This time of the year is often the most important as we’re only 3 months away until June 30 and investors are wanting to make sure that they are getting the most deductions available to them when they lodge their tax return.
So here are my top three red flags to look for as a property investor (aka landlord).
1. Will the cost of any renovations, upgrades or repairs bring in the right return on investment (ROI)? We all know that things over time need addressing. Fresh carpet, repaired door handles, fresh coat of paint – and these things are all important to attract the right tenant to pay the right rental figure for your portfolio. However if you need to spend $50,000 to upgrade the kitchen in that older property you bought as a rental be very careful (and absolutely sure) that you will receive a ROI. If these costs are about to come up in an existing home in your portfolio – now is the time to make a decision about selling or holding.
2. Is there enough equity available to re-invest and significantly increase your portfolio value? Even though you will be subjected to Capital Gains Tax (CGT), some landlords have realised that by accessing the significant equity in an existing property of their portfolio – they will be able to tap into the current property boom and re-invest in two new younger properties that need less maintenance and will bring twice as much income in areas that are about to experience significant growth!
3. Is your portfolio doing what it’s supposed to be doing? Simply put do you know if its going to be able to fund your retirement with the annual income goal you desire. Do you need more? Do you need less? Do you need a different type of property for more security? If you don’t keep track of this part it can be a rude shock when you retire because I can assure you that what you decide today will significantly change by the time you retire as your goals and needs will change over time!
If you would like me to run my eye over your portfolio and check for any red flags and give you some recommendations that you can consider in conjunction with advise from your accountant.
For an investment of $197 (which is tax deductible) I am happy to review your portfolio and sit with you for an hour and share all of my findings so you can make a decision on what your next strategic step will be.