As a landlord one of the biggest fears you have is an unrented property, and run the risk of not making mortgage payments.
Increasing savings is more than a simple wish for property investors, it is an ongoing goal. Fortunately, there are ways and means to do so…
Here is how to save money on your rental property:
- Keep your property tenanted and avoid expensive vacant periods.
- Keep it in prime condition. No need to overcapitalise with unnecessary or expensive renovations. Just keep it in good repair (fresh coat of paint, modernised flooring, blinds, ensuring the hot water system is in good working order…)
- Offer a competitive rental rate.
- Don’t rush your property onto the market. The longer a rental is on the market the harder it is to rent.
- Reducing tenant turnover is the key to saving money (only increase the rent when justified or reasonable. Respond to repair requests in reasonable deadlines.)
- Check your interest rate every 24 months
To ensure it is competitive. Some fixed-rate loans offer confirmation of your mortgage repayment, which may provide you peace of mind.
- Claim all tax deductions you are entitled to
Refer to rental property taxation guides to know more about eligible deductions and capital gains tax management.
- Shop around before engaging suppliers of maintenance, repair and building work …
… And look beyond a real estate agent’s preferred supplier list. Don’t just accept the tradespeople proposed by your agent. Always ask your agent to seek several quotes.
- Utility bills: install water-efficient taps and showerheads …
… you can literally cut water usage in half. Ensure there are no leaking taps (they can waste more than 12,000 litres in a year. A leaking toilet can waste up to 96,000 litres in a year).
- Council rates
If there has been a sudden hike in your rates or if you believe the rates you are paying are inflated, you can request an “Objection to Valuation” from the Valuer General.
- Utility bills
Enquire at your local Fair Trading or Consumer Affairs branch to determine your water rate obligations.
Water rate charges usually fall to the landlord, but there are exemptions (for instance, if the property is individually metered and the property meets required water efficiency standards). If water rates are to be passed on to the tenant, this needs to be outlined in the tenancy agreement.
- Insurance costs
- Paying annually to gain a premium reduction.
- Bundling your insurance premiums to obtain a multi-policy discount.
- Increasing your excess to reduce your overall charges (but this will cost you more if you make a claim).
- Upgrading security and fixing unsafe walkways.
- Protecting your no-claim bonus by not claiming the cost of small repairs (you can cut 25–65 per cent off your policy premiums).