Now the beginning of the new financial year is upon us, it is time to sit down and go through your finances.
Begin to ask yourself questions like…
1. Where did I make a saving last year?
2. Could I have saved more if I had completed a budget or included expenses I didn’t realise could be claimed…
3. How well structured are my assets and liabilities? Would it be worth seeking some professional advice?
Let us start by helping you with a list of property expenses that you should be keeping track of…*Note that we are not giving tax advice, but simply sharing a list of expenses we recommend keeping track of.
Property expenses that could be tax deductible:
• Interest on your Investment Loans
• Legal fees
• Lender Mortgage Insurance
• Building and pest report fees
• Pest control
• Stationary, phone and postage
• Body corporate fees and charges
• Rates and water charges
• Insurance (building, contents, landlords)
• Property Agent’s fees and charges
• Advertising for Tenants
• Land Taxes
• Repairs, maintenance, cleaning and garden maintenance
• Pest control
• Depreciation costs (Order a report for this year’s tax return!)
What other savings can you make on your property?
1. Are you charging enough rent? When was the last time you received a comparable market analysis? When did your last rental increase take place? *Note that rent should be assessed every 6 to 12 months.
2. When is your lease expiring? If it is in a period where the market is slower perhaps you can reduce vacancy rates by getting the lease to expire on a different month of the year?
3. Is your property manager getting you the best quote for repairs? Ask to see at least 3 quotes! *Note that not all repairs are mandatory ‘Office of Fair Trading’ website for more details…
4. Ask for copies of invoices/rates, especially Strata rates as Property Managers could be late paying them and charging you the interest!
5. What extra fees and charges are Property Managers costing you? *Note that for client retention some Agencies will give you discounts on lease renewal fees, advertising costs and admin charges…
Could it be time to revise your existing loans?
1. What interest rates are you currently paying? Is your rate still competitive and fair?
2. Have you noticed your rate has increased or your interest only period is due to expire?
3. Has your intro special fixed rate expired?
4. What annual fee and ongoing chargers are you paying? Are they higher than they need to be?
Addressing these questions could collectively save you thousands every year! We would also highly recommend seeking advice from an Accountant as they are able to give you tailored tax advice that is best suited to your individual situation.
Of course we are here to answer any questions you may have too, so please feel free to get in touch if you would like more help! We also have great excel workbooks for budgets and dividing up your expenses making tracking and recording so much easier. By sharing these tools and tips with you, we feel we can really help clients visualise their savings and make adjustments easily for the years ahead!