Track your cash flow with a decent property portfolio spreadsheet! And in turn be tax time ready.
If you invest in property, you’ll want to keep a finger on the pulse! Read on to learn how to research you current property[s] whilst in the process maintaining a cash flow which will help an experienced accountant that specialises in real estate investments minimise your tax bill.
Tax deductions are effectively another income stream.
On the go? Here’s 30 seconds of key take outs:
- Be more organised and make the most of your tax benefits – miss nothing.
- Feel in control of your investments through running a simple spreadsheet.
- Track your investments through simple researching steps.
Use a property focused websites to track growth, whilst maintaining a simple spreadsheet which your accountant understands to claim all your tax breaks.
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I love passing on lessons I’ve learned along the way in decades of investing in property. I’ve made the mistakes, learned from them and continued to grow in wealth and knowledge.
Here is your opportunity to leverage from some of my early hiccups. Here are some tips and helpful information to help you prepare for your property investment tax return.
Tax preparation tip #1: shoe boxes cost money and time
When I first started investing in property I didn’t have a clue what property related expenses I could or couldn’t claim. My first appointment with a tax agent was rocking up with a bunch of shabby receipts in a shoe box.
Many accountants still charge in 15 minute increments of time. A shoe box of dog eared receipts takes some time to sort through. It’ll cost you time and money.
A shoe box approach will almost certainly mean you’ll miss a whole bunch of tax credits due to you because you’re disorganized. Messy shoe box, messy mind!
Take a trip to a stationery retailer and buy yourself an expandable file, or a folder with clear plastic inserts. Every time any piece of paper arrives in your mail box related to your property investment, once dealt with, it goes straight into your new filing system.
Over time, you’ll get a better sense of what expenses you can claim, and your filing will look more organised every year!
Tax preparation tip #2: think yourself organised
If you’re serious about your trade, being organised throughout the year will save you a lot of time at the end of the financial year. Having all your documentation ship shape will also ensure you don’t miss claiming tax benefits you’re entitled to. Here are some of the tasks you’ll need to dedicate some time to:
- Be a neat record keeper: file all property related documents and receipts together, in logical groupings. It’ll save you loads of time, every year.
- Track cash flows: start to track your cash flows using a spreadsheet. A simple spreadsheet will make you feel like you’re in control. At any one time you’ll know where you’re at with cash flow, and what expenses are coming up. A cash flow spreadsheet reduces stress.
- Audit your property management expenses: your cash flow spreadsheet will help you benchmark and compare the end of year statement you receive from your property manager, against your records. Your accountant will love that you have a spreadsheet. It will save your accountant time, and you, money.
- Find an efficient, property focused accountant: accountants tend to find their niches of specialties. Find an accountant that specialises in property investment. You need a team to transact a property deal a good accountant is an important team member.
- Claim your tax credits all through the year: if you have multiple properties or a heavy negative gearing shortfall, you have the option of asking your accountant to submit a tax withholding variation form. Your accountant will then adjust the amount of tax you pay, freeing up more cash flow for you.
- Track your investments through simple researching steps: Step 1. Jump on the Residex website to generate your free suburb report [You can get two reports per month per email address] It is a great report to give you all the main statistics for the suburb you have your investment property. Step 2. Jump on the SQM Research website – The Free Property Data tab to grab; Sold Property Records, Property Rental Yield, Asking Property Prices, Weekly Rents, Total Property Listings, Vacancy Rates, Demographics. Step 3. Update all this in a projected budget to everything is in the one spot!
- Take the test – The Property Investor Quiz: How shipshape is your record keeping? Answer some key questions and get your property investor score card. The Property investor quiz is FREE of charge – no strings attached and in less than 10 minutes. Click this link
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