I need to rent out my unit..

This is my thoughts on it, and id appreciate anyone to correct me if i’m wrong.
replace the carpet, try and get some on the cheap (second hand places). basically fix up any problems, not to the extent that its in brilliant condition, but most definetly livable and rentable.
then get a depreciation schedule done. you will then be able to claim wear and tear on the fittings (schedule will cost around 400 dollars).
you will definetly have to talk to an accountant as you will be running a business here in australia, so you will have to pay tax.
not really sure how you would get around it, those that do it, will be able to help you out much better.

As an agent its simple crap dirty apartments attract crap tennants well presented gets a better dollar and a better tennant[]

I disagree with $400 being a ludicrous amount to spend on a depreciation schedule. It will give you amounts that can be depreciated far in excess of just the carpet.

Barbara, you need a Quantity Surveyor to prepare the report for you on what you can claim – it should certainly help come tax time, and may not be as absolutely critical to have full rental (might provide some leeway). Leave the curtains up, you can depreciate them too – and as Peter says, you’ll be spending more money for no real gain.

Cheers
Mel

Barbara,

You’re ahead in having paid your mortgage in advance should you not get a tenant for a couple of weeks.

I believe with any property, a depreciation schedule is to your advantage as everything from the curtains to the doorknobs can be depreciated.
Have recently had 5 done at $330 each. (would have been $550 single) Look in the Australian Property Investor and you will see depreciation specialists who travel and you can ring on their free number. That’s apart from the Q/Surveyors’s in your area.

An example – daughter has had a unit for about 6 years. She didn’t have a depreciation schedule in previous years and had used the same accountant who didn’t advise her to get one. She changed accountants, got the schedule done and gained tax-wise.

As for the curtains – they’re expensive and might not be looked after but they can be depreciated. Also you could put up eg. continuous lace or similiar which you would be able to depreciate instead, not nearly the cost, if you decide to store your good ones. I have found tenants sometimes want to put up their own curtains. We had the situation in the last week with one of our houses. They put up their own heavy drapes over the lace.

Seeing the carpet is really bad, I would suggest replacing it and over here in the east you can get a decent quality carpet for say $80pm laid – again tax deductible. A good tenant treats the place as their own and wont wreck the carpet. Sisal is supposed to be hardwearing, good for tenants. Save cost if you can, get family/friends to pull the old stuff up.

You need to get the unit in order before you get the depreciation person/quantity surveyor to do the schedule. They take lots of notes and photos in case there are any questions later.

A nicely presented unit should attract a good tenant.

Make sure you know what your agent will do for you when you are away, what percent commission will be charged, length of lease – 6 or 12 months, they should do 3-4 inspections per year,(the reports can be faxed to you overseas) so you know things are ok, they reviews rent if necessary, makes sure rent is in advance and not let get behind, your monthly rental statement should be posted to you each month, do internet banking so you know what is going on. Appoint someone who can maybe authorise a repair if that is necessary. You don’t want the agent willy-nilly eg. replacing a stove if a repair will fix it. You need to set a limit on what the agent can spend on repairs before having to contact you for the ok, or someone you have appointed here, and that goes into your management agreement.

Keep all your statements, receipts, everything to do with the property so you can substantiate it all at tax time as your income/expenses. Your depreciation schedule is tax deductible too.

Peter – those depreciation schedules are about 10 pages of really involved stuff, internal and external schedules.

Anna

Hi Barbara
Everyone has been really thorough with their advice just wanted to mention landlord protection insurance, incase you dont have it. Also you cant tax deduct things you have done prior to tenants being there in relation to the hot plate installation etc I would check with your accountant.
With depreciation schedules and units they also look at common property owned by all units like pools, lifts fire extinquishers etc in common to all units. Amzing sometimes what is on the complex.
Erika

Barbara,

Try Deppro in Perth, i have property in perth and have used them. think they have offices in each state, they are on the web also.

with the carpets, definetly do, as someone pointed out crappy apartment- you know the rest, put it this way would you live there?

with the carpets if it’s a long term rental you can get a cheap good quality industrial or semi-industrial carpet, very hard wearing, reasonably comfortable, go for multi-coloured or ‘busy’ pattern, that way dirt etc won’t stand out too much over it’s life.

Good luck

REDWING

“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”

Peter M
“I am not an accountant but the advice of spending $ 400 on a depreciation schedule sounds ludicrous to me”

if you dont get one done you are ripping yourself off. i had one done on my Ip in darwin, cost me 440 dollars, return for this year 17,000 dollars in depreciation alone.
i dont have an electronic copy of it, but i can show melbear it, to verify i’m not lying.
Rolf De roos… always always get a depreciation schedule.. he says this in his book and he says it at his seminar.. the guy has millions, believe what he says.

Hey Shaun, it’s Dolf!!

Castle Dreamer, you can leave your PPOR for up to 6 years, and claim it as in IP, and depreciate and all that stuff that you’d do for a normal IP.

The beauty is that if you move back in within 6 years, there is no CGT, even on the depreciation that you claimed!! Beautiful.

I just finished reading Dale GG’s Trust Magic, and he talks about the 6 year rule in this. He says it used to be only 3 years. Why did it change? Well, the politicians (who else?) realised that at the end of their careers, they could get a lucrative diplomatic post overseas. These were typically for 6 years.

Sooooo, if the rules stayed at 3 years, they would have to pay CGT on their house when they returned home, sold it and bought a better one with all their extra dollars!!!! So as a group, they changed it to 6 years.

Cheers
Mel