Why a property portfolio health check is just as important as your own

Why a property portfolio health check is just as important as your own

Property Portfolio checkup

Regular health checks are a great way to pick up on early warning signs – that irritable cough you’ve been having may well be the beginnings of asthma. Who better than your GP to diagnose any problems and set you on the straight and narrow?

Just as important is the good health of your property portfolio. Like many Australians, you may be saving for retirement and this nest egg will be one of your major sources of income.

If things aren’t set up quite right, it could cost you a lot of money

My clients have the added benefit of an annual portfolio review – something your own property investment specialist should provide. This is a time to assess whether your current strategies are effective or if there is need for change.

Tax variation review

Tax variation is key to my property investment cashflow strategies. It’s an average of $200 in an investor’s pocket each week, paid back to them via PAYG or BAS. This ‘mini tax return’ is then used to meet the gap on mortgage repayments, rather than an investor having to find cash from their own reserves. If you’ve changed jobs throughout the year, your tax variation will need to be updated accordingly and is best prepared by your Accountant.

Rental income assessment

Your investment property may be on a 12 month lease, but annual rental reviews should feature in the contract. Ask your property manager to look into local rents to ensure maximum return on investment.

Depreciation schedule assessment

Any improvements or upgrades to your investment property need to be reflected back via your depreciation schedule. You don’t want to miss out on this fantastic tax advantage, so it’s best to get the figures set up properly.

Current cashflow projections

Annual insurance premium and council rate increases will affect your bottom line. Don’t sit on your current cashflow just because it’s done – it’s a fluid thing and needs to be updated. This will help clarify whether a coinciding rent rise should be on the cards – and how much wiggle room there is in the budget.

Mortgage assessment

Whether you’re on a fixed or variable mortgage (or a combination of both), there’s always an option to go back to your broker and look at refinancing. Even with fixed mortgages, there can be ways of breaking out if another deal is attractive enough cover any additional costs. Every extra bit of interest paid eats into your profits so save money where you can.

Insurances review

Perhaps you’ve become a parent and you’re now based at home full-time, or maybe you’re at the other end of the scale and you’ve finally left the workforce. Review your insurance premiums accordingly – they’re not much use if the terms and conditions are contingent on your employment status. Cross it off the ‘to do’ list before it becomes a problem.

Why it pays to get professional advice

When you’re busy, it’s hard to keep all the balls up in the air. Annual portfolio reviews require considered evaluation. If you don’t have the resources, it’s best not to let this essential check up slide. Call in a property portfolio specialist like myself and you’ll be in capable hands. As with your health, it’s best to pay heed to the warning signs before it’s too late.

Is your portfolio is reviewed annually?

As always, if you have any question, please leave a comment below.

Until next time,

From the desk of Christine.

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