Maximising the earnings on your investment
By Tamara Dalziel from Complete Property Centre
Investing in property is just like running a business; it must be well managed and
focused on the right market to achieve the best returns. With the help of recent low vacancy rates throughout Australia, life has been made a little easier for many investors, however, with the probability of further interest rate rises in the near future, there is no time to relax.
Regular rent reviews are essential and the obvious way to increase the return on your investment. With January/February and then June/July being the best times of year for tenant demand, arranging for your lease renewals to fall due around these times will assist in achieving the best possible returns. Gone are the days of the standard 6 or 12 month lease agreements, investors must utilise the optimum times of year for better negotiating with current tenants or for attaining shorter vacancy periods if new tenants are required.
Upgrading your asset will also reap you rewards. As the old saying goes "you have to spend money to make money". Routine upgrades on your investment can be converted into higher returns and better quality tenants. Most investors would be surprised at the difference a coat of paint, some new carpet and a general tidy up can make to their property at minimal expense. This will encourage high quality tenants to rent your property and stay for longer periods. Many of the above repairs are depreciable, so ensuring you are utilising this with
your tax return can give higher revenues at the end of the financial year.
On speaking with an owner recently, I found that they had never claimed depreciation on their property or its contents. On doing their tax return for the previous financial year, they ascertained what they could claim and visited a tax accountant. When contacting me later, they advised that they had increased their return two fold and were over the moon.
Leaving it to the experts can make a huge difference to an investors' bottom line. A good property manager can not only save you the hassle of dealing with a problem tenant, but can also assist with regular feedback about pending maintenance issues allowing you to budget and plan for any future expenses. All fees are fully tax deductible and gives you peace of mind that your investment is being well cared for and is achieving the maximum returns.
For more information regarding rent reviews, maintenance issues or our property management services, contact our office on (07) 3257 2500. You can also obtain further information regarding tax deductions, by visiting the ATO website at www.ato.gov.au and searching for rental deductions.