Managing Your Properties: Keeping it Simple
By Geoff Doidge of The Reno Kings
Many home owners and most property investors are now getting themselves ready for tax time and Geoff Doidge of the Reno Kings is no exception. With 49 tenants in his portfolio, Geoff is no stranger to managing his properties and making sure all of his paperwork is organized and ready for his accountant. Geoff tells us, “Whether you are a first timer or an experienced investor taking time to get yourself organized can save you on time and money”. Here are Geoff’s simple tips to prepare you for the end of the financial year:
 Filing:
Keeping your filing system simple and organized is an easy way to make sure that all of your documents are accessible. Use Lever Arch files for all of your important paperwork. For example, keep a file for your bank statements, making sure that you file your rental statements separately. Also keep a separate folder if your properties are in a Trust. |
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It is also a good idea to keep a pre and post folder for each property. Everything before settlement is filed in one folder and everything after settlement is filed in another.
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 Receipts:
Keeping your receipts in order for tax purposes can sometimes be a great feat. Purchase monthly dividers from the Post Office and label them July through to June. File all of your paid receipts under the relevant month, including cash expenses such as parking tickets, bus trips and toll etc, as soon as your get them and you will be ready for tax time. |
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 Payments:
Cash payments are usually difficult to track for tax purposes so use cheque books or on-line payments instead. If it is convenient for you, use a separate cheque book for each property you own.
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 Credit Cards:
Credit cards can be your friend but only if you use them wisely. They must be paid off at the end of the 'interest free period' or you should cut them up! Paying all of your bills and expenses credit card such as your rates, insurance etc is an excellent way to keep an accurate record of your payments.
This method also allows you to download your bank statements into spreadsheets or Quickbooks where you are able to allocate the relevant payments against the correct investment property. This is a necessary component for tax time as your accountant tackles one property at a time. This is also a great way to audit where you are in the June. ie: rental income that has and has not been paid. |
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 FlyBuys:
Geoff has his credit card linked to FlyBuys. He pays his rates, insurance, maintenance, phone bills in fact, everything related to his rental property by credit card. This means that the more you pay on your credit card, the more points you accumulate on your FlyBuys. Then he jumps on line and redeems his points for a Coles/Myer cash card. Now for the good bit … he uses this to buy ‘free food and wine’ from the supermarket.
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 Business Expenses:
If investing in property is part of your business then keeping track of your expenses can go a long way. Make sure you keep a record of items you purchased for the financial year as some of these may qualify as tax deductions if they are relevant to earning your income. Items to consider include newspapers and magazines used for conducting your research and workshops or seminars you attend in relation to property.
Please note: you will need to confirm your eligibility with your property-wise accountant. You can also check the ATO website http://www.ato.gov.au/ for further information.
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 Record Keeping and Rent Records:
If you do your own property management then devise your own rent record. Excel spreadsheets are fantastic if you are managing your own investment properties. This spreadsheet should have topics like ‘date rent due/paid’, ‘amount of rent due/paid’ and ‘rent period’. This is an easy way to control your rent and make sure that your rental income is up to date.
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If your tenants pay directly into a bank account then allocate a code to each of your tenants so you can identify which tenant paid and when. Make sure you have online access to check immediately if they are up to date.
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 Depreciation:
Many property owners are losing potential tax credits by failing to fully utilize and take advantage of the available tax depreciation benefits on their investment properties. Depreciation can help unlock the cash flow potential within each property and can result in thousands of additional dollars each financial year.
Engaging a Quantity Surveyor who specializes in tax depreciation schedules is the most effective way to ensure you maximise your tax deductions. The Reno Kings recommend BMT & Associates as specialists in this area. You can see their professionalism and the benefits to property investors in action at our Property to the Max workshop.
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 Bookkeeper:
If it all gets too hard, hire a bookkeeper to come around once a week/month to keep your files up to date. This way when tax time comes around you will know exactly where you are financially and whether or not you need to prepay interest and other expenses to save tax.
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Reno King Tip:
One idea or tax strategy might save you a fortune in tax or protect your assets from attack. Learn from our Property Wise accountants who speak at our workshops!
For current or future Developers: Click here for Developing for Profit workshops
For Investors: Click here for Property to the Max workshops
For Women Investors: Click here for Property Women Workshops
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Summary:
By taking advantage of Geoff Doidge’s experience you can make the most of your time with your accountant by preparing all of your relevant documents in advance. However, in order to complete your taxes quickly and thoroughly make sure you seek the help of a property savvy accountant who will know how to maximize your tax potential for investment properties.
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