If you own an investment property you may be considering ways to make it more attractive to tenants, while also improving its value. One way of doing this is to add some upgrades that improve its energy efficiency and lower its running costs. Another is to make it warmer in winter and cooler in summer using passive design principles.
The benefits for property investors include happy tenants who will stay longer along with tax deductions for many of the upgrades that you make to your investment property. Of course you should always check with your accountant to confirm deductions.
Here are some sustainable upgrades that you can make to your investment property to reap the benefits.
Make your property waterwise
A waterwise property not only helps to save this precious resource but will also help you and your tenants to save money. Here are some tips:
- Reduce the lawn area and plant natives that rely on rain alone. Native plants also need fewer chemicals and pesticides, and attract more local wildlife.
- Install water-saving showerheads.
- Add a rainwater tank to save on water costs. You can claim around 40% depreciation for this on an annual basis for a total of 5 years.
Install solar panels
Australia is fortunate to have year-round free, clean energy from the sun, and more and more homes now have solar panels. These provide a cost saving for tenants, and an additional asset for property owners that will increase the value of your home and make it more appealing to prospective buyers, should you choose to sell.
They also provide the benefit of saving on your taxes. As they’re regarded as an asset in the plant and equipment category, you can claim depreciation at a rate of 10% per annum for as long as 20 years.
Make the home more energy efficient
There are plenty of upgrades that you can make to ensure your investment property is more energy efficient. And many of these will come with tax-saving benefits as well.
For example, if you choose to put insulation in the walls and ceiling of the home, you can claim this as a capital works deduction on your taxes. This also applies to the installation of double-glazed windows that help to maintain a more regular temperature inside the home throughout the year.
Even if the home already has an energy-efficient air conditioning unit, you might also like to consider adding ceiling fans to reduce reliance on the AC. These are relatively inexpensive to install and can reduce heating and cooling costs. On that note, having your air conditioning serviced annually can extend its life and save on the cost of buying a new one.
Best of all, you can claim these as a deductible expense on your taxes for the same financial year.
Consider installing an electric car charger in the garage
As EVs become more popular, the demand to charge them at home rises considerably, especially on the Northern Beaches. An EV charger adds value and is a bonus when it comes to selling. Electric car chargers are deemed to have an effective life of around 10 years and you can claim a maximum of 20% for depreciation on an annual basis for that length of time.
Make your garden more sustainable
If you plant some shade trees around the home, these can keep the house cooler in summer, reducing air-conditioning costs. External blinds are another addition that make homes more comfortable in the summer months.
Another sustainable garden upgrade is installing some raised beds for people who want to grow a few veggies. They look great and aren’t expensive to build or maintain.
While these additions won’t necessarily offer you much in the way of tax savings, they will help to make the environment around your investment property more attractive.
Do you own an investment property? Talk to us
If you have an investment property or you’re looking to purchase one, feel free to get in touch. We offer property management services and can help you find the right property, whether in the Forest areas of Allambie Heights, Beacon Hill, Belrose, Frenchs Forest, Forestville and Davidson or the beach suburbs of Freshwater, Curl Curl, Dee Why, Narrabeen and Mona Vale.