Looking for ways to quickly improve the cash flow of your rental property? Here are 5 suggestions you can consider:
Increase your rent;
If you haven’t reviewed your rents in some time and your property is renting below market value, depending on your lease agreement you may be in a position to increase your rent. In some cases this could be as quick and simple as giving the appropriate notice to your tenants in accordance with their lease or with relevant state laws. Consider building rental increases into longer fixed term leases to ensure they keep up with market rates;
Find other sources of income on the property
Does your investment have additional income opportunities you may not have considered? An example would be leasing advertising space on a busy road, unused car parking that can be leased separately, leasing unused land for car/caravan storage, converting extra space for a small office or work studio etc
Restructure your loan
Restructuring your loan, or negotiating a better interest rate on your loan can reduce the amount you are paying each month. For example you may restructure to an interest only loan which will reduce your payments, or simply negotiate a better interest rate which will also get your repayments down;
Review and minimise outgoings
Can you negotiate better rates for your insurances or property management fees by consolidating with a single service provider? Are you overpaying or unnecessarily paying for things like lawn maintenance, or repairs and maintenance that you could manage yourself? Ask your property manager if they have access to discounted products or services.
Check your depreciation schedule
If you don’t have a depreciation schedule it is likely you are missing out on thousands of dollars in tax deductions – cash that should otherwise be in your pocket.
If you think your accountant is taking care of depreciation but you aren’t sure, ask the question as many investors don’t know that accountants aren’t recognised to estimate construction costs and value assets.
If they are not working from a quality depreciation schedule prepared by a quantity surveyor your deductions won’t be maximised (or possibly even compliant).
If you have a cheap or DIY report, have it reviewed by an expert quantity surveyor as there is a good chance there is opportunity to improve your deductions even further.
You would be surprised how many investors miss out on these deductions because they believe their property is too old, or because they believe their accountant is looking after it already.
Don’t be complacent, there could be thousands of extra dollars in cash flow there waiting for you.
For more information about tax depreciation and whether you could be claiming more for your investment property call our team at Capital Claims Tax Depreciation for a free 15 minute consultation on 1300 922 220.