Top 5 Tips for Maximising Your Investment Property In 2020
In Australia, real estate is a common and generally safe investment, but few people know how to get the most out of it. Whether you’re long-term renting or waiting to sell, we will provide you with 5 tips to get the most out of your investment property.
1. Be smart about renovations
Renovating your property can be an effective way to increase its value and rental price, but it serves well to be selective about what you do. Something inexpensive and easy like a new coat of paint could do wonders for the value, while you could spend hundreds and thousands on renovations that only marginally improve the price. It’s important to evaluate and compare the renovation price with its projected increase in market value before injecting any money. You want to make sure your property is modern and appeals to the current market, while not wasting money on unnecessary upgrades.
2. Managing rental price
Obviously, having a higher price means you get paid more, but having a low price makes it easier to find tenants and build loyalty. Ideally, you want to strike a balance between the two, and occasionally adjust the price based on the market. Keeping one tenant loyal for a lower price may be more profitable than constantly getting new ones, with the weeks in-between earning you no money. It all depends on the market, and having regular appraisals from a property manager can help to ensure that you are getting the maximum value from rent.
3. Know your taxes
You are also able to save money through tax deductions by taking into account asset depreciation and making claims for either capital works or plant and equipment. The former includes permanent structures and fixtures, while the latter is furniture, appliances, carpets etc. Getting a quantity surveyor will help you to determine what you can claim. This may cost you anywhere from $300-$700 dollars but could save you thousands in tax deductions. You can also claim on your tax return the expenses for renting out a property, which includes interest on the investment loan, property management fees, legal fees and maintenance, among other things. It pays to know what you can get back.
4. Be prepared for the long-term
This may be an obvious statement, but it is surprising how many people expect immediate results. Hold on to the property for as long as you can and continue paying off the mortage. Once you have built up your equity, you may want to consider investing in another property. It is important to carefully assess the risk if you decide on this and ensure you don’t stretch yourself too thin.
5. Find the right property manager
The final tip is the most important, as it will help you with all the other tips as well. A good property manager will be able to give you ongoing advice and ensure you are getting the most out of your property. Whether this is recommending high ROI renovations, finding the best rental price, helping you get the most back from your taxes or giving future investment advice, finding a good property manager can greatly increase your returns. They will also help you in finding the right tenants, navigating the law and much more, allowing you to relax in knowing that you’re in safe hands.
Those are just some of our tips to help you get the most value out of your investment property. Researching the market and the law can give you some valuable insight on maximising your profits, while consulting a property manager will give provide you with expert experience. If you are looking for a trusted property manager, don’t hesitate to contact Link Living for a free appraisal.