The ink has dried on the contract and the keys are in your hands.
Congratulations! You’ve done it. You’ve bought your investment property and you’re on the way to achieving your financial dreams.
Yes, the hard part of searching for a property, raising the finance, doing the paperwork and negotiations is over, but there are a few more ‘i’s to dot and ‘t’s to cross to ensure you get the full benefit of your new investment.
Valued for depreciation
Hiring a quantity surveyor to work out a depreciation schedule is something often overlooked by many investors. Over time, properties and items in them do suffer from wear and tear and lose value, and this can be used as a tax deduction. A quantity surveyor will look at two allowances:
- Plant and Equipment – items within the building such as carpets, dishwashers and ovens
- Building Allowance – the construction costs of the building itself such as brickwork and concrete
The ATO allows investors to claim depreciation as a tax deduction. It can be complicated to calculate, but a quantity surveyor can do it for you. Yes, you will have to pay for an expert to draw up your depreciation report, but the savings you make will be worth it – and the cost of hiring the surveyor is often tax deductible too.
Use a property manager
Yes, we know we’re biased, but a good property manager will seriously take the stress out of caring for your investment. They’ll find you good tenants, manage all communications with them, make regular inspections and update you with reports. They’ll take the call at 3am if there is a problem! A good property manager will give you peace of mind that your property is being properly cared for while you get on with putting your time and energies elsewhere.
It is imperative you keep good records so you maximise your tax return. Your property manager will keep records, such as rental, maintenance and council tax payments, as a matter of course. But you may be able to make other claims on your tax such as expenses associated with visiting the property, insurance and payments to strata corporations.
Cover yourself for the unexpected; no matter how new your property is there is always the risk of storms or tenants inadvertently damaging property. There are a lot of companies now offering landlords insurance, but remember, the cheapest may not necessarily be the best. Use some of the comparison websites to see what is or isn’t covered, what the excesses are and always read the small print.
Yes, your property is nicely ticking over, but it’s always good to review the situation. For instance, if you’re paying the water bill, consider putting in water saving devices or, consider other additions such as installing an air-conditioner, redecorating or upgrading security to encourage your tenants to stay longer. Make sure too, you are in-line with current legislation such as having smoke alarms and appliances regularly checked and serviced. A good property manager can advise on these aspects.
If you’re interested in finding out more about property investment, our knowledgeable and experienced team can talk you through the process and tell you what to consider so you can make informed decisions.
Newcastle Property Management have helped hundreds of property investors realise their dreams over the past 40 years, so give us a call on 02 4954 8833 or pop into our Cardiff office for a chat.