The end of financial year isn’t the end of the world!

Find out how to set yourself and your property portfolio up for success, year on year.

  • July 7th, 2022
For individuals the start of the year is a great time to set and review personal resolutions and goals, but for businesses the end of financial year is that moment – and yes, you should be treating your property investing as a business. Let’s take a look at some of the key considerations you should be covering off at this time of year (every year), and the people who should be involved. YOUR ACCOUNTANT You shouldn’t have one accountant for personal purposes, another for any companies, trusts or self managed super funds (SMSFs), and yet another for your business or property investments. If you have one good accountant, you don’t need two or three! And as a property investor, your accountant shouldn’t just be “doing your taxes”. Tax planning should be ongoing and proactive. Mario Vinaccia, Director of Veale Accounting Group, emphasises that it’s important to keep your accountant in the loop throughout the year, rather than leaving it all until the last minute. And that’s not just because tax time is one of the busiest times of year for accountants! Mario elaborates: It’s important your accountant is well and truly ahead of any changes to your circumstances, rather than being forced to react after the fact. To this end, you should also have a depreciation schedule in place and strategically plan the cost of any repairs that need to be undertaken. Your accountant can also help with suitable asset protection, safeguarding properties in your own name, or using more sophisticated strategies such as family trusts and SMSFs. Finally, it’s important to be up to date with your taxes, particularly if you’re searching for your next property acquisition. When it comes to seeking finance approval, generally speaking banks will accept the last two payslips for employees who have been in their current role for around three months, and the previous year’s financials up until the end of February for those who are self employed. But – particularly throughout the COVID period – many businesses earned less income, so it makes sense that if your 2022 financials are going to be better than your 2021 financials, then that’s what you need to use for your loan application. Getting your tax completed as soon as possible is key! YOUR MORTGAGE BROKER If you’re serious about growing your property portfolio, your mortgage broker isn’t someone you should talk to every few years, you should be keeping them in the loop regarding your ongoing plans as well. Why? Chelsea Burton, General Manager and Senior Mortgage Broker with Crown Money, makes crystal clear the impact a disconnect between you, your accountant and your mortgage broker can have on your ability to continue building your portfolio!That’s why, as a serious investor you don’t want to be in the position where you get to the mortgage broker only to have them say “you can’t get a loan because you’ve made no money”, all because you have a really good accountant who‘s minimised your tax to almost nothing! LET’S HEAR HOW IT WORKS FROM A (VERY) EXPERIENCED PROPERTY INVESTOR! Luke Harris, CEO and founder of The Property Mentors is a seriously successful property investor, with more than twenty years’ experience and a property portfolio worth more than $30 million dollars (and growing). Read more about Luke’s journey here. THAT WAS THEN When just starting out, Luke had the basics covered. He would diligently update his various spreadsheets, gather his documentation together and assemble everything he thought he needed for his accountant to prepare his tax return. THIS IS NOW But as his portfolio grew, he realised that he needed to get serious, fast, and so he started treating his portfolio as a business in itself. That’s why now he (not to mention his accountant) keeps his financial and taxation information constantly up to date, so that’s he’s ahead of the curve when it comes to preparing for finance applications. Planning is key. As Luke points out:And that’s why, on top of being well and truly financially proactive and prepared, Luke is also a keen advocate for setting goals and reviewing them regularly. After all, if you don’t know what you’re trying to achieve, how can you expect your accountant and your mortgage broker to help get you there? TAKING IT TO THE NEXT LEVEL So – if you’re a serious investor (or your aim is to transform your property portfolio into a serious wealth creation vehicle) – you need to know where your money is and what it’s doing. Here’s a list of things you should be on top of: How much money do you have?What is your net worth?Review your superannuation. How much do you have? Where is your money is invested? How is it performing? Could it be working harder for you?How much is your property portfolio worth?Where is your money is going? Review your bank accounts and statements to see what you’re spending. How many automatic subscriptions do you pay out each and every month? Do you use them all?Set a budget, and stick to it.Review your achievements last financial year. Did you get the results you wanted?Set yourself up for success. Plan for the next twelve months. Last, but by no means least, be proactive and make sure your accountant and your mortgage broker know what your plans are. The end of financial year is a great point in time to review all of this – after all it happens every single year, at the same time! HOW CAN A PROPERTY MENTOR ASSIST? A dedicated property mentor will work alongside you, your accountant and your mortgage broker, not only helping you to plan but keeping everyone accountable to achieving your long term vision. And here at The Property Mentors that is what we do all day, every day. We work with you, mapping out your entire journey, and helping with any detours along the way. No matter where you are now, we can help you build a successful, long term property portfolio. Our aim is not only to get you to your next property, but the one after that…and the one after that… And that is why right now is the perfect time to make sure your investment portfolio is in tip top shape so you can start the new financial year fighting fit! To learn more, take a look at our EOFY webinar, where you’ll hear more from each of the property experts above, or book in for a free discovery call with one of our mentors and get started sooner rather than later.


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