Responsibilities you need to consider as a Landlord.
The financial year end has just passed, and it is time to re-evaluate your not only your financial responsibility requirements as a landlord for tax purposes, but also ensuring your investment property is working for you.
Landlord Insurance Cover:
One of the first things to consider is do you have insurance in place against rental income and damages? Your property manager is there to assist you in ensuring your investment property has good tenants, rent is paid on time, and that the property is looked after by conducting regular inspections.
However, there are circumstances which are out of anyone’s control, and that is why having insurance in place is imperative. Amongst others, Landlord Insurance Cover protects you against theft by the tenants, loss of rental income due to the tenant defaulting and malicious damage. We all hope that our tenants will look after our property as if it were their own, and most do, however it is not worth taking a chance on your investment in this way. Rather mitigate all risk.
Depreciation of your assets:
As an investor, you want to maximise the benefits of owning an investment property. It is worthwhile discussing your asset with a Tax Consultant. The ATO allows property owners to claim depreciation as a tax deduction and this could include structural elements, fixtures and fittings such as carpets, aircons, blinds and stoves. Plus, if you own a property in a complex, you can claim depreciation on common property such as driveways, lifts and swimming pools.
There are many other tax deductions you can claim, and your accountant will be able to advise you further, but the following will give you a good idea on what to claim:
• Repairs and maintenance on the property
• Landlord Insurance
• Legal expenses
• Accounting fees
• Property Management expenses
• Travel – if your property is in another region or state, you can claim travel expenses to go and inspect your property
Clean your gutters: If this is not done on a regular basis it could lead to blockages due to debris and leaves accumulating, which will end up in blocked drains. This could then also lead to roof damage caused by water leaks. This is an avoidable expense.
Service air conditioners: By cleaning the filters and servicing your aircon, it will run at maximum efficiency and keep you warm in winter. Some reverse cycle air conditioners can be up to 65% cheaper to run than conventional electric heaters. This may not be the case though with older air conditioners, so it may be time to upgrade, not only for your own investment purposes, but your tenants will appreciate the effect on their energy bills. Plus, you can deduct this at tax time.
Smoke alarms: This should be checked at least annually, and your property manager will ensure this is done, however should you be renting out a property independently, ensure smoke alarms are checked and working. In winter, the risk of fire is so much higher that it is just not worth taking the risk.
Hopefully these tips will assist you as a landlord.