Tax optimisation strategy? A mortgage broker can help

A highly effective partnership between an accountant and mortgage broker can be an outstanding solution for time poor clients – especially at tax time. For example, one of our clients Daniel was advised by his accountant to consider a property purchase as a tax minimisation strategy for his successful motor mechanic business in Fitzroy.

Time was of the essence

Daniel had an urgent need to meet Australian Taxation Office requirements – and a distinct lack of time for the business owner to make it happen.

“Most days, I can barely make time for a lunch break, let alone consider arranging home loan finance – it’s not unusual for me to do a 14-hour day,” he told me. “Every meeting with my accountant takes place out of business hours, just to keep up with my preparation for tax time.

“So when my accountant suggested I purchase another property to minimise tax, my first question was “that sounds great – but can you organise it for me?”

Daniel’s accountant works with Custom Financial frequently, so when he called and explained the situation, it was simply a case of ‘let’s hit the ground running’.

With time poor clients, a mortgage broker can add great value

In the case of a time poor client such as Daniel, there are several important ways a mortgage broker can add value.

  1. It’s essential to be fully informed before the first meeting occurs. Thanks to my close relationship with Daniel’s accountant, I had all the financial information I needed before we met – and a few solutions in mind, too.
  2. If a client has a confirmed borrowing amount but no time to look for a property, a buyer’s advocate is often the best way to go. It’s vital to have an advocate your client can trust. Mortgage brokers work regularly with quality buyer’s advocates.
  1. If the client is investing very limited time in the purchase, they’ll need good legal representation to review contracts and arrange conveyancing. Mortgage brokers undertake regular work with lawyers and will be able to offer a referral.
  2. In most cases, the mortgage broker co-ordinates most of the purchase process, not only looking after your client’s loan, but making sure settlement occurs easily. As brokers are normally only paid once the loan is settled, there is a big incentive to get the job done. It’s unlikely a big bank employee will have the same motivation.
  3. A mortgage broker is mobile; able to meet with a client when and where it suits them. Daniel was unable to leave his workplace during the day and preferred a meeting during business hours, so he could get home to his family in the evening, so I went to meet him at his business in Fitzroy.

A great solution for Daniel and his accountant as well

Thanks to his strong financial position and a full briefing by the accountant, my first meeting with Daniel went like clockwork.

In Daniel’s feedback after the property was purchased he said, “Patrick was clearly well informed, professional and incredibly efficient. He knew I didn’t have time to waste and had the solutions I needed right from the start,”

With good equity behind him, Daniel was able to take advantage of pre-approved finance. I presented this option to him at our first meeting, so he knew exactly what his borrowing amount was and that he could make his purchase quickly. Pre-approved finance is an excellent solution, as it gives the buyer confidence and negotiating power.

Within two months, Daniel had borrowed $550,000, purchased an investment property out in Airport West for $520,000 and covered all of his associated costs. It was a fast turnaround that would not have been possible without the assistance of a mortgage broker.

“With my investment debt at a higher level, I’m now using my other investment property to support the new purchase. My family home is not in the mix at all, which means security moving forward, in case anything untoward happens. It’s a good strategy.

“Patrick did all the legwork and I didn’t lose a second of work time having to arrange finance. It was fantastic to have him on board.”

Daniel is delighted with the outcome.

Regular Communication is a Critical Factor

One of our key values at Custom Financial is regular communication. It’s absolutely critical during our liaison process, especially when meeting tax deadlines.

We also take great care to ensure that we follow an accountant’s advice to the letter, so that financing takes place in line with their strategy and expected outcomes.

Daniel’s accountant gained enormous peace of mind knowing that Custom Financial was taking good care of his valued client, and Daniel’s tax requirements were satisfactorily met.

Top tips for working a mortgage broker for your clients

So, what are my top tips for working with a mortgage broker?

  1. As an accountant, you don’t want your client to be led into something that will reflect negatively on you. Don’t suggest a particular property or recommend property investment seminars run by property spruikers.
  2. Look to build a relationship with an experienced and trusted mortgage broker, preferably a broker with investment property expertise.
  3. It’s vital to work with a broker who is at ‘arm’s length’ from your business, in order to avoid any conflict of interest. You also need a broker who works independently, with no alliances to investment property companies.

Do you have time poor clients with specific tax needs? A mortgage broker is a great solution and will provide you with great peace of mind, too.