Maximise Your Property Investment Returns: End-of-Year Checklist
As the end of the financial year approaches, it's a prime time for property investors to review the performance of their properties, make necessary adjustments, and plan ahead. Drawing from our experience, we’ve 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
Ensure your property insurance policies are up to date and provide adequate coverage for your investment properties. Contact your insurance provider or broker to discuss any necessary modifications or to explore cost-saving options without compromising coverage.
2. Evaluate Mortgage Rates
With recent interest rate fluctuations, reviewing your mortgage rates is crucial. Research current offers and compare them with your existing rates. Contact your bank to see if they can offer better options or consider refinancing to secure more favourable rates. Lowering your interest rates can significantly enhance your cash flow and overall profitability.
3. Assess Budgets and Financial Goals
Review and adjust your financial goals and budgets for the upcoming year. Analyse your income and expenses to ensure they align with your objectives. Prepare a budget that includes 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 maximise your tax deductions and accurately calculate your property net income, gather all expenses incurred during the financial year. This includes invoices for repairs, maintenance, utilities, insurance premiums, land tax, property management fees, body corporate fees, and any other property-related costs. Keeping organised records will simplify your tax return preparation.
5. Tax Depreciation
Consider obtaining a tax depreciation schedule from a Quantity Surveyor. This schedule provides a deduction against assessable income, allowing further tax deductions for the depreciating value of your investment property. The fee for this schedule is also tax deductible.
6. Conduct a Property Inspection
Schedule a routine inspection to assess the condition of your investment properties. Identify and address necessary repairs or maintenance issues promptly to prevent additional costs. Consider potential renovations to improve your property’s value and appeal to prospective tenants. A well-maintained property attracts quality tenants and minimizes vacancies, providing a steady rental income.
7. Review Rental Returns
Evaluate the performance of your rental returns against your financial goals and budgets. Consider market conditions, vacancy rates, rental rates, and tenant turnover. Compare your rental rate with the current market and plan for potential rent increases if justified by market trends and tenancy laws. Assess the overall profitability of each property and determine if any adjustments are needed.
8. Assess Property Management
Reflect on your property manager's performance over the past year. Are you satisfied with their services? Consider factors such as communication, responsiveness, tenant retention, and their ability to minimise vacancies. If you’re not fully satisfied, explore alternative property management options that better align with your expectations and 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 maximize your financial returns and achieve long-term success.
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