Helpful Hints for Property Investors For The New Financial Year
By Peter Sarmas on 3 Jul 2013
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Source: Future Proofing Property
With the new financial year upon us, it’s time for property investors to get organised. Here are a few last minute hints that could earn you some extra cash back in your tax return.
Before you go to see your accountant, it’s a good idea to have a look at the repairs and maintenance that has occurred in the last year, and what will be required in the coming financial year. Ask your accountant what they think will be the best way to get the highest return for these costs. It would also be worthwhile to get a local property professional involved – ask a local real estate agent or property manager for their opinion.
A depreciation schedule could earn you big tax benefits, and you don’t even need to go out and spend any more money to make a claim. You can make a rental and investment property depreciation claim, and you can also claim depreciation on the items contained within the property. (There are more than 1500 items identified by the ATO as depreciable assets, so make sure to check them out here! Enlist the help of a quantity surveyor to carry out a comprehensive, personalised depreciation schedule which outlines the deductions available to your property to make a claim.
If you use a property manager for your investment property, make sure you put the money you pay them to good use. A proficient property manager should have on hand a set of immaculate end of financial year records which state their fees and any other expenses related to the property that you might have incurred throughout the year, all which may be tax deductible. Ask them for a copy of all relevant information and this should make your or your account’s task much easier.
While you are spending so much time thinking about the property, it could be a good time to research the market to consider a rent review at your next available opportunity. Recent years have seen rents growing solidly in many areas, and your property could have the potential to be earning you more than it currently is. Do your research and find out what similar properties in the same area are bringing in. Be mindful not to go too far though – an appropriate increase may serve you well, but if it’s going to cost you a great tenant, it’s probably not worth it.
Thinking long-term, what are your goals? Are you on track with where you planned to be when you began this venture of buying an investment property, or could your money be working for you more efficiently? In what ways could you improve the property in order to raise the rent? Should you renovate? Would it be wise to update the kitchen? Or the carpet? Or perhaps install a new oven, or a new air conditioner? This is a great time to re-evaluate your property investment plan annually to make sure your money is doing as much as it can for you.
