I have tried to find answers to two questions I have on the forum posts but I am still in need of more detailed clarification:Can you help me please?
Q1: IP-tenants leaving end of year. We want to put in new kitchen and bathroom and a car port. SHould we take this opportunity to do this when IP is empty? Will this affect our claiming of improvement for depreciation or anything tax wise???
Q2: What is the benefit if we go from a I/P loan to an interest only facility? Does it just free up more cash for further investment etc…In what case sould I consider this?
Q3: We have a household income of only $85K between two people. We are in the lower tax braket and our IP is negatively geared. Is this still o.k ?Snowflake
If you have the property managed by a real estate agent keep the property listed as available to rent.
You may be able to increase the new tenant’s start date so that the kitchen and bathroom are completed before the tenant moves in to reduce the disruption to the new tenant. The carport could be added to the lease agreement that you are going to install a carport even if the property is tenanted as the disruption would be less. You will need to arrange electricity to be connected for your trade persons and then have the electricity disconnected before the new tentants start renting your property.
By having the property listed it is still an available rental property. I am currently repairing a rental property’s bathroom shower and vinyl floor in the kitchen plus installing a rangehood while still listing the property that has already gained a new tenant who will move in once the bathroom is completed.This also reduces the down time of your rental property. If you have an agent managing the property you can ask them to find the trade people you need to achieve the repairs and improvements.Originally posted by as41:I have tried to find answers to two questions I have on the forum posts but I am still in need of more detailed clarification:Can you help me please?
Q1: IP-tenants leaving end of year. We want to put in new kitchen and bathroom and a car port. SHould we take this opportunity to do this when IP is empty?
IMO Yes, when it is empty is the best time to do it, have your tradies ready to go once the tenants depart, you have a end date for the tenants so you have a start date for your tradesmen.
Will this affect our claiming of improvement for depreciation or anything tax wise???
have you done a deprecation Scedule on the IP yet? If not i’d suggest contacting Scott from depreciator, I believe its best to get this done prior to your reno
Q2: What is the benefit if we go from a I/P loan to an interest only facility?
I/P Loan ?Does it just free up more cash for further investment etc…In what case sould I consider this?
Interest Only does free up more cash, but is not the only way to go..IMO build up a relationship with a good mortgage broker, they’re worth thier weight..
Q3: We have a household income of only $85K between two people. We are in the lower tax braket and our IP is negatively geared. Is this still o.k ?
Sounds like a great income to me and better off than a lot of others..If your – Gearing then hopefully you anticipate good Capital Growth?I believe one of the best things you can do is build your team of people; Not only tradespeople, but finance, legal, accounting, etc and this forum has a pretty good spread, find someone who you ‘click’ with and ask some more questions..
Snowflake
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorAlways do your reno between tenants and as long as it was on the rent roll as available through your agent then all of your “repairs and maintainance” are just that. Some atre treated as immediate write offs like carpet or floating floors replacing carpet, where as tiling the floor instead of the original carpet is capital and claimable only at 2.5%/yr for 40 years.
As you have derived the income from a tenant before you reno its treated differently than if you took vacant posession when you buy and reno before a tenant. That is then all classed as capital expenditure and only claimable against your capital gains at sale time.
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!
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