Why you should spend more to earn more on your rental property

In business, as in life, people shop around for deals to save them money. It’s an instinct. In property investment, though, taking the cheap option isn’t the smartest idea. As the old saying goes, you need to spend money to make money! If you’re shaking your head, let’s look at some of the reasons why.

You’ll get more back on tax

Once the property is settled it’s a good idea to organize a quantity surveyor to walk through the home/office space. They will write up a depreciation report that shows how much you can claim over the lifetime of the property. Accountants are not able to do this for clients. They are not versed in the laws and calculations that quantity surveyors use in their job.

The release of the 2017 /2018 Federal Budget brought important changes to depreciation laws. Investors can claim capital works as before, but any plant and equipment that came with the property are excluded. Investors can only claim on fixtures they paid for and installed themselves.

If you bought an office block or a unit with outdated taps, dishwashers, or ovens, it’s a good reason to upgrade. Shop around for some impressive stainless steel appliances you see in the catalogues.

Watch the money roll in

The tenants will be impressed

As an investor, you’re not making money if the property is empty. That’s why you want to get it off the market as soon as possible. Tenants are picky and they’ll hunt around for as long as they need until a property ticks their boxes.

Look at your rental property and look at your competitors. Can you match what they’re doing, or even find a way to one-up them? Do some research as well to find out what house-hunters want. Some of the items on the ‘want/need list’ include:

  • Internet connection
  • Quality appliances
  • Room for pets
  • Cleanliness
  • Access to amenities like shops and public transport
  • Ease of parking

So buy that router, paint the front of the house, and shop around for those ovens! These items are used in your investment property for the sake of generating income. That means you can claim tax on them every year.


Increase the rent

Other reasons to spend money to make money? After buying those new appliances and touching up the place, it means you can increase the rent (within reason). Location and lifestyle factors also affect property prices, and you can allow for a 2-3% increase annually.

Increase the rent within reason

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