What is an Investment Property – Leigh Barker Tangible Assets
Investment property is real estate purchased for the purpose of obtaining a return on investment through a combination of future capital growth and rental income. As purchasing an investment property to rent out is generally considered a long-term investment then understanding the associated costs of acquisition and ongoing ownership costs is advisable.
When purchasing an investment property, on top of the purchase price there are other costs such as stamp duty, conveyancing fees, legal costs, property searches plus pest and building reports.
When owning an investment property there are ongoing costs such as council rates, water rates, landlord insurance, property management fees, repairs and maintenance and possibly strata fees. Where funds have been borrowed there will be mortgage repayments.
Some investors elect to personally manage the property whereas others elect to engage a management agent. While personally managing the property will save on management fees the task of showing the property to new tenants, collecting rents, organising repairs and complying with landlord regulations remain the responsibility of the property owner.
As an owner of an investment property it is essential to maintain accurate records from the commencement of ownership to ascertain what can be claimed as a tax deduction. When owning an investment property, it is essential to keep track of all related income and expenses. Where there are significant changes or improvements these costs may need to be separated from normal repairs and maintenance items.
Disclaimer: Prepared by Leigh Barker Tangible Assets, Accountant, Portfolio Finance, Gordon, West Pennant Hills and MWC Group. Note that all content of this blog is general in nature and is not financial or investment advice thus anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstance.