The beginning is the most important part of the work. This is more so true in the property investment industry. The start of a new financial year serves as a good reminder for ensuring an investment property portfolio and strategy is performing to its full potential.
In light with this, here are three key investment tips to starting fresh in the new financial year.
Set goals for the new year
Evaluating your goals and where you want to be this time next year is a vital step to setting yourself up for success.
Evaluate what went well, and not so well, in your investment property portfolio this year. Recognize the positives and identify areas for improvement. Set time up with your accountant to discuss your financial position and what can be done to improve your investments’ cash flows this year.
Make filing easier from the start
Having a simple way to keep records now will save you stress down the track.
Find the best way to store and share your records with your accountant that will make tax lodgment time easier. The rental income you receive is just part of what you must keep a record of.
You also need to factor in the expenses and what needs to be recorded to prove them. For example, keeping receipts, invoices and legal documents.
At this point you should consider going digital as you would be able to store and track your data for a longer period of time. It’s also safer for you to go down this route since the risk of losing data is minimal.
Establish a cash flow forecast
Some property expenses come as a surprise, while others can be accounted for months in advance.
Forecasting your yearly cash flow’s peaks and troughs will help you be prepared throughout the financial year
For instance, you can strategically set the property’s lease to cover times when hefty expenses will fall due, thus mitigating the risk of having an empty property during an expensive ownership period.
Having a buffer account to cover unexpected expenses is also a must.