End of Financial Year Checklist for Property Investors: A Property Manager's Perspective
As the end of the financial year is fast approaching, it's an excellent time to reflect on the performance of your properties, make necessary adjustments, and plan ahead.
From our experience, we have compiled an 8-step checklist to help you maximise your rental return and position yourself for success in the next financial year.
1. Review Insurance Policies
Reviewing your property insurance policies to ensure that your coverage is up to date and that you have adequate coverage for your investment properties. We suggest contacting your insurance provider or broker to discuss any necessary modification or to explore options to save costs without compromising coverage.
2. Evaluate Mortgage Rates
Given the recent interest rate increases, it is important to review your mortgage rates to optimize your investment returns. Completing research of current offers and compare them with your existing mortgage rates. Contacting your bank to see if they can provide you with a better option or consider refinancing to secure more favourable rates. Lowering your interest rates can significantly impact your cash flow and overall profitability.
3. Assess Budgets and Financial Goals
Take the time to work on your financial goals and budgets for the upcoming year. Review your income and expenses and ensure they align with your objectives. Put together a budget of anticipated rental income and expenses such as maintenance, repairs, taxes, and property management fees. Revisit your long-term investment strategy and adjust your budgets accordingly.
4. Gather All Expenses
To ensure you are maximising your tax deductions and accurately calculating your property net income, gather all incurred expenses during the financial year. This will include any invoices for repairs, maintenance, utilities, insurance premiums, land tax, property management fees, body corporate and any other property-related costs. Keep organised records to simplify the process of preparing your tax returns.
5. Tax Depreciation
Consider getting a tax depreciation schedule completed for your property from a Quantity Surveyor. A tax depreciation schedule is a deduction against assessable income allowing you further tax deductions for the depreciating value of your Hobart investment property. The fee to get this schedule is also tax deductible.
6. Conduct a Property Inspection
Schedule a routine inspection to assess the condition of your Hobart investment properties. Look in detail for any necessary repairs or maintenance issues and address them quickly to prevent additional costs. Consider potential renovations to improve your property that could increase the value and desirability of prospective tenants. A well-maintained property will attract quality tenants and minimises vacancies which provide you with a steady rental income stream.
7. Review Rental Returns
Evaluate the performance of your rental returns against your financial goals and budgets. Consider factors such as market conditions, vacancy rates, rental rates, and tenant turnover. Look at the current market and compare your rental rate and plan for potential rent increases if justified by market trends and tenancy laws. Evaluate the overall profitability of each property and determine whether any adjustments need to be made.
8. Assess Property Management
Reflect on the performance of your property manager over the past year. Are you satisfied with their services? Consider aspects such as communication, responsiveness, tenant retention, and their ability to minimise vacancies. If you're not entirely satisfied, start exploring alternative property management options that better align with your expectations and will help you to achieve your investment goals.
The end of the financial year provides property investors with a valuable opportunity to reflect on their investments and make informed decisions for the upcoming year. By following this comprehensive checklist, you'll be well-equipped to maximise your financial returns and achieve long-term success.
Reach out to our experienced team if we can assist you with any of your property investment needs.
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