Rental Property Newsletter 1
Tips, news and inspiration for the savvy property investor.
What Should be Covered in a Property Inspection Report?
Regular property inspections help you proactively identify any issues with your property before they turn into bigger costly problems. Not only can this save you money, but it keeps communication open between your tenants and either you or your property manager too. Keep reading for an overview of what routine inspection reports should look like so you know that you have everything covered.
What's included in a routine inspection report? All of the things that should be checked to maintain the condition of your property, plus any grievances a tenant may need to be addressed should be actioned with each inspection. By addressing problems quickly, you can save money by fixing things when they only need minor repairs. You and your property manager will also demonstrate that you care about your tenants and want to make sure they're happy and comfortable in the property, ideally long term.
Most property management software programs will generate a list of what should be included in a routine inspection report. Using these templates is important as they are created to ensure they meet the relevant tenancy regulation in your jurisdiction. Generally, the list of things to check and report on will be listed by each room. For example, following general details such as the tenant's information, the report will delve into items to check in the kitchen, bathroom, bedrooms, living areas, and laundry. Items to check within each area may include fixtures and fittings, flooring, windowsills, windows, and walls. The kitchen will include more things to check, such as the dishwasher, oven, stove, and exhaust fan.
Don't forget photos and videos
Make sure photos and videos are taken throughout the inspection to capture any areas that require further attention and to record the property's condition. Many programs will allow you to attach photos and video files to the report. If you don't have this functionality, simply saving the photos in a separate folder under the inspection date will suffice. The key is having detailed records and saving these in case you need to refer to them in the future.
Storing and building on previous reports
Once an inspection is completed, you should enter the information into your property management software as soon as possible (if you're not entering inspection information electronically at the time of inspection). Having an accurate record at each inspection time will allow you and your property manager to monitor things that may improve or deteriorate over time. This is particularly important for entry and exit inspections.
Inspection reports provide a valuable snapshot of your property's condition by checking and documenting everything on a detailed list. Whether you're using fancy technology to generate reports or simply downloading and printing the correct reporting forms, maintaining a regular schedule of inspections will keep your property in top condition and your tenants happy.
4 Steps to Getting Ready for Tax Time as a Property Investor
With the end of the financial year recently arriving, now is an opportune time to get all of your documents and information ready for you or your accountant to prepare your tax return. As soon as you have an asset such as an investment property to account for each financial year, there's an opportunity for tax savings to derive the most value possible from your property. However, you can't do this without all of the right records. Below, we've outlined everything you need to prepare for tax time as a property investor.
Check what income you need to declare
The first thing to check at the end of the financial year is how much income you derived from your property throughout the year. This income will likely include rent but may also include rental bonds from tenants who default or any other booking fees, and payments received.
Maximise your deductions
As a property investor, there are several expenses you can claim. On their website, the Australian Taxation Office states, "You can claim a deduction for your related expenses for the period your property is rented or is available for rent." Common deductions you can claim include repairs, management and maintenance costs, interest on bank loans, renovations and improvements, and depreciation. Remember, large-scale renovations have to be deducted over several years, similar to depreciating assets, as these are classified as capital works.
Capital gains tax (CGT)
If you sold an investment property in the financial year, you might need to pay capital gains tax (CGT). CGT has to be paid in the year it is incurred. It applies to any profit you make from selling your investment property. The capital gain on your property is the sale price of your property, less all expenses paid to manage it.
Keep accurate records throughout the financial year
You can save time and headaches at tax time by keeping detailed and accurate records throughout the financial year. If you haven't already, consider setting aside some time each month to review the documents for your investment property. This will include documents such as rent receipts and ledgers and receipts for repairs and maintenance. Further, having a quantity surveyor draw up a depreciation schedule can help you maximise your deductions. They will be able to estimate the useful life of the depreciable assets in your property so that you can include these as deductions in your tax returns.
Tax time provides a great opportunity to assess how your investment property performed throughout the year. Considering what worked well, what didn't work, and how you can derive more value from your investment property in the next financial year will help you ensure your property is helping you meet your wealth-building goals. Remember to talk to your accountant for specific advice on meeting your tax obligations while maximising your ability to claim the deductions available.
For any further information about your investment property or any other real estate matter please don't hesitate to contact Domenic on 0420 417 779 or email [email protected]
