With the recent interest rate reduction, it is an excellent time to look at your financial situation to make sure you are getting the best deal possible from your lender. This can be as simple as making an appointment with your accountant, financial advisor or bank. The goal is to not only make sure you are paying the lowest interest possible, but also to see whether a long term investment is possible.

Many people put this off looking at short term obligations rather than longer term goals. They will say “as soon as we pay off our credit card debt we will…”. The average credit card debt in Australia in March was $3,155. If you are not paying this off you are paying around 20% interest on the balance, whereas home loan rates are around 5%. So if you are struggling to move that stubborn balance but are budgeting well otherwise, it may be worth looking at some debt consolidation to clear the path to move forward. You may find that by refinancing, you are paying less on a monthly basis than you were and you are clear to consider an investment.

Negative gearing has been getting a lot of press lately. Those against it are generally looking at high level scenarios and how it affects tax revenue for the government. As an individual, it is an excellent wealth creation tool. Talk to your financial advisor (or accountant etc.) to see if this is possible for you. If you don’t ask you will never know. The key thing to remember if you intend to buy an investment to negatively gear is that the asset you buy MUST go up in value to effectively work in your favour. Otherwise it is a double loss. Get your advisor to explain this to you (this column is too short to do it). So if you go searching for an asset to buy as an investment, you must be reasonably confident that there are factors in place that will make that asset rise in value.

If you already have an investment property, get this assessed also to know exactly where you stand. There may be equity there that could be of considerable use to you.

If we can ever be of any assistance in any real estate matter please do not hesitate to call.