Why a property manager is essential in 2024
While owning a rental property is a life goal for many and can lead to expanded wealth in the long term, in the short term there are a lot of responsibilities that come with this investment.
It makes sense to have a property manager, not only so you can save yourself from the day to day headaches but so you can share the right information with the ATO at tax time.
This article examines the question, ‘Is a property manager worth it?’ and explains why having one is so important at this point in time.
ATO investment property crackdown
To begin with, in 2023, the Australian Taxation Office (ATO) launched a crackdown on incorrect tax lodgements by investment property owners and landlords. This applies whether your place is leased to short term or long term tenants.
The move requires many lending institutions, including the Big Four banks, to provide access to landlords’ financial transaction information. Armed with these details and new data-matching technology, the ATO has increased capability to identify discrepancies and ensure they are corrected.
This is happening because the estimated shortfall in revenue that the ATO is facing is $1.3 billion. It seems there are too many property investors who fail to share accurate information at the end of the financial year.
As reported in The Guardian, the ATO is set to review the data of an estimated 1.7 million landlords this financial year. It will also be looking back in time to review 2021-22 data.
Why you need a property manager
Everyone knows property managers are responsible for finding tenants, collecting rent and ensuring a property is taken care of. However, a quality property manager will also ensure your financial records are accurate and easy to share.
Throughout the year, your ‘PM’ will keep a list of expenses and income so you can give it to your accountant at tax time. They will know what is tax deductible (e.g. minor repairs can be claimed at once but major renovation expenses may need to be spread over a few years) and remind you of what definitely counts as money earned.
From fire alarm checks to advertising costs, there are plenty of rental property deductions that will reduce your taxable income. Your property manager is across them all, which is why it’s worth having one.
With a property manager in place, you don’t have to keep track of every financial transaction yourself. They will take care of paying things like strata fees, and send you an EOFY report to make life easy.
Further benefits of property managers
Once you have reassured yourself that you will avoid ATO scrutiny, there are even more reasons to hire a property manager:
Setting the right price: Property managers have their finger on the pulse when it comes to charging rent. They will be able to set a price that will reflect the quality and value of your investment.
Advertising: A property manager has all the resources of their agency at hand in order to advertise your property to new tenants and ensure you attract quality applicants.
Communicating with tenants: From vetting tenants at the beginning of the process to handling complaints, collecting rent and finally, through to exit inspections, your property manager will always be the bridge between you and your tenants, saving you from constant interruptions and phone calls.
Carrying out inspections: Property managers will carry out your regular routine inspections. They know exactly what to look for and will ensure that any issues with the property are reported to you. Even better, after letting you know what condition your property is in, they will take care of organising repairs.
Ensuring compliance: You need to be compliant with ATO regulations and the rules of leasing a home to a tenant or you could wind up in hot water. A property manager is worth it because they play an essential role in ensuring all rules and regulations are adhered to.
Looking for the best property manager in Neutral Bay? Get in touch today.
