Finding the right investment property that ticks all the boxes takes time, patience and a whole lot of smarts. The best place to start is with the basics.
Here are the essential tools and tactics every budding investor needs to know.
Understand your investment options
There are a range of investment strategies and schemes to choose from – think carefully about which one is right for you. If you’re on a tight budget and want to build your portfolio quickly, a cash-flow-positive investment could be the ideal solution to put money in your pocket and offset mortgage costs.
Then again, maybe you’re after a more solid, long-term option to help you through retirement. Self-managed super funds allow investors to purchase and hold property through a super fund, and can offer big tax benefits. On the other hand, a government-backed program like the National Rental Affordability Scheme could be a viable option, providing the community with affordable rentals while offering tax-free incentives.
Don’t forget depreciation schedules
Did you know you can claim the depreciation of your investment property against your taxable income?
There are two forms of allowances available to investors: depreciation on plant and equipment (think carpets, air conditioners, etc.) and depreciation on building allowance (this covers the building itself, like concrete and brickwork). Come tax time, a depreciation schedule essentially lowers your taxable income and helps you pay less tax.
Property managers are priceless
The real work starts once you’ve bought your investment property and suddenly have to manage the building, maintenance, tenants and rental income. Skip the stress and save yourself a whole lot of time and money by hiring an experienced property manager who can look after these day-to-day details.
Stay on top of rental increases
If you’re serious about building wealth through your investment, you need to approach it like a business, and this means increasing rents when appropriate. An expert property manager will be able to guide you on the best times to incrementally raise rents in line with the market and which rates best meet your market.
Hire the right accountant
Get the most out of tax time with an accountant who specialises in services for property investors. The right accountant can advise you on tax-effective strategies that will help you grow and protect your wealth.
Find (and keep) the right tenants
Good, reliable tenants mean steady rental returns and low vacancy rates. This is where your property manager comes in, as they have the expert knowledge needed to find, screen and match the right tenant with your property. Once you have tenants, work with your property manager to ensure that relations remain strong and steady, as good communication will prevent any tenant issues from escalating.
Maintain your property
Keeping your property in good shape not only keeps tenants happy, it can also save on bigger, more expensive repairs down the line. Stay on top of everyday maintenance as well as larger repairs that will preserve your property’s value.
For more advice on managing your investment property, contact Sydney rental property management specialists K.G. Hurst.
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