As an agent, you are the trusted source for buyers and sellers. Where you can go above and beyond for your clients is when you provide them tips that they didn't expect and even more so when you provide tips for them to save money. Here are 9 tips you can pass on to your customers when explaining to them why they should buy an investment property.
1. Deduct repairs:
Rental repairs can most likely be deducted from the property when you are renting out the property. So if you are spending money on painting, refurbishing and renovating the property, be sure to keep your receipts and offset the expenses against the income.
2. Mortgage interest:
Most likely for investment properties, people are banking on the capital appreciation and the rental income doesn't cover the mortgage interest. When this happens you can write off the loss in the difference as a deduction.
3. Building depreciation:
As the building gets older, it wears down. You can claim building depreciation (specific to the building, not the land as well) and write that off as an expense as long as it was constructed after 1985.
4. Asset depreciation:
Depreciating assets valued at less than $1000 can simply be grouped into a single low-value pool and depreciated together, meaning that you can group multiple assets such as curtains, stove tops etc up to the value of $1,000 and do a single-value low pool valuation at a rate of 37.5% depreciation per year.
5. Every advertising expense is deductible:
When you are searching for tenants and need to pay to advertise (you won't need to on Homely) you can allocate all of those expenses as a write off. This is another advantage of an investment property as the time you don't have a tenant, whilst you don't have a tenant you are decreasing your taxable income.
6. The costs associated with managing it are deductible:
You can write off the fees associated with having a property manager against the property. So your fees won't be costing them too much more and they can have the peace of mind to know that they are saving in the long run by having you on board.
7. Contractors fees are all deductible:
Do you need to have the garden landscaped, the walls painted and the property cleaned before tenants move in? All of those expenses are deductible.
8. They can claim travel expenses:
When working on revamping the investment property, buying hardware to make it more appealing to tenants or meeting agents to discuss what other properties are being leased out for you can write off all the costs associated with this. This can be especially appealing if you need to head interstate for furniture for your property or attending a property seminar on how to allocate expenses.
About the Author:
Todd Schulberg handles all things marketing for Homely.com.au - Living and breathing property, Todd has a keen interest in the movements in the market and how agents can utilise new tools and technology in order to be more connected. Using all things social, Todd suggests different ways that agents can engage and think outside the square with their marketing approach.