How much should you spend on an investment property?
It’s one of the biggest questions on the lips of many landlords across Australia, and Boutique Property Agents has the ultimate tips on how much landlords should be investing in their investment property. Tolga Ozer and Bradley Jacobs, a unique duo with over 20 years experience, combine their expertise to ensure investors gain the most value in both the short and long term.
Bradley Jacobs, property manager at Boutique Property Agents, says, “While investing may require a lot of focus and attention – knowing your current rental yield and future goals, identifying ways to reduce your tax and maximising your property’s value at the lowest cost, are the four key factors to owning an investment property.”
Ozer and Jacobs’ top tips are:
Know your rental yield goals
The most important thing about an investment property is that it’s not an end in itself – it’s a means to achieve professional and financial goals. It is important to know your yield goals – three percent? Four percent? More? Understand how much cash your investment property is producing each year as a percentage of the property’s overall value.
Identify ways to increase the rent
Approach your investment property proactively and identify ways to improve the living experience for your tenants. By fixing up the old kitchen and spending $10,000 or $20,000 on a fancier kitchen, you could be making an extra $30 to $50 each week in rent and eventually could sell the property for much more.
As a landlord you can claim a tax deduction for a wide range of the expenses related to your investment property. By claiming tax deductions for interest paid on your loan, council rates, land tax, repairs and maintenances, you’ll avoid high tax bills and other financial implications. Speak to an experienced property manager and your accountant who can advise you on the best ways to reduce tax.
Keep your property in a good state
Ensuring that you fix a problem as early as possible can result in far fewer problems in the long run. Frequently review if the property needs a fresh paint or if repairs need to be done. Don’t forget about garden maintenance. Adding an outdoor entertaining deck would be beneficial. The initial expense may be large, however, it will increase the property’s value in the future.
Ozer, principal of Boutique Property Agents, says, “Increasing the value of your property at the lowest cost is the ultimate goal of owning an investment property. Regularly re-evaluating your financial position is key to making the right decisions.”
Boutique Property Agents present the next generation in property sales and management.The experienced team have a proven track record when it comes to exceeding client expectations and a personal touch and local knowledge that gives them the competitive edge.
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