4 investment tips for the new financial year

The start of a new financial year serves as a good reminder for ensuring an investment property portfolio and strategy is performing to its full potential.

Concept image of a house on a Jenga set. Balance
A successful property investment strategy can often be a fine balance. Photo: Shutterstock (Image source: Shutterstock.com)

The start of a new financial year serves as a good reminder for ensuring an investment property portfolio and strategy is performing to its full potential. 

Here are four key investment tips to starting fresh in the new financial year. 

  1. Set goals for the coming year

Without sounding like a cliché, evaluating your goals and where you want to be this time next year is an imperative step to setting yourself up for success. 

Evaluate what went well, and not so well, in your investment property portfolio this year. Recognise the positives and identify areas for improvement. Set time up with your accountant to discuss your financial position and what can be done to improve your investments’ cash flows this year. 

Completing these simple steps early will provide a solid foundation for the year ahead. 

  1. Make filing easier from the start

Having a simple way to keep records now will save you stress down the track. 

Find the best way to store and share your records with your accountant that will make tax lodgement time easier. The rental income you receive is just part of what you must keep a record of. 

You also need to factor in the expenses and what needs to be recorded to prove them. For example, keeping receipts, invoices and legal documents. 

  1. Establish a cash flow forecast

Some property expenses come as a surprise, while others can be accounted for months in advance. 

Forecasting your yearly cash flow’s peaks and troughs will help you be prepared throughout the financial year 

For instance, you can strategically set the property’s lease to cover times when hefty expenses will fall due, thus mitigating the risk of having an empty property during an expensive ownership period.  

Having a buffer account to cover unexpected expenses is also a must. 

  1. Obtain a depreciation estimate 

If you own an investment property and don’t claim depreciation, then it’s time to start. 

Depreciation is the natural wear and tear of property and assets over time. Everything depreciates, but only owners of income-producing property can claim it as a tax deduction each financial year. A tax depreciation schedule is essential to claiming depreciation to its ultimate potential. 

Many investors fail to take full advantage of depreciation. This avoidable mistake could cost them thousands, even tens of thousands, of dollars in the long run. 

Avoid being part of this group and start the new financial year right by obtaining an obligation-free depreciation estimate.

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