There are more costs involved in owning a rental property than just paying the mortgage. You have to factor in these costs when you do your budget to ensure that you’re getting the necessary return on your investment.
Even if your property is negatively geared right now so that you can leverage some tax savings, you’ll find that down the track as you hold onto the property, you will start to see a positive return.
So, let’s look at some of the common costs involved with owning a rental property in Swan Hill.
Council rates
Like any other property owner, you’re going to have to pay council rates every year. How much you’ll have to pay will depend on the particular council your property comes under and the Capital Improved Value (CIV) of the property.
The Swan Hill Rural City Council has different tax rates for various different property groups. To give you an example, a property in town with a CIV value of $250,000 will require an annual rate of around $1,300 to $1,400.00.
On top of that, you will also be required to pay a Fire Services Property Levy, a Garbage Service Charge and also a water rate for water supply and sewerage. On the other hand, renters will pay for their water usage.
Insurance and costs associated with taxes
As a rental property owner, it’s a good idea for you to get rental providers insurance. Generally, this will cover you for losses to your property in the case of fire and flood but it should also cover you for damages done by renters and loss of rent if the renters leave your property with rental arrears.
You’ll also have to consider your investment property when it comes to doing your taxes each year. If your property is negatively geared, you will likely get a reduction on your tax return but if your property is giving you a positive return on investment, you’re going to have to pay tax on this income. It’s important to engage an accountant who is conversant with property investing.
Rental management and maintenance costs
To save you the time and hassle of managing your own rental property, it’s wise to engage a competent property management team. This means that all the communication with renters is carried out by your property manager and he or she can ensure that your property is being well looked after.
With any property, there are likely to be maintenance issues that come up from time to time because things do break eventually. Whether that’s a leaking tap, a leak in the roof or excess mould in the bathroom, these issues will need to be remedied to ensure that the property is safe for your renters.
Additionally, you may incur some extra costs when your current renters move out and you need to find new ones. Your property management team will charge you a fee for finding new renters for your property. Plus, you may also want to do some minor improvements in between renters such as repainting the walls or employing professional cleaners.
Can we help with your Swan Hill investment property?
We’re experienced property managers who understand all the costs involved with owning a rental property in the area. We can also help to save you time and money by managing your property and communication with your renters. So, why not give us a call on 03 5032 2507. We’re here to help.
