Using Rental Income To Drive Long-term Wealth Part-2

By Author: Neil parmer
Total Articles: 7
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5 BE TAX-WISE, BUT DON'T GET TAX IN PROPORTION
Many investors will refuse to pay down debt or sell the property because they are unwilling to pay tax on profits and gains. No-one likes payer: tax! But, there are lots of strategies to minimize the various taxes the investors may pay.
Many investors are only ever going to pay 20% income tax (there is no National Insurance on rental profits), and so will actually receive
80% of their profits - sometimes more. Using a property company is a good way of 'parking' profits and avoiding Higher Rate income tax - for later tax-efficient withdrawal.
Tax is a fact of life - minimize it, but don't let tax concerns override good business sense.
6 THE FINAL FEW YEARS...
Imagine the personal satisfaction of making that final mortgage payment - no more debt, no more interest rate worries, no more direct debits and lender hassles. Many investors find that they haven't quite been able to pay off all mortgages, so then need to
decide whether to sell off a final property or two or extend their property plan a year or two. It's a personal decision. Would own ...
... nine mortgage-free properties rather than ten make that much difference?
SUMMARY
• Good property selection, financial discipline, and a patient long-term plan can mean a mortgage-free small portfolio in 15-20 years. For most investors starting in their early 30s, this can mean financial security by their mid-40s. It's not a sophisticated plan -but it.does work! Like many business plans, it's 80% perspiration and only 20% inspiration!
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Neil Parmer Property Investment Adviser - Professional advice & new business opportunities for Landlords.