04 Sep New financial year resolutions
The new financial year is a great time to look critically at last year’s investing habits and identify any weak areas that can be improved for a more successful year ahead. The ability to question your investing habits and open yourself up to new ideas is key to strengthening your property portfolio and boosting your investing performance.
Alternatively, if you are considering purchasing your first investment property this financial year, it’s important to be prepared with a clear set of goals to work towards.
Pay attention to interest rates
It is always important to keep your finger on the property pulse and monitor markets across Australia. They are known to move at different times based on key growth drivers such as employment, infrastructure, population growth, housing stock shortages and changing demographics.
Aim to continue educating yourself with the use of data, market predictions and the help of expert advice. Remember, however, that the market can change and sometimes be difficult to navigate. Interest rates can unexpectedly rise at any given time and it is important not to over-leverage and put yourself in financial distress.
It could be worth checking in with your bank or Broker to see what your borrowing power is and also to make sure you have the best rates on your current loans. You may also wish to get pre-approval organised so that if a must-have property comes available, you are ready to jump on it.
Make improvements to your existing investments
If you’re not planning on purchasing a new investment property this financial year, perhaps it is a good time to focus on making some improvements to your existing properties. Renovating an investment property can reward investors with increased value, improved rental returns and, of course, additional depreciation deductions.
Before you dive into any renovations, it’s important to consider which assets attract the most depreciation deductions when replaced. Individual assets have a unique effective life, on which depreciation rates are based. If you’re considering which assets to add to your investment property, you can use BMT’s depreciation rate finder to weigh up which will give you the most returns.
Remember to speak to a specialist Quantity Surveyor before commencing any renovation work as you may be able to claim for any removed and scrapped assets.
If you’re looking to purchase your first investment property, rentvesting may be a viable option to get your foot in the door. Rentvesting is an increasingly popular way to enter the property market. It involves purchasing an investment property in a strong growth area while living in a rented property. Rentvesting allows investors to benefit from lucrative tax depreciation deductions without having to already own your own home.
Get your finances in order
Often when things get busy, paying attention to your budget can easily get put aside. If everything seems to be running smoothly, time poor investors often avoid making any changes to the way things are done. However, it is important to do regular checks and look for ways you can improve your situation now to benefit your future.
Having regular meetings with your Accountant is one way that you can be sure you are not missing out on any possible return. Don’t be afraid to question your investing habits and involve professionals to assist you to get the most from your property.
When it comes to depreciation, ensure you have a comprehensive tax depreciation schedule in place to capture all possible deductions and maximise your return. Contact the expert team at BMT Tax Depreciation to organise a tax depreciation schedule or to update your schedule if you have undertaken renovations.
Article provided by BMT Tax Depreciation.
Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation.
Bradley joined BMT in 1998 and as such he has substantial knowledge about property investment supported by expertise in property depreciation and the construction industry.
Bradley is a regular keynote speaker and presenter covering depreciation services on television, radio, at conferences and exhibitions Australia-wide. Please contact
1300 728 726 or visit www.bmtqs.com.au