New Investor Questions

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From: Ray Webster


I was wonder if you could help me with some questions I have re impact on weekly cash flow when investing in property. I have just read Jans latest book and want to make my first investment but I'm still trying to understand the effects on your weekly cashflow given that some weeks there will be minimal expense and other weeks higher expenses. Her PIA Software spits out a weekly figure (positive or negative). This figure however is an average weekly figure over the year taking in the tax credits. My question is how do you minimise the impact of weekly running expenses of the property, so that you are not paying too much out of your weekly cashflow. I realise one way is to apply to the ATO for a reduce tax installment but what has been your experiences or tips?

 

[Alan H]

Reply: 1
From: Alan Hill


Ray,

I think you've answered your own question.

The old ATO '221D', now known by the nifty little name of "Application for variation of amounts required to be withheld under PAYG withholding" solves many of the problems you alluded to. Doesn't that little name just roll off your tongue!!

Anyway.... "loaning" the ATO my money for a year just goes against the grain!

Also, ensure you have funds 'set aside' or accessible for the 'unexpected' expenses. The Rates, Interest payments etc are the easy ones to schedule. It's the blown hot water systems, tenant damages etc. that will give you a large jolt unless you have access to ready funds.

Good luck with the first purchase.