Promoted by Blue Ink Finance.
When applying for a loan, lenders will use your combined income to determine how much money they will lend you. If you can increase your income, then they will most likely increase the amount they will lend to you. So do yourself a favour and make it easier for the lenders to agree to lending you money by making sure you have sufficient income to obtain your next loan.
Increase Your Income
To get yourself “Investor Ready” to purchase your first or next property, you need to consider your income. When applying for a loan, lenders will use your combined income to determine how much money they will lend you. If you can increase your income, then they will most likely increase the amount they will lend to you. So do yourself a favour and make it easier for the lenders to agree to lending you money by making sure you have sufficient income to obtain your next loan. All income, including rent and your employment are contributors to determining your borrowing power.
There are plenty of things that you can do to boost your income – you just have to be creative and willing to ask for it! Here are a few examples of how you can increase your cash flow.
1. Take in boarders or students
Do you have a spare bedroom in your home that you could open up to a boarder? International students will pay big bucks for the use of a bedroom and bathroom in your home and they’re usually so busy studying and seeing the sights that you hardly notice they’re there.
If you invite a couple into your home and provide them with meals, you can earn up to $400 a week – or $20,000 per year!
2. Buy a house with a self-contained flat that produces income
If you don’t have any spare bedrooms, consider investing in a house that provides living quarters for you and a lodger.
3. Rent out your PPOR and move into a smaller/cheaper rental property
It doesn’t have to be a long term move, however this can significantly increase your cashflow if you have plenty of equity in your home. Renting a smaller dwelling can be a great opportunity to find out what the rental process and market is like.
Some committed investors who are really serious about finding more cash may even move back in with their parents. Just one year living with mum and dad could make it possible to take giant leaps towards your financial freedom.
4. Get a part time job
Many industrious people supplement their income with part time jobs. You could:
5. Ask for a pay rise
Go in prepared: don’t just ask for a pay rise out of the blue, but instead, demonstrate to your boss the specific reasons why you deserve an increase in salary. For instance, your productivity may have increased, or you may have generated a sales lead that earns the company additional income. If you believe you deserve a pay rise, then be prepared to explain the benefits of the pay rise to your boss.
6. Change jobs to get a pay rise
If your manager isn’t responsive to your pay rise proposal, shop around for a better offer – the job market has plenty of opportunities for driven, motivated job seekers. A past client of mine who was a financial planner, increased her salary by $35,000 by moving to a new company, even though her workload, title and job description remained the same.
7. Reduce Bad Debt
There’s a big difference between "Good" debt and "Bad" debt. According to the lenders, not all debt is created equal and when you understand the difference between the two, you’ll be so much better prepared to embark on your property investing journey. Good debt is debt related to assets that produce an income for you. For example, a loan that you take out on an investment property or to invest in shares is good debt – it is tax deductible and helps you move forward financially.
Bad debt is the exact opposite: it is non-income producing, high interest debt, such as credit cards, personal loans and hire purchase agreements. These types of debts chew through your disposable income and take you further away from achieving your financial goals. In order to be successful as a property investor, you need to be proactive in creating the income you need to support your wealth creation goals. What are you going to do to achieve this?
Then before taking any further action, you must first definitely book a Complimentary Finance Review with one of our experienced Finance Coaches.
Ensuring that your budgets are in order, you are planning what to do with your finances, and that you can afford what you want… not just for the now but also the long-term success of ALL your goals.
About The Author
Blue Ink Finance
Who I am, and why I want to help you succeed.
As an award-winning Mortgage Broker with nearly 20 years’ experience in the finance industry, I’ve seen it all.
I’ve gone through constant industry changes and yet I still successfully help my customers borrow the money they need to get ahead.
As a Finance Coach, my goal is to help you understand your financial potential so that you can borrow with confidence.