How investment property owners can cover a shortfall in cash flow
Promoted by Club Money
Sooner or later, we all get caught short, even investors and property owners. Here's how you can use a cash loan to cover a temporary shortfall in cash flow.
If you're like most Australian investment property owners, you're probably looking to get ahead, to secure your financial future, and to grant yourself financial independence.
However, if you're just starting out or if you've just purchased additional properties, your monetary position may be considered 'tight'. It's an issue all investors face at some point, your funds are tied up in assets which will yield positive results in future, but in the short term, your immediate cash is quite limited.
This can lead to shortfalls in cash flow, especially when it comes to unforeseen expenses. And, as any investment property owner will tell you, unforeseen expenses most definitely occur.
So, what can investors do, should they find themselves caught short with an unforeseen and urgent expense? Well, a short term cash loan may be an appropriate solution.
Cash loans for investment property owners
There is a perception that only those in less-than-ideal financial situations consider cash loans. This is very much not true. Used responsibly, cash loans can provide a solution for all Australians, including investors.
What is a short term cash loan? A cash loan is a finance product designed to provide you with additional funds, usually at short notice and with a briefer wait time (compared to other traditional loan types).
Fees on cash loans are potentially higher than those associated with personal loans or credit cards, however, if you need money fast with a simple repayment plan then the additional cost may be justified.
In short, cash loans provide you with fast access to additional funds, typically of amounts between $250 and $1,500. This makes them suitable for covering short term and smaller sized shortfalls in cash flow.
How can property owners use cash loans?
When it comes to investment properties, the most common unexpected expenses often involve the repair or replacement of worn parts or malfunctioning home appliances.
For example, an exhausted hot water system can be the landlord's responsibility to replace. It's also something that needs arranging fast as tenants are unlikely to approve of being left without hot water for days or weeks on end.
In this instance, should your finances be tied up, you could be looking at a cash shortfall of $1,000+. A cash loan could be used to cover this cost immediately while allowing you to repay the amount in more budget friendly instalments over the coming months.
When not to use cash loans
Cash loans are, by their nature, designed to cover temporary shortfalls in cash flow. They should not be used as a solution to long term or ongoing financial difficulties.
If you're regularly having difficulty meeting your financial obligations on your investment property, then other avenues will likely be more suitable. You can read more about what to do should you fall behind on your mortgage repayments here.
There are cash loan alternatives such as credit cards and personal loans. These may take longer to apply for, however, they could be cheaper in the long run.
Guidelines for using cash loans
When it comes to loans, there are always best practices, and cash loans are no different. By following these guidelines, you can help yourself to maximise the value of your cash loan while avoiding potential financial difficulties.
- Consider your loan term, the shorter the term the less you pay overall
- Avoid borrowing more than you could reasonably be expected to be able to repay
- Enquire regarding fees, different cash loan lenders will charge different amounts
- Avoid defaults and associated default fees
This may seem like basic stuff, after all, if you have an investment property (or properties), you'll most likely be familiar with the ins-and-outs of loans. However, these are still good general guidelines to remember.
In closing
Cash loans can provide a suitable option for investment property owners who are caught short due to limitations in cash flow; they deliver additional funds when you need them, fast.
They are, however, a short term solution for temporary shortages of cash. They should not be used to address larger, regularly recurring and ongoing financial difficulties.
When applying for a cash loan, always use a reputable lender and always doublecheck the fee statement so you know exactly what you'll pay and when.
About the blogger
Club Money
At Club Money, we provide Australians with short term cash loans.
Our commitment is to delivering quick and easy finance solutions while adhering to strict responsible lending policies. We help you to cover shortfalls in cash flow, without the hassle.
You can find out more about Club Money cash loans on our website.