Maintenance Costs

If you’re paying someone to tend the garden or to provide cleaning services, you can claim the incurred expenses as a tax deduction. Likewise, body corporate fees represent a deductible expense. Repairs and construction costs for your investment property are also tax deductions you can claim.

Electricity, Gas and Water Bills

If you’re paying the electricity, gas and/or water bills instead of your tenant then you can claim these on tax. Furthermore, you can claim the cost of having these services connected.

Additional Services Provided to Your Tenants

Providing additional services to your tenants such as telephone, internet or pay TV can all be counted as property investment tax deductions. Of course, if your tenant is paying for these services they can’t be claimed.

Fees, Rates, Commissions and Charges

There are several fees and charges associated with owning an investment property. Some of these include:

• Real estate agent fees and commissions
• Solicitor disbursements and accounting fees
• Advertising for new tenants

Bank charges, interest on loans and mortgage repayments are all costs associated with your investment property that reduce your taxable income.  Depreciation on your assets is also included.

Now, because these items all reduce your income you don’t necessarily want to run out and increase them in order to reduce your tax bill. Just be aware and keep these investment property tax deductions in mind so you can make your property investment more profitable.

Spend Other People’s Money

Financing your property investments makes sense for a number of reasons. Why tie up all your capital while you wait for a pay off when you can spend someone else’s money and have your savings left over for a crisis or for further investment. This is why it makes sense to spend other people’s money to increase your own wealth.

Leverage is defined as doing more with less. The power of leverage means you can maximise potential profit whilst minimising your own out of pocket expenses.

When it comes to debt, there’s the good and the bad. If your debt is reducing your income, i.e. repayments on a credit card or car loan, then it is bad debt. Good debt, on the other hand, is debt that actually enables you to improve your bottom line. How is this possible? It’s simple, you obtain debt to finance investment and the profit from your investment brings in more than the interest and repayment costs of the debt. Investing other people’s money allows you to generate an income without eating away at your savings.