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Hi Nikki,
I sold a property there late last year – I felt the market had peaked.
City investors (like me) were largely responsible for pushing the prices up and I think they will pull back. This is the case in many towns where investors have been the main driver (as opposed to places where retirees have also been pushing up prices). If I was going to invest in the country again, I would look for a place with a population that is growing and where there is a spread of industry/employment. I would also look for a place where retirees are heading. But this is just me.
Inverell is a good town, but like all towns it has its bad bits. The agents will tell you where to avoid – I think the southside of town may be the dodgy side.
Find out what is happening with the airport, too. It closed for some years but I’ve heard it’s open again. Not sure for how long.
Resist the temptation to invest in towns around Inverell. I was told that any Inverell population growth came from these towns. Drive through Tingha and you’ll see what I mean.
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scott@depreciator.com.au
http://www.depreciator.com.auThanks guys.
Rallygirl,
One of my Brisbane guys covers Ipswich for us. Easy.
Send me an e-mail if you like and tell me a bit about the property so I can make sure it’s going to be a worthwhile exercise for you.
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http://www.depreciator.com.auLeo,
You’d be okay putting the fence in now and depreciating it.
Fences are regarded by the ATO as a building item. They depreciate over 40 years at 2.5%pa. (Unless you’re thinking about bunging in an electric fence – they have a 20 year life).
So a $1,000 fence will get you $25 per year in depreciation. But looking on the bright side, you’ll be getting that $25 per year for a long time.
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scott@depreciator.com.au
http://www.depreciator.com.auOur reports are clear, ATO compliant, and delivered to you (and/or your accountant) as a pdf.
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scott@depreciator.com.au
http://www.depreciator.com.auI think you can do an RP Data search on a single address for around $15. I haven’t looked at their site for a while, so I may have that wrong.
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scott@depreciator.com.au
http://www.depreciator.com.auDo all residents in the building know there is a flat for lease?
Maybe someone will want to move to what sounds like a nicer flat?
Maybe someone will have a friend who wants to live in the same building as them?Tax Depreciation Schedules
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scott@depreciator.com.au
http://www.depreciator.com.auYes, it’s interesting the number of people in this business who aren’t investors. QSs in particular tend to be very cautious by nature.
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http://www.depreciator.com.au1. Is this considered non-residential rental property?Not sure what you mean. It’s residential because people can live there.
2. Is the depreciation period of this property 39 years? Does anyone have any examples of this kind of property? The home will be purchased for 350k, so about how much depreciation will I get per year?If you mean does the building depreciate at 2.5%, in all likelihood yes. I’m assuming it was built post September 87. There are way too many variables to have a stab at expected depreciation.
3. Is it true I can deduct all my mortgage interest, real estate taxes, insurance, condo fees, utilities(gas, electric, water, sewer)?It’s a straightforward investment property. So, yes. Unless I have misunderstood something?
Scott
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http://www.depreciator.com.auHi Lie-ji,
It’s up to you when you get your Schedule done. You’ll need it to complete your 05/06 tax return, so you can wait a while.
Our biggest challenge is tenants. Most are great, but some are uncooperative. Our worst ever stood one of our QSs up 6 times I think. On one visit he was home and yelled through the door that he was going to break the QS’s legs.
If the QS can inspect before you have tenants, or between tenants, that is preferred.
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http://www.depreciator.com.auunits4me highlighted the issue of the underground tanks. They don’t last forever. Oil companies are keen to not own them because of the potential problems. When they need to be replaced (whether through age or failure), it will be an expensive exercise. I would research this issue pretty thoroughly.
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http://www.depreciator.com.auThanks Redwing, Michael and Simon.
Hi Billyray,
The price would have been $715, not $750. And for members of this forum, there is a discount – down to $660 GST inc.
We’re dearer than some, and cheaper than others. I’ve seen some cheaper reports that are not ATO compliant.
We use Quantity Surveyors to carry out inspections and costs building/assets. One big company in this industry doesn’t.
A layperson is able to put values on assets: stove, carpet etc. A layperson is not able to value building work. QSs are at the top of the ATO recognised pile for this job, but some builders also have the requisite qualifications.
If your house is pre 85 I can probably help you over the phone for no charge.
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http://www.depreciator.com.auThere is something to be said for keeping daughters close to home as daughters are more inclined to look after their parents.
I have 2 daughters. Whenever I changed their nappies, I asked them whether they would change mine when I’m older. They’re now so indoctrinated that the 2 year old tells people she’s going to change my nappies when I get old.Tax Depreciation Schedules
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scott@depreciator.com.au
http://www.depreciator.com.auI mentioned in a post a little while ago that I had been inside a large block of units in Sydney that had been finished for at least a year. There were quite a few unsold apartments in it. I think the developer was Multiplex. I’d say they can afford to hold stock rather than let it go cheaply.
Smaller developers don’t have the luxury of being able to hold stock indefinitely. I suspect later this year there will be some real bargains in some small developments. There is one I saw recently where I don’t think the developers pre-sold anything. I sense that there may be a consortium of people who took out second mortgages on their homes to bankroll the project. It was a tricky site (ex servo) and the project took a fair while – around 2 years. In that 2 years, prices have come off around 15%. Oh dear.
Small developments are also attractive because invariably the strata fees are less than those in large complexes.
It can also be easier in a small building to make changes to an apartment i.e. value-add. That’s because the body corp is often easier to deal with.
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http://www.depreciator.com.auYep, I had an IP that I decided to rent out to dogs and their owners. It wasn’t a flash place. There was never any damage that exceeded the bond and I made sure the PM did 4 monthly inspections. It always rented very quickly.
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http://www.depreciator.com.auA renovation and a new baby happening simultaneously could end in tears.
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scott@depreciator.com.au
http://www.depreciator.com.auDubbo is a regional hub. If I was looking to invest in a central west NSW town (which I’m not), it would be Dubbo.
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scott@depreciator.com.au
http://www.depreciator.com.auAnd please stop your husband from going out with his flashlight. It will take very little for things to get out of control – I’ve seen it happen.
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http://www.depreciator.com.auYack,
Michael hit the nail on the head with the patching problem.
Even from the outset you can get colour variation because the render will be mixed on site by a labourer i.e. it’s not terribly precise.
At least this is what I have seen happen.
Coloured floor toppings are easier to get consistent because they can in some areas (mostly metro) be delivered as a wet mix by the cubic metre.
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http://www.depreciator.com.auBen,
Megan set out the numbers well.
If you had sold when prices peaked, it may be a valid strategy to look at buying later this year.
Right now you’d be selling in a market where prices have come off and you’re punting on them coming off alot more to justify the changeover costs of selling one property and buying another.
Of course, you may be living in a market like Perth where prices are still bouyant – you didn’t put in that part of the puzzle.
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scott@depreciator.com.au
http://www.depreciator.com.auGood question. I think if I was going to take the lazy way out again and was prepared to pay someone to find a property for me (which is what we really do when we use these sort of guys) I wouldn’t hesitate to use them. They were pretty painless to deal with. Of course, other people may have had a bad experience.
The sales pack they put together on the property I bought was pretty good. It ran to about 70 pages and included lots of information about the area including future council plans and demographic predictions. There was information on the developer and builder, too.
All these marketers say they get property wholesale for their clients, but I don’t know whether many people fall for that line.
Some developers give their whole stock to these sort of groups as opposed to using local agents.
As I said, I got lucky and rode the boom in Port Macquarie by accident. I know CB are selling properties in Cairns right now. I don’t know much about the market up there and the days of getting lucky with a property punt are gone for the time being.
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