The importance of accurate record keeping cannot be over-estimated when dealing with investment property. Due to the complexity of taxation laws in relation to property investment it is advisable to update records with regularity.
Property investors should create a habit of analysing their investment at least quarterly. That would include reviewing records of income, expense and repairs or improvements.
The ATO have the power to ask questions in relation to your investment property and your income. It is wise to ensure that all documentation is accurate and available. After all, who really wants an audit?
First time property investors need to know the types of documentation that needs to be maintained and the very first thing that an investor should acquire is a depreciation schedule from a quantity surveyor. This is a document that justifies claims in relation to depreciation and improvements to the property.
Records that savvy property investors maintain include:
- Depreciation schedule.
- Loan documents and statements detailing interest payments.
- Records of solicitor and accountant fees and statements.
- Monthly rental statements from agent.
- Copies of receipts for expenses such as rates, cleaning, agent’s fees.
- Bank statements.
- Records in relation to any costs of improvements.
- Records in relation to any expenses.
Maintaining accurate records and filing them correctly can save you a lot of grief at a later point in time.
If you are considering purchasing an investment property or would like to have yours managed please contact us we would love to assist you!