Property is a solid investment, not only for the capital gains, but for the regular rental returns that help you pay off the mortgage.
But could you be making more? Here are five tips to help you maximise your property investment returns.
Install the add-ons renters love
When looking at properties, renters look for appliances and features that will make their lives easier and more comfortable. Most popular are dishwashers, heaters and air-conditioners. In between rentals, installing these items will enable you to up your weekly rental, and will usually mean your property is snapped up faster.
Know your deductions
Of course, another benefit of improving your property is that you can usually claim the expense on your tax return. A new financial year provides the perfect opportunity to take advantage of deductions that decrease your taxable income. These can include fixtures, appliances, carpets, furniture, bathtubs, swimming pools, doors, handles, locks and repairs.
You'll appreciate the depreciations
Long term property investors know that depreciation can sometimes save them many thousands of dollars. New investors though, are often none the wise. In Australia, property investors can claim tax deductions on the falling value of the buildings structural elements and items considered part of it. You can claim depreciation for wear and tear on items considered part of your property, like ovens, dishwashers, blinds and carpets.
Be smart with upgrades
It's important to renovate your home to keep it fresh and appealing in the current market. But that doesn't mean that every expense is a good one. A coat of paint or new floor coverings are easy and relatively inexpensive, but will increase the value and desirability of your home. On the other hand, expensive renovations may not be reflected in rental returns, and might put your property out of action for months while renovations are completed.
It's that time of the year
Just as many businesses increase their pricing on July 1st, the start of the financial year is a good time for investors to review their rent. Rather than a hefty rent increase every few years, we recommend an incremental one in July each year, which is more in line with your tenants' expectations.