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The first rule of looking after an investment property is to treat it as you would your own home. Plan on regular maintenance, commit to regular inspections and have a roster of fully qualified and licensed tradies on speed dial to tackle repairs you can’t deal with yourself, such as electrical, plumbing and hot water issues.
Encourage your tenants to report problems promptly. This is essential when it comes to major issues such as a faulty smoke alarm or a blocked toilet, but you may also want to give them a list of less urgent things you’d like to be made aware of quickly, such as a dripping tap.
Smoke alarms: Test to ensure they are working properly.
Mould: Besides obvious areas like the bathroom, laundry and kitchen, look at ceilings, walls and inside wardrobes for signs of damp, which may require tradie assistance to investigate. If mould in the bathroom appears to be caused by inadequate ventilation, it could be helped by installing an exhaust fan.
Plaster cracks: Narrow cracks in plaster walls are fairly common and can be fixed D.I.Y. with plaster filler and a paint touch-up. However, if they expand, or new ones appear, it could be a problem with the foundations, so have the property checked by a licensed professional.
Pests: Keeping fly screens in good repair will keep out most insects, but squeaky or sagging floorboards, plaster cracks and paint damage can indicate the presence of termites, which munch away at things like structural timber and floorboards and can cause massive damage. Even if there are no visible signs of termites, arrange for a professional pest inspection at least once a year.
Door and windows: Windows and doors should open and shut freely, and any locks and security bolts should be working properly. Inspect hinges and tighten any loose screws. Replacing a door handle or window lock is generally a straightforward D.I.Y. task.
Electrical: Ensure that lights, electricity sockets and exhaust fans are all working. (Remember that any hard-wired electrical works must be dealt with by a qualified sparkie.)
Taps and showers: Check for drips and leaks (on outdoor taps, too), and ensure wastewater flows away quickly from the sink, shower or bath. A new washer could be the solution to dripping or leaking tapware. A build-up of soap scum in your pipes can cause slow-draining wastewater – using a plunger or drain snake might be enough to sort it out. Also test the water pressure: if the water flow seems slower than usual, it could be a sign of something more major. Arrange for a licensed plumber to investigate.
Waterproofing: Have a look at the sealant around sinks, showers and baths to make sure it’s in good repair and free from mould.
Flooring: Inspect carpets for worn areas, especially on stairs where there could be a slip or trip hazard. Deep-cleaning them once a year can help prolong their life. Look over hard flooring (including steps) for loose and/or scratched boards.
Appliances: Are there any obvious signs of damage – such as worn or frayed cords – to appliances? Check that they’re in good working order, and that dishwasher and washing machine hoses are free of kinks or leaks. Ensure that the dryer lint filter is being kept free of fluff. Air-conditioning units should be professionally serviced at least once a year. Check the use-by date of any fire extinguishers and blankets.
Outside: Look for termite damage, damp (which could indicate leaking gutters and/or downpipes), and wear and tear on joists and decking boards. Clean the gutters (and schedule regular cleans) and consider installing gutter guards to keep them free from leaves.
Gardens: Low maintenance is the way to go with rental property gardens, but you may still need to trim back vegetation that could be blocking ventilation outlets or overhanging the roof. If there is a pool, check that the cleaning system is working properly, the water is clear and that all gates and fencing are compliant.
The big issues: The period between tenancies is an excellent opportunity to tackle any larger problems that are resolved more easily when the place is empty, such as replacing flooring, redoing waterproofing, retiling, repainting, replacing a benchtop or resealing a deck.
Landlords can claim some repair and maintenance expenses as a tax deduction. As a rough guide, you can claim for wear and tear that arises from the property being tenanted, and to keep it in a tenantable condition.
Depending on what’s being done will determine when you can claim it. For example, repainting walls or fixing a broken window can be claimed in the year the work is done. Replacing a stove can be claimed over time as it’s considered a depreciating asset. But if you do renovations like adding a carport, you need to wait until you finish the renovations to claim a capital works deduction for the construction expenses over time (generally 40 years).
When you sell the property, what you have spent on capital works and the deductions you have claimed for it will be used to calculate your capital gains tax. The important thing is to keep receipts and records of what you spend on your property. Have a look at the Repairs, maintenance and capital expenditure factsheet for guidance; it’s part of the investors toolkit on the Australian Tax Office (ATO) website.
*This information is of a general nature only and should not be regarded as financial or legal advice. It does not take into account your individual circumstances or objectives. You should always seek advice from a suitably qualified professional.
Check out our guide to enhance your investment property.
Photo Credit: Cath Muscat, Getty Images
Asbestos, lead-based paints and copper chromium arsenic (CCA) treated timber are health hazards you need to look out for when renovating older homes. These substances can easily be disturbed when renovating and exposure to them can cause a range of life-threatening diseases and conditions including cancer. For information on the dangers of asbestos, lead-based paint and CCA treated timber and tips for dealing with these materials contact your local council's Environmental Health Officer or visit our Health & Safety page.
When following our advice in our D.I.Y. videos, make sure you use all equipment, including PPE, safely by following the manufacturer’s instructions. Check that the equipment is suitable for the task and that PPE fits properly. If you are unsure, hire an expert to do the job or talk to a Bunnings Team Member.
