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7 Things To Do Before Renting

Raj Rana • May 10, 2021

Are you thinking about moving to a new house but want to hold onto your current property? Turning it into an investment for the short or long-term can be a good option while increasing your cash flow. 


But before you do, here are seven things you need to do before renting out your home. 


1. Speak to the team at Devonshire Accountants

Speak to our expertise team that will guide you through the various deductions available and any negative gearing calculations in detail. Its an important step in planning the tax implications that you can have when preparing your tax return. Our team will also fully explain the deductions available and compliance that is required by you towards the Australian Taxation Office (ATO)


2. De-personalise the property 

While the property is still yours, it's important to make your future tenants feel like it's their own. Happy tenants will go the extra mile to look after it. This means removing the personal items in the property from when it was your home. Remove the kids' height measurements from the walls, the family dog's outdoor kennel and have all mail redirected. 


3. Fix those 'maintenance request' risks early 

If it's broken, fix it. It mightn't seem like a big issue – maybe it's just a small crack in the wall or peeling paint – but putting it off is just creating a future problem for yourself.  Making it a future problem may also make the small issue into a big one. For example, a tired-looking deck now could just need re-oiling but leaving it for later could result in a full (and costly) deck replacement. 


4. Do smart improvements 

If you're thinking about making some slight improvements to your property before renting it out, keep improving your rental return and tenants in mind. Smart improvements will increase tenant interest and the amount of rent you can charge. For example, if your tenant market is young families, installing a bathtub can be a good choice. Easy-to-clean benchtops and flooring options are always a winner with tenants, too. An additional point to keep in mind is the timing of the improvement. If you make an improvement while you still live in the property, you won't be able to claim depreciation on any new plant and equipment assets. So it might be best to wait until you have moved out.

 

5. Clean 

Your future tenants need to leave the property in the state it was first leased in (allowing for fair wear and tear). Your property manager will complete a condition report to ensure this happens. To make sure you can keep your tenants accountable, it's important to also do your own part. Your property manager could also recommend a reputable cleaner to get the job done. 


6. Update your insurance policy 

Your owner-occupier home and contents insurance won't cut it when the property is an investment. You need the appropriate landlord insurance policy. Landlord insurance will cover you for many insured events, including those unique to investment properties like tenant damage and loss of rent. Insurance policies differ between providers, so it's important to read the fine print when choosing the best-suited policy for you. 

 

7. Get a depreciation estimate 

Too many people are missing out on claiming thousands in depreciation deductions. Depreciation is the natural wear and tear of a property and its assets over time. As a property investor to-be, you can claim this depreciation as a tax deduction each financial year once the property is available for rent. When you make your home an investment, contact a specialist quantity surveyor, such as BMT Tax Depreciation, to provide a free depreciation estimate. This could uncover thousands in deductions that you could claim. To learn more about depreciation estimates, please contact BMT 

 

Contact us today on 07 3800 0807 to discuss how we can assist you with your Investment property.

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Top 4 things tenants want in a rental

By Raj Rana • 13 Dec, 2021
Whether you're thinking about purchasing your first investment property, adding to your portfolio or turning your home into an investment, you need to know what tenants want. 1. Location It's impossible to know what a specific tenant will want location-wise. But this is where it's important to identify your target tenant market and what they want in their location. For example,, families may be looking for school districts, while students will be looking for accommodation close to learning institutions or with transport routes. 2. Safety and security Everyone needs to feel safe in their own home. Tenants will want a property with secure locks and doors, lockable windows and window coverings for added privacy. Looking into the safety of an area could also be a good move when finding an investment property if you're unfamiliar with the area. Research crime statistics and history to get a gauge on the area and how this may impact potential tenant demand. 3. Move-in ready condition The last thing a tenant wants to do is submit maintenance and repair requests while they are in the process of moving house. Getting all the little things sorted before they move in is a must. Work through any items with your property manager and ensure everything is covered. The benefit of doing this early means a more comprehensive entry condition report, plus you get to claim any maintenance and repair request as an instant tax deduction in the same financial year. 4. Renovations and upgrades A modern and aesthetically appealing space doesn't just appeal to more tenants, it allows you to charge a higher rental rate to improve the cash flow of your investment. The roadblock to this is always going to be the costs involved. Renovations and upgrading a property isn't cheap. But claiming property depreciation as a tax deduction at take time can make a big difference to cash flow. Depreciation is the natural wear and tear of property and assets over time, and is the second highest tax deduction available to investors after loan interest repayments. When you renovate a property or upgrade an appliance like a dishwasher with a new one, you can claim depreciation on the improvement. Depreciation is claimed each financial year across an asset's or structure's depreciable lifetime. But just because something needs to be depreciated doesn't mean you have to wait years to claim back the full amount. Depreciation incentives like the 'immediate deductions' allows you to instantly claim some assets that cost less than $300. For example, if you purchased a new ceiling fan that costs $250 for your investment property, you could claim its full cost instantly in the same financial year. To learn more about how depreciation works for renovations, contact our office on 07 3800 0807 Article Credit in conjunction with BMT Tax Depreciation. BMT Tax Depreciation has been working in the property investment industry for over twenty years.

Top 5 Tips For New Investors

By Raj Rana • 12 Apr, 2021
As you start your property investing journey, you will find different opinions in every corner and an overwhelming amount of information. The secret to getting on the front foot is keeping it simple. With over twenty years of experience in the property industry, BMT Tax Depreciation and Devonshire Chartered Accountants share their top five tips for new investors. Determine your investment strategy It's important to establish your game plan. While this may change over time, having a baseline is essential. Some examples of investment strategies include purchasing multiple properties in a relatively short period of time, across geographical locations to mitigate risk or building a portfolio to support the retirement phase. Take the time to determine your strategy before looking for a property. Ask yourself what the end goal is and how your choice in properties can help you get there. Do the research You can't predict what is going to happen in the property market, but you need to have a solid idea of the market you're joining. The first step is understanding the location you're entering as this will help you understand the type of return you can expect and the specific tenant market. Looking at the property trends in the area, demand and supply, the local demographics and employment rates are some key indicators of how the property will perform. The second step is researching the property itself. Not only do you need to ensure the property fits into your budget, but you also need to understand how it will impact your cash flow in the long term. Tools such as PropCalc can help you make an informed decision by showing how the purchase will affect your cash flow. This tool allows you to customise data such as income, expenses and tax deductions for the property. You can also compare properties, view and save a range of personalised property reports. Head over heart approach Mortgages are a big commitment, and this sometimes leads to new investors choosing properties they like or could even see themselves living in. However, it's important to remember that this is an investment decision, and you need to take a practical approach. This means you're looking for a property that is likely to be leased out consistently. Determining your 'ideal' tenant in your investment strategy is essential to do this successfully. For example, if your ideal tenant is a single working professional or couple, a low maintenance property is preferred. Meanwhile, if you're targeting small families a property with a yard, multiple bedrooms and a practical living space is ideal. Build your investment team Surrounding yourself with an experienced and reliable property investment team is essential to your success. These are the people that will make your life easier throughout your investing journey. The people in this team depends on your scenario, but an accountant and property manager are a good place to start. Your accountant is there to manage your taxes and to help you maximise your property's cash flow while ensuring full compliance is maintained. Your property manager oversees the day-to-day operations such as finding tenants, collecting rent and responding to maintenance or repair requests. Both your accountant and property manager will also work with a specialist quantity surveyor. A quantity surveyor gets involved when you purchase the property and if you make any improvements. They prepare the tax depreciation schedule to ensure you can claim depreciation deductions for the lifetime of the property (up to forty years). But what is depreciation and why do you need this schedule? Depreciation is the natural wear and tear of a property and assets over time. Only owners of income-producing properties can claim depreciation as a tax deduction each year and this is where the schedule comes in. The tax depreciation schedule identifies everything on the property that can be depreciated. An accountant uses this schedule to determine the depreciation deductions each financial year. Article Credit - BMT Depreciation Experts Contact Devonshire Accountants today on 07 3800 0807 to discuss how we can assist you with your Investment property.
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