Ensuring your property investment is secure: a reminder as the Financial Year nears its end

As we approach the end of yet another financial year, we wanted to highlight some essential matters concerning your valuable property investments. It's crucial to ensure that your assets are adequately protected and prepared for the upcoming tax year. 

Here are a few important reminders:

Landlord Insurance

 It's paramount to review your insurance policy regularly to ensure it provides adequate coverage for your property. As unexpected events can arise, having comprehensive insurance in place offers peace of mind and financial protection against potential risks such as damage, loss of rental income, or liability claims. 

Underinsurance occurs when the insurance coverage for a property or its contents is insufficient to cover the full cost of loss or damage. This shortfall can lead to financial strain for property owners in the event of a claim, as they may have to cover the difference out of pocket. Underinsurance can happen intentionally, where policyholders deliberately opt for lower coverage to reduce premiums, due to inaccurate estimation of replacement costs. To avoid underinsurance, you should select appropriate coverage, ensure adequate sums insured based on current replacement costs, and regularly review and update their policies to reflect changes in circumstances or property value. 

Furthermore, it's essential to ensure that your landlord insurance policy includes coverage for smoke alarm-related incidents. This coverage can help mitigate the financial impact of damages or liabilities resulting from smoke alarm malfunctions or failures. By verifying that your insurance policy includes adequate coverage for smoke alarms, you can rest assured knowing that you're protected in the event of an unforeseen incident. 

If you need assistance in reviewing or updating your policy, please don't hesitate to reach out to us.

Proactive Maintenance

If your property has maintenance items you’ve been putting off, the end of tax year can be a good time to get these completed, ensuring you can claim the deduction shortly after. Ensuring your property is well maintained is paramount to both retaining existing tenants but also in attracting new tenants when your property next becomes vacant. Many of our clients wait to undertake maintenance when the property becomes vacant, but this can often lead to extended periods of vacancy, so where possible we suggest being proactive with these items. 

Tax Depreciation Information

 As tax time approaches, having your tax depreciation information ready is essential for maximising your tax benefits as a property investor. Depreciation allows you to claim deductions for the wear and tear of your property and its assets over time. There have been changes in recent years to the extent at which property owners can use tax depreciation, so we suggest speaking with your accountant to understand if your property can claim tax depreciation deductions.  

Review your Mortgage rates

When was the last time you reviewed the interest rate on your loan? If you haven’t reviewed your interest rate for more than 12 months, it may be worth reviewing the rate you’re paying and asking your existing lender if they can do better. Lenders are notorious for having a “loyalty tax” whereby existing customers often pay more than new ones, so it may be worth shopping around. If you need assistance with this, LongView has several third-party brokers that we work with. 

Review your Financial Goals

Do you have a financial plan in place or have ever used the services of a licenced financial planner? Many of our clients haven’t, yet most would benefit from receiving financial advice which can ensure that you have approximate financial and tax planning strategies in place. The cost for financial advice has increased significantly in recent years, but small changes can make a substantial difference to your wealth over an extend period. Again, if you would like to speak with an accredited financial advisor LongView works alongside several reputable providers.