As the financial year draws to a close, landlords have the opportunity to review their property investments and make strategic adjustments to optimise returns. By proactively assessing finances, scrutinising deductible expenses, adjusting rent, and reviewing insurance coverage, landlords can maximise their investment potential.
Before entering the new financial year, landlords should perform a thorough review of their property’s financial performance. Analysing key financial metrics—such as rental income, expenses, maintenance costs, and outstanding debts—helps identify areas for improvement and set realistic goals for the year ahead.
Review income and expenditure statements to ensure all rental income and expenses are accurately recorded.
Create a budget and financial plan to provide clarity for the upcoming year.
Identify potential tax deductions and optimise financial strategies with the help of an accountant.
Set clear financial goals for the year ahead.
Owning a rental property allows landlords to claim certain expenses at tax time. Deductible expenses related to generating rental income (excluding private-use costs) can significantly reduce taxable income and enhance overall return on investment.
Since 1 April 2011, landlords cannot claim depreciation on buildings with an estimated life of 50+ years (essentially all residential properties).
Depreciation can still be claimed on chattels (items separate from the building).
Each chattel has a specific economic life and can be depreciated accordingly, using rates provided by the IRD.
Ensure rental property expense records, including receipts, are well-organised for tax purposes.
Market conditions influence rental demand and property values, making it essential for landlords to periodically review and adjust rental rates. A comparative market analysis provides insights into rental trends and ensures rents remain competitive.
Annual rent reviews help maintain market-aligned pricing and improve cash flow for maintenance costs.
Adjusting rent appropriately maximises rental income while attracting and retaining quality tenants, improving long-term profitability.
Evaluate local rental market trends and compare rates with similar properties.
Work with a Ray White Rotorua property manager to determine a fair and competitive rent.
Ensure rent increases comply with the Residential Tenancies Act, including proper notice periods.
Insurance is crucial for protecting landlords against tenant-related risks and property damage. An annual insurance review ensures policies cover essential risks such as damage, liability, and rental income loss. Adjustments may be necessary if property values, renovations, or other factors have changed.
Review your property insurance policy to ensure it aligns with current needs.
Check coverage for risks such as natural disasters, vandalism, and liability issues.
Consult an insurance adviser to assess coverage and explore potential discounts or improvements.
Maximising property investment requires strategic planning, informed decision-making, and working with experienced professionals—such as Ray White Rotorua property managers—who can help landlords navigate New Zealand’s property market with confidence.
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