Emma Thorpe, associate director of property management at Realmark Urban, offers her expert advice for investors wanting to ensure their investment achieves its optimal results.
“There are many great tax benefits for investment properties to reduce your taxable income, including depreciation and deductible expenses,” she said.
Depreciation is an accounting method used for calculating the loss in value of a building or improvements over time.
The Australian Taxation Office (ATO) allows property owners to claim this depreciation as a tax reduction if they obtain income for their property.
“To claim depreciation a schedule will need to be drawn up by a quantity surveyor to help you accurately assess the property and claim these deductions,” said Ms. Thorpe
“In regard to expenses, you can claim rates, interest, insurance, property management fees, depreciation, capital works and other ongoing expenses such as maintenance, repairs, or improvements.
“You cannot claim expenses related to personal use of the property, such as tenants' utility bills, borrowing costs against the equity of the property or costs related to the purchase or sale.”
She advised maintaining organised documentation of all income and expenses related to your property will simplify the process when it comes to the end of financial year.
“This succinct record keeping process is an essential part of our Property Management service at Realmark Urban. In doing so, your Property Manager will ensure informed and transparent communication,” Ms. Thorpe added.
“For those that do not already work with an accountant or financial advisor, we encourage you to engage with one to not only assist with your tax return but to offer informed financial advice,” she said.
Emma Thorpe also recommends reviewing your property's insurance cover at this time of the year as well, to ensure it is up to date and adequate for the property's current value.
“Policies and terms can vary with different providers making it essential to read the finer details. It is a good opportunity to review the rental rates for your properties, ensuring they meet market value,” she said.
“Your Property Management team at Realmark is constantly analysing the current rental market to ensure you are getting the most out of your investment and can advise you on the best options to maximise your returns.”
For more information on investment properties and property management options contact Realmark for an obligation-free chat on (08) 9328 0999.