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Adding to Steve’s second point, I just sold a cf+ property in country NSW. I sold it through a buyer’s agent – there are a few on this site (including MiniMogul who is great). It wasn’t advertised. I’d say I’ll shortly be selling a cf+ block of flats in Tasmania the same way, too.
Good luck
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http://www.depreciator.com.auI bought a property through them and they seemed pretty good.
The property turned out to be a fantastic buy (unit in Port Macquarie), but I’d say that owes more to the market than the marketer.
Like most of these guys, I imagine they work with a handful of developers and market the stock to a data base they’ve built-up over the years.
The document they put together is very complete (or the one I got on Port Macquaries was anyway). It included information about the area and what was happening, information on the developer and the builder’s track record, and financial projections. The thing must have been 80+ pages.
My one had no guarantee of rental returns, but it was a few years ago. Maybe they’re doing that now that the market is tougher? Depreciation was definitely a factor in the marketing.
You’d find in any decent sized development, companies like this would have a chunk of stock to sell. I’d say they rarely have the whole lot.
It may be worth getting the document off them and talking to some local agents about prices to cross check.
As I said, I found Cameron Bird fine to deal with. They’ve been around for a fair while, too. That’s often a good sign.
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http://www.depreciator.com.auUnfortunately no, Calvin. And I’ve looked for people. If you know of a QS or Estimator there who wants some extra income, we can use them.
Essentially, we use QSs or Estimators to carry out inspections and send to us the costs we require to put together Schedules: cost of construction at time of construction (depending on date), cost of renos (again depending on date), written down values of Depreciable Assets etc. We use QSs and Estimators for what they’re best at. We are the ‘keepers’ of the tax knowledge. We find many QSs and most Estimators aren’t up to speed on the latest depreciation rules (and don’t particularly want to be as tax work is generally a small part of their income).
We are also able to put together Schedules if clients are able (and prepared) to gather sufficient information. There are clients of a few accountants in Karratha who we’ve helped out in this way.
Regards,
Scott
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http://www.depreciator.com.auThanks Derek, I’ll do that. We have around 70 guys around the country and service more areas than anyone else at a standard rate, so I’d say we’re possibly the biggest QS group solely specialising in tax work.
Scott
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http://www.depreciator.com.auNatalie, my business provides Tax Depreciation Schedules and even I don’t factor depreciation into my calculations when evaluating a property. I like investments to stack up without depreciation coming into it.
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http://www.depreciator.com.auI’ve used CGU and Terri Scheer. Front end is okay with both, though TS is more expensive. Hard to say who’s best as I’ve never had to make a claim. Most landlord insurance providers won’t touch a property that isn’t managed by a PM.
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http://www.depreciator.com.auMgr,
I’d be wary of any Australian apartments being flogged overseas. Often, marketers look to overseas buyers when locals perceive the product to be vastly overpriced. There was a string a while ago started by a guy who bought a Melbourne property off the plan at a seminar in London. It turned out to be a mistake. For this reason, I’d also be wary of Auckland apartments being marketed in Australia.
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http://www.depreciator.com.auThey’re definitely around, Nick. I just sold one. Some of them don’t hit the open market – I sold through a buyers agent.
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http://www.depreciator.com.auI’m not a guru, but I know the town. Armidale would have the experienced the same price growth as most towns over the last couple of years. Not sure whether the prices will be sustained – I’d say they would have come off this year.
According to a local I know, some years ago Armidale decided that it didn’t really want to encourage industry. It sees itself as a little ‘high brow’. So industry headed to Tamworth instead.
The Uni is critical to Armidale investors. Every now and then is talk about how it’s heading more toward correspondence i.e. fewer students. Not sure what the word is these days. Of course, if you’re buying something brand new, I’m not sure you’ll want students in it anyway. (And they may not be able to afford it, either.)
One fortunate thing about Armidale is that is has plenty of water. I heard the dam is large enough for a town of 50,000 people but population stalled in the mid 30s.
If you’re in Sydney, I’d be going there for a few days for a visit before investing – take the Gloucester route, it’s a great drive.
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http://www.depreciator.com.auIt is, PK. But the fact that I did it all myself means I hate the idea of selling it – makes acting with my head difficult when I consider my options with that house.
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http://www.depreciator.com.auYep. But generally over a long period.
Essentially, what is relevant from the ATO’s perspective is whether the floor coverings are removeable without damage. If they are, they are regarded as an item of Plant – a Depreciable Asset. As such they have an Effective Life less than the building.
Tiles in the bathroom are regarded as part of the building. They are not removeable without damage and they’re really not going to wear out. They are depreciable at 2.5%.
Lino/vinyl has an Effective Life of 10 years, unless it is glued down, in which case it’s part of the building.
Carpet has an Effective Life of 10 years.
Floating timber floors as of July 1 this year have an Effective Life of 15 years, which is ironic given that many of the ones I have seen are not going to last that long.
Scott
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http://www.depreciator.com.auNot sure about ‘scheme water’, but ‘brick veneer’ means you have one skin of brick for the outside walls and the inside walls are studs, either timber or steel, lined with plasterboard.
It’s a cheaper method of construction than ‘cavity brick’ (2 skins of brick with a cavity between). Most houses built these days would be brick veneer.Tax Depreciation Schedules
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http://www.depreciator.com.auHi Ian,
I doubt whether you’ll find such a site. To be honest, this forum would be your best resource. As you said this issue has been discussed a few times.
Admittedly, it is a bit of a grey area. Essentially, a ‘repair’ is something that restores an item to its original state i.e. fixing 3 bung elements on a stove or patching a hole in a fence. If you elect to replace the whole structure, it becomes an improvement as opposed to a repair. You can patch that fence until the whole thing is a collection of patches and each patch will still be a repair – ref: TR97/23.
Timing is also an issue. Let’s say you have a door that is peeling and needs painting. If you do it after settlement and prior to renting the place out, it’s regarded as a ‘cost of acquisition’ and not claimable at all. If you do it after you have been earning income from the property, it would be a repair.
Not sure whether this has cleared anything up for you or confused you further. Feel free to email me.
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http://www.depreciator.com.auHi Jay,
Initial repairs are tricky. If a house needed painting, for example, when you bought it and you elected to do this prior to renting it out, you are essentially making ‘an improvement’. Strictly speaking, the cost would be added to the cost base of the property thus decreasing your capital gain when you sell. This may be what your friends are getting at.
If you can get tenants into the property and then do some work after, say 6 months, you may be able to claim some of that work as repairs and therefore write it off. Be careful about claiming too much as repairs too soon.
You sound like you’re in a bit of a hurry, though.
Regarding renovating to resell quickly, a mate of mine did this (post settlement) and was crowing about the profit he made. I hated doing it, but I quizzed him on the cost of acquiring the property (esp stamp duty), the holding cost (interest on his loan), the opportunity cost of the work he did himself i.e. he took time off from paid employment, the cost of selling, and the CGT payable. And they’re just the most obvious costs. he went all quiet after that.Tax Depreciation Schedules
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http://www.depreciator.com.auSo 15K+ is the cheapest car you can find?
Tsk tsk, uni students these days…
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http://www.depreciator.com.auThanks for the feedback.
He is currently employed and the new business kicks off in January. The PM spoke to his employer. And he has a copy of the tenant’s latest bank statement showing a balance in excess of $20K. And he owns property himself – he’s renting out his unit because he needed space.
The lease won’t mention employees, just a home office. And the lease isn’t in the name of a business. If he attracts the attention (and ire) of the council because he has employees, it’s on his head.
Public liability concerned me, but that seems to be okay.
I’m sure all will be okay. Though if 80% of small businesses fail, I’d say 99% of small marketing/advertsing/promotion businesses fail. At least his wife is gainfully employed. And at least that house rents out really easily and quickly if he bails.
Scott
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http://www.depreciator.com.auI’ve just been sent an unsolicited advertising proposal for a company that lists development sites – small, large, many with approved DAs. Not sure whether this is the sort of ‘land’ you mean.
I don’t know anything about them – http://www.foursite.net.au
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http://www.depreciator.com.auBruham,
Plenty on parking in Annandale. It’s just near the shops and cafes that it gets crowded.I’ve asked the property manager to mention on the lease that a ‘home based business’ will be run from the house.
Spoke to my Landlord Insurance provider and they said I’ll be fine. They suggested I make sure his business has insurance for visitors and that I get a certificate of currency.
Running in a few additional phone lines and putting in some extra powerpoints won’t be a problem.
There will be extra wear and tear on timber stairs etc because of the additional traffic. It was a renovation I did without ever expecting to rent the place out (see below) – serves me right.
http://oak.arch.utas.edu.au/projects/aus/406/brun.html
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http://www.depreciator.com.auThanks for the feedback.
Parking won’t be a problem and I’d say the neighbours might like the idea of somebody being around during the day. We’ll see.
I’ll check the insurance policy and make sure he has insurance, too – I’ll get a certificate of currency. If I have to upgrade my insurance, I’ll get him to pay for the upgrade.
I don’t think he’ll need to make any changes, but if he does, I might get a quote for ‘making good’ the changes and have that money added to the bond.
Hopefully all will be well.
At least if it all does go pear shaped I’ll have no trouble re letting the house – it’s only been vacant 5 weeks in 7 years (2 of those weeks just now while I’ve been making repairs).
Scott
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http://www.depreciator.com.auI’m with Greg – don’t do it.
I tried it once. Never again.
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