interest expenses are tax deductible.

Line of Credit for Investment Purposes
An investment LOC should be used to invest in assets that appreciate in value, such as property and used for your Investment asset and not for personal use

With an investment LOC, you would deposit your net rental income, and draw funds for tax deductible outgoings/expenses such as interest, council rates, body corporate fees, maintenance costs, and so on. Remember to monitor your LOC regularly. Be sure to deposit your tax refunds attributed to the property investments back into your LOC, AND also make regular contributions from your personal funds to cover the cash shortfalls

Line of Credit for Personal Purposes
Typically, you would deposit your wages and investment property tax savings into your personal LOC.

However, these investment property tax savings may need to be transferred over to your investment LOC from time to time, to ensure the longevity of your investment LOC.

Important things you should know about Line of Credit Loans
These types of loans require financial discipline and good budgeting skills to stay within your financial limits to ensure they have the lasting timeframe you envisaged from the outset.

One thing that most borrowers rarely realise is that when interest rates rise and interest accrues within your LOC, this is draining your LOC and quickly bringing you to your LOC limit.

If you have done a PAYG tax variation, then you have extra take home pay because of your investment properties. This should not be spent and should be invested back into your LOC.

If you would like a free, no obligation review of your finance structure contact your Property Mentor and they will put you in touch with a preferred Property Loans 4U Mortgage Broker.

Your Property Mentor’s contact details are: Bob Dylan 0404040404 bob@dylan.com

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