Australians love investing in property. Generations of investors have sidestepped the more volatile share market in favour of putting their money into bricks and mortar. While many have built significant fortunes, the truth is that not all investment properties are created equal.
The good news is that there are several simple things you can do to maximise your investment property and boost the returns you’re receiving.
It begins with hiring a quality property manager who can advise you on the dos and don’ts of property investment. To get you started, here are five ways you can add value to your investment property and maximise your profits over the long term:
Target your renovations
A modern makeover of your investment property will boost the rent you can charge and make it a hot ticket for tenants. But before you start swinging your sledgehammer, it’s important to think carefully about the type of renovations you should invest in. Consider your target market here. If you want to attract professional couples, for example, some designer touches like textured feature walls and mirrored splash backs will score points. On the other hand, if families are your target market, they’ll likely respond better to more practical additions such as built-in robes and well-equipped kitchens.
Make your deductions
Renovating your investment property can also save you money at tax time. You may be able to deduct construction costs from your taxable income, claim depreciation on certain items, and make ‘scrapping’ deductions on things you throw away. For example, spending $10,000 on a bathroom renovation will not only increase the rent you can charge, but also potentially shave thousands off of your personal tax bill. Seek advice from your property manager before starting any renovations to ensure you’re maximising the deductions you can make.
Consider self-managed super
Investing in property through a self-managed superannuation fund (SMSF) can be a lucrative way to build a multiple-property portfolio, fast. You can use your existing super funds to pay the deposit on a new investment property, which means you don’t have to put cash in up front in order to buy your next property. And the tax rates you’ll pay on rental income that’s diverted back into your SMSF are much lower than regular income tax rates. Your property manager can direct you to your local SMSF expert for more information.
Don’t let repairs slide
Give prompt attention to maintenance and repair requests. Small repairs can quickly escalate into large – and expensive – major works if you ignore them. It’s a good idea to give your property manager the power to approve modest repair and maintenance requests up to a specified budget level. This allows them to organise fast repairs without eating into your time, and means they’ll only need to bother you for larger scale projects.
Keep good tenants happy
Your property manager will work hard to find reliable, long-term tenants that will provide you with a stable investment income. However, it pays to keep good tenants happy with a few inexpensive relationship builders. Consider sending a personal ‘thank you’ note when they pass inspections with flying colours, and be receptive to any requests or complaints they make. Putting in air conditioning, for example, may be a lot cheaper than finding new tenants.
Find out what the property management specialists can do for you and call us now on 0437 617 883.