By Opulent Accountants|Thursday May 10, 2018
In our last blog entry we talked about the vital details you must take care of before buying an investment property. Taking the process a step forward, here we are going to discuss the questions you ought to ask your accountant before you get into buying any kind of investment property.
It is not just for fun when people advice that if your accountant or Tax Agent is fine with the idea of you investing in a property and if all fell well in place then you can go ahead with it and just relax. First of all you must understand that owning a property is similar to running a business. Thus, what becomes crucial is you have a well-planned budget and a realistic business plan.
It might amaze you the amount of people who are simply unaware of the real cost of buying. Such ignorance can build up financial pressure and stress. Consequently, one might make poor decisions and hence, the unwanted outcomes.
So, before you plunge into any sort of hassle, it is nice idea to talk to your accountant for their valuable and expert advice. Understanding how purchasing a property is going to affect your taxes and also knowing the cash flow outcomes is going to be important for you.
Thus, you must ask your accountant what you must do to maximise your tax outcome. Whether one person should buy the property or should it be an entity. In this situation, you can ask your accountant to devise a budget. They can work it out with you in various terms like
- What will be the scenario post-purchase
- Make sure that you have all the rooms for the cost that is going to come up
- Ensuring the allowance for debt
- Understand if you should borrow on interest basis
- What is the impact on cash flow
These are the things where you might not have a clarity due to lack of knowledge but your accountant can certainly help you as they have the expertise as well as the experience.
Talking about owning a property, there are number of ways you can have a tax implications. Whether you are buying the property on the company name, family name, an individual name, or as a part of superannuation, the decision will depend on your current financial status.
So, your accountant can help you address the major impactful areas of you decision and its results.
Having a budget
Your accountant can definitely help you come up with a good plan and devise a simple budget. Owning a property will involve many items to be replaced and repaired.
What about borrowing
You must ask how much amount you can borrow. Why is it important? To know if there are any tax advantages you can claim out of it.
Taking note of depreciation
Should you buy a new property with high tolerance for drop in value or get an old and renovate it? You must understand the different values it will bring.
Completing a decade of hard work and bring a decade of experience, we at Opulent Accountants take our work with passion and diligence. It gives us immense happiness to be one of the most Trusted Tax Agents in Melbourne, Mt Waverly, Glen Waverly, and Burwood. Having such a broad base of clientele also motivates us to perform beyond expectations. If you are stuck with making the right decisions for your investment property, you are welcome to ask us all of these above concerns we have discussed.Back