|
Managing your property in the best possible way
Landlords may be sitting pretty with rents on the rise and a tighter supply of rental properties, but that's no excuse to take their investment income - and their tenants - for granted.
Go to Web Site
|
|
|
|
Putting up the rent too much, taking shortcuts with rental agreements or failure to keep up to date with paperwork, are all common mistakes that can hold back your investment.
Follow the checklist below as a starting point to making sure you're managing your property in the best way.
1. Find the best
Managing the property yourself is an option. It will cost you less, but will require your time and you will need to be prepared for unexpected problems. Some DIY landlords find it best to find tenants through an agent and then take on the day-to-day leasing themselves.
2. Know the market
When it is time to find tenants, make sure you know what other similar properties are getting in rent. Go to other open houses to see what else is on offer and whether there are many people looking to rent in the area.
Be very price-sensitive - if you struggle to find a tenant, dropping the price by a little may mean the property is vacant for as short a time as possible. Weigh up the cost of, say, $5 less over 52 weeks versus having the property vacant for four weeks.
3. Regular Inspections
Whether you are managing the property with the help of an agent, or doing it yourself, keep a regular eye on the state of the home. By conducting regular property inspections, you are able to keep an eye on any maintenance requirements and tenant issues before it becomes a problem.
4. Keep your tenants
Good tenants are too good to lose, which is why in this high-inflation environment, landlords should be careful of increasing the rent too much.
It's understandable that landlords may need to raise their rents to keep pace with rising costs. However, financial considerations should be balanced against the importance of keeping good tenants in a property. Increases that are too high may result in your property generating no income for weeks as you look for new tenants. If you do increase the rent, don't forget about topping up the bond as it may no longer cover the original number of weeks' rent. You should check with your relevant state authority for guidelines on this.
5. Insurance
Look for a policy that covers malicious damage as well as accidental damage. And make sure you are covered for loss of rental income if a tenant absconds or leaves your property damaged so you're unable to lease it for a while.
Be aware of the difference between accidental damage and normal wear and tear. The former - which can include foot traffic on carpets, scuff marks on floor coverings, minor scratches and scuff marks on paintwork and dirty hand marks on curtains and blinds - will not be covered by insurance.
The latter - accidental breaking of a window, red wine spilled on a carpet, a hole in the wall caused by a tenant moving furniture or cracked floor tiles after a heavy saucepan is dropped - will.
6. Stay up-to-date
Don't leave all your paperwork until tax time - keep up to date as you go along and you'll be much more organised.
If filing doesn't work for you, use a tax diary instead and use it to file receipts or paperwork. Make sure you claim depreciation on your investment property before June 30 and that you are working from an accurate depreciation schedule. Landlords who neglect to do so are missing out on reducing their taxable income by thousands of dollars.
Also ensure you are claiming your full depreciation entitlements. Often investors depreciate expenses such as carpets, light fittings and blinds, but fail to depreciate property owned by the body corporate that they have a part-share in. And differentiate between depreciable assets and capital works. While a cooktop, stove and dishwasher are depreciable, kitchen cupboards and sinks are not, and only eligible for the 2.5% building allowance.
|
|
|
|
|
Copyright © 2003 - 2010 URL.biz. All rights reserved. |
|
