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Discover the secrets of successful property management and investing on "The Property Investors Handbook" podcast. Join Colleen Sutherland as she shares expert insights and strategies for acquiring, managing, and maximising returns on real estate investments. Whether you're a beginner or seasoned investor, this podcast is your essential guide to navigating the world of property investment. Tune in and unlock the keys to financial success in real estate.
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Hello and welcome to another episode of the Property Investors Handbook. Now I'm your host, Adam Bell, and today we're talking about a critical time for all property investors, the end of financial year, which has just passed us by. So now to help us navigate through this period and, give us all the tips and tricks and what you need to be aware of, we have again, Colleen Sutherland from Sutherland's Property Management Group here to tell us all about it.
Colleen, welcome to the podcast.
Thanks, Adam.
Excellent. Okay. So, end of financial year. Is there a checklist? What sort of things do we need to be aware of as a property investor that you need to have, you know, sorted? Come the end of financial year.
So don't start on the 30th of June That's probably my biggest tip know what when you have an investment property you need to have spoken to your accountant so and got a depreciation schedule So both of those things will guide you to the end of financial year So you work all year to get to the end of financial year so that you're not jamming things in You at the 11th hour or when it's too late.
Right. Okay. So you get your depreciation schedule. You need to do that each year, don't you? No, you just do it
at the start before you, rent the property out or When you renovate.
Right. Yeah. Okay. They're the two times you. Yes. Cause that's the
most, beneficial to capture the tax deductions and benefits that are available to you as a property investor.
Right. Okay. So having your, depreciation schedule ready, what other things do you need to be aware of at that, that come that tick over of 30, 30 June?
Well, During the year you may have already upgraded your property, put new paint in, new carpet, that sort of thing. And those are the invoices that are most important to your accountant for when he makes that tax deduction.
So when you get to the end of the financial year, you've got everything in a row. And, you're ready to just go.
Okay. Now what documents do you supply to, or records do you supply to landlords? Cause you, you would have a, a ledger, I would imagine, or is it, what's it called? Of all the ins and outs that have come through, you know, you as a property manager?
So each month you'll get a statement that will include all the invoices. So when you get the, statement You will separate them and put the statement over here in this folder and then put all the invoices over there in that folder. Then at the end of the financial year, we'll give you a consolidated statement that goes to your accountant and it makes it a hell of a lot easier for you.
For your accountant to do and then you've already got all the invoices. So if he says I need The invoice for the replacement of the air conditioner invoice number 31 and you'll go here it is here
Okay, so that makes it so much easier. You've got a summary consolidated. Yes statement with everything on it You get that out.
They get it to their accountant. Yes, and away you go.
Have you heard of that? saying that says begin with the end in mind. Oh yeah. That's what we do.
Perfect. Perfect. Another great reason to use a property manager like yourself. I can imagine trying to put all that together for your accountant. You know, if you're a private landlord, a painful job, I would imagine.
It is because then you're looking through a shoe box full of invoices. So if we've done all the work for you through the year, the end of financial year for us. is easier. Yeah. And then makes it easier for you.
Perfect. So are there any common expenses that can be claimed that can be covered? people might overlook?
Yes, there's a lot, all the repairs and maintenance can reduce your income and then the replacement of items like the dishwasher, air conditioner, garage remote, those replacement costs, they're all claimable. What's a different tax bracket is if you install a new air conditioner. During the tenancy during the year, that is a different tax bracket because that becomes a capital expense,
right?
So I think we talked about this in one of my episodes with with your husband Tony being the accountant and yeah looking at what's a capital expense versus What a deductible repairs and yeah repairs and maintenance and Actually another key one if you are listening now and haven't listened to the earlier episode around self managed super funds, a lot of things to take into account there come end of financial year, that aren't just your stock standard that we're talking about.
We're talking about now. So I
have the benefit of being married to a chartered accountant, so I am able to Provide a little bit more general information to our investor clients. I will refer them back to their accountant to clarify But when making that decision instantaneous like replacing the air conditioner or whatever I can sort of let them guide them which way to go.
Absolutely And of course, I gather you could point people in the right direction Whether it be your husband's firm or somebody more local or whatever You know, if, anyone needs a good accountant to help account for their investment properties.
Yes, absolutely. So you want to, at the start of your, property investment journey, have spoken to your accountant and your financial advisor.
Perfect. Perfect. How important is it to conduct a property maintenance review at this time of year and what, you know, what should be included in that review?
Well, again, these things is what we prepare for through the year.
Sure.
So, your property inspection is a general inspection.
Sure.
When the property is vacant, we'll recommend to you to replace the carpet or paint the internal or something will help you to create that budget that you might not be able to do it now. But you can work towards the next financial year and you'll reap the benefits of that.
Sure. Okay. It comes back to what you said in the very first sentence of this presentation.
Podcast that you plan for this throughout the year and you're ready. It's not about starting and thinking about everything you need to do come in June, 30, 30 June. So you've just mentioned about repairs and maintenance. I just want to ask you a bit of a question. My, I rent and, my property needs a paint desperately.
But, probably going a little bit off track here, but, and the property managers keep saying, well, it's probably something we'll look at doing, you know, at a change of tenancy, but I'm not planning on going anywhere. What would you sort of say in that sort of scenario?
So it is something that they would prepare for a change of tenancy.
How long have you been in the property for?
Eight years.
Oh, okay. So in a, investment point of view, you need to budget to do these sort of things regularly, like five years, seven years.
The house is 25 years old and it's never been repainted.
So when your lease renewal comes up and your rent increases, how much?
Yeah, it's been 80 or 100 the last couple.
Then what is happening is landlords, and they do have an advantage because of the market, but they're expecting 2024 prices on a 1990 house. So when you've done nothing, and done the bare minimum of the repairs and maintenance. At times you need to look at your rent increase versus, well, I've done this, and this.
And if you haven't done this in this and this, then you may not get as much. So what's happening now is because the market is so high, they will dictate to you what the terms will be. But you can always counter offer. To say, alright, well I'll pay that extra 100 a week, but I want you to do this. And what would happen then is because you've got all the furniture in the house, you would need, you would have to be responsible for moving that furniture to get the property painted.
But sometimes it's worth it. freshens it up beautifully. It would
make a big difference. So we have got off on a tangent there, but look, good, good advice nonetheless. So, so look, I guess, to finish up on today's episode and talking about the, the end of financial year, be prepared, do your stuff during the year.
If you are looking after your own property, Keep good records on your income and your expenses, but get a good property manager who does all that for you. And here's your statement. Here's everything. You just give it to your account and you're done.
Yes. So we can do that. That's fantastic. And it's easy.
But when you receive the information, you need to be responsible for. Saving it somewhere that if I need to talk to my accountant or my financial advisor, I have that information at hand. And that's including the lease, the entry condition report, all the property inspections. So, save them somewhere because they are valuable and some agents charge if they have to send it all out again.
Wow. Really? Yes. Oh, okay. Very good advice. Look, thanks again, Colleen, for sharing such a great Comprehensive end of financial year checklist for property owners to, to think about. So look, stay organized and be prepared. It could make a huge difference in maximizing your investments, profitability and ensuring things run smoothly.
So look. Be sure that you do subscribe to, the Property Investors Handbook Podcast. Give us a like, give us a share. We really appreciate it. And any comments too on, on various platforms that you can about any topics that you'd like us to discuss. But until next time, happy investing. And thanks again for coming in, Colleen.
Thanks Adam.