I just recently got finance approval for my first IP (and first property all together for that matter), a 3 bed fully renovated post war cottage in SEQ. Settlement is a couple of weeks away and I am obviously keen to get it tenanted ASAP. I was just wondering what sort of things I should do before tenants move in? As one example, I have read about “depreciation schedules” on here but don’t really know what they are or if I need one.
All comments most appreciated by this novice.
Hello Glasco
How exciting to have bought your first property.
Basically a depreciation schedule is a list of all the items in the property that loose value over time and will need to be replaced or redone at some stage (eg. hot water system, carpet etc.) together with their value and how much can be written off each year. Different items have a different life and therefore a different percentage that can be written off (deducted as an expense) against the income from the property. This is a good thing because it's a non out of pocket expence that lowers your tax bill. If the property has been renovated then you may get a very nice depreciation schedule so it's worth having it done professionally.
The other thing to do is to get landlords insurance. I assume you have house insurance and public liability already.
It may also be a good idea to go around and take many pictures of the property inside and also of the garden to show what fittings are everywhere and the condition of everything. A good PM should do this together with their property condition report but they will never take as many pictures as you will and it's good to have in case of any dispute about anything missing or damaged when a tenant leaves.
Good luck
Elka
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