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 Owning one or more investment properties can certainly be quite lucrative, but it also usually entails quite a bit more work than previously anticipated. As many property investors surely know, earning “passive income” is at best a myth and in all likelihood you’re investing not just your money but also your time and energy into keeping your properties compliant, attractive to tenants, and keeping up with taxes.
While maintenance and repair costs are safe to assume as given for any property owner, taxes, depreciation, and structuring are likewise essential to consider, and good accounting can not only help you keep up with necessary tax obligations but also make a significant difference in the amount owed and your real yields from your properties. Here are a few reasons why you really should consider retaining an accountant for your investment property/properties: You Might Be Missing Out on Tax Deductions, and Paying Dearly for It Owners of rental properties can and should be taking the maximum advantage of any tax deductions available, and several of these are listed on the ATO website for your consideration. You needn’t be a chartered accountant to get a general sense of the deductions available, and indeed the ATO does provide several articles in fairly plain English about what you can claim (and importantly, how to claim them). Nevertheless, a good accountant can help you maximise your deductions and potentially save you a significant amount on your overall tax burden. Getting it Wrong Can Cost You More Time and Money Your income taxes may be relatively straightforward, but adding investment properties into the mix will always add some complexity. That means more time and effort as well as risks of making errors or omissions - hopefully accidental and not intentional. Audits from the ATO, missed deductions, or poorly planned tax structuring can all contribute to added headaches, higher tax burdens than you deserve to pay, and more time spent redoing things. Audits can always happen, even with an accountant, but the chances are lower and you’ll have much more peace of mind. Does it Make Sense to DIY Your Investment Property Accounting? The short answer is that yes, DIY accounting for your own investment property is a great skill to have and one you can put to use every time you must lodge taxes. You can learn how to calculate asset depreciation, deductions, and many other handy skills. Fundamentally, accounting is pretty simple and highly logical. That being said, it’s not something you should really dive into head first. For a single rental property, maybe try and familiarise yourself with the basics, but if you have multiple properties or you simply don’t want to risk getting anything wrong (which is quite likely to happen) then you really should leave this with an accountant. One important thing to also keep in mind is that you probably aren’t going to be browsing the ATO website every day, keeping up with changes to tax laws, government incentives, deductions, and so on. An accountant, on the other hand, should be up to date with all of this, which makes them well-equipped to get the job done properly and in compliance with the most recent ATO updates. Davlin Wealth Management Consult with us today at Davlin Wealth Management. Comments are closed.
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