Avoid these property mistakes to ensure your investment property pays dividends.
1. DIY Property Management
Not engaging a property manager may be the obvious way to save money, but it can cost you when things start to go wrong.
These are some of the big traps of DIY Property Management:
- Not asking for a bond
- Not having a lease and not completing a condition report
- Misunderstanding the Residential Tenancies Act
- Entering a property without giving the correct notice period
2. Treating investment property like a sideline interest
Treat your real estate investment like a business, not a hobby for extra pocket money. Consult an accountant, tradespeople, a financial adviser and a property manager. These costs are tax-deductible!
3. Doing cheap repairs and maintenance
Small maintenance issues that need repair can often become bigger, more expensive problems if they’re ignored. Save money by painting and doing small jobs yourself, but only proceed with big renovation projects with qualified trades people.
4. Not claiming ALL tax deductions
Landlords cost themselves thousands of dollars by not claiming ALL tax deductions available. A depreciation schedule, the inventory of items at a property that can be depreciated at a certain rate to claim a tax deduction, is a must.
5. Doing sloppy critical checks
Reference checking prospective tenants may take time, but will pay-off in the long-term. If you’re working with a property manager, ensure you’re confident with their selection process and ask questions about their process if you’re unsure.
6. Thinking like you’re the owner-occupier
Only buying a property you would live in, or transforming a property into one you would occupy, is a very common mistake. Don’t base your decisions on why wouldn’t live in a certain property. For example: a renter may love that the property is close to public transport despite not having off-street parking.
7. Not enough insurance
Get insurance or risk losing any dividends you’ve accumulated should something go wrong.
Remember: Property management fees are tax deductible.
Riverview Realty is a boutique agency focused on achieving the maximum price, with a client engagement that is above the industry standard. We call it the “Ultimate Experience” which forms part of our unique selling proposition.
Ph. 02 9420 0083, 59 Tambourine Bay Road, Riverview.
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