Property investing generates a lot of paperwork and email correspondence. What should you keep, and what is safe to throw out? Keeping organised records is important for the smooth running of your investments and to make sure you are compliant with regulations.
There are software packages available that can help you do this. They range from comprehensive packages for property investors to general accountancy packages which provide some of the record-keeping described here. You can also keep effective records without spending money on these programmes if you are organised and want to go it solo.
Do it yourself
Set up permanent files – one for each property. These will run for the life of your investment – from purchase to post-sale.
This will include:
- Purchase contract
- Solicitor’s settlement letter on purchase
- Loan agreement, including any refinancing
- Depreciation schedule
- Renovation costs, details and totals
- Any communication between you (or your property manager) and your tenants
- Details of any changes to rent or tenancy conditions
- Tenancy application forms
- Contract of sale
- Selling agent agreement
- Solicitor’s settlement letter on sale
- Loan finalisation documents.
Each permanent file must be kept for 5 years from the date of lodgement of the tax return in which the property sale is declared.
Set up annual files and/or folders – one for each of your properties.This will run for the financial year and should contain:
- Your receipts and invoices
- Rental statements
- Tenancy agreements
- Property inspection records
- Loan statements
- Cash book (this is a clear record of your income and expenditure using paper, a spreadsheet or accounting software).
Keeping these records in an organised manner will help you keep track of your cash-flow and will make sure you have everything you need at hand. It is important to keep each annual file for a period of 5 years from the date of lodging the tax return.
The right time to buy
There are many fantastic investment opportunities available right now. 2015 is presenting us with the lowest interest rates in recent history, a nationwide under-supply of property and strong economic fundamentals.
For more information or to arrange for a free, no-obligation initial consultation please contact us today.
Sky Accountants Ballarat & Bookkeepers Ballarat Office
Phone: 1300 328 855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
Sky Accountants Sunbury & Bookkeepers Sunbury (Melbourne) Office
Phone: 03 97444522
Fax: 03 97447004
Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3340