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Just on the suburb by suburb thing.
In mid 02 I sold a house in Sydney. It was an unusual house in a small suburb of pretty standard houses. It sold for $1m.
Now, not alot of houses in that suburb get sold – just enough for statistical purposes I’d say. Most of them in 02 would have been priced around $5-600K.
I remember reading the SMH spring house price guide that year and noticed that houses in that suburb jumped in value by 22% in the previous six months or so. Far more than the surrounding suburbs.
I’m not sure, but I suspect that $1m sale may have skewed the stats. Still, I’m sure it brought a smile to the faces of lots of home owners in that suburb as they read their paper over breakfast that Saturday and discovered that their house was worth 22% more than it was at the beginning of the year. Of course, the next set of stats, without a big sale to positively skew the results, may have had them choking on their cornflakes – the average for that suburb would have fallen relative to neighbouring suburbs.
If there are insufficient sales in a suburb, they won’t put a percentage stat in. But I suspect they don’t take out the high and low anomalies. I bet property owners in St Clair won’t be looking forward to reading the SMH this weekend.
It’s also interesting looking at unit prices changes. I recall Annandale in Sydney used to have some pretty old unit stock. Then some years ago, developers started building groovy, expensive apartments. So the average price for units shot up. All those people with daggy old 70s units suddenly thought their unit has gone up massively in value.
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http://www.depreciator.com.auSigh. Maybe we’re misunderstanding eachother, Foundation. I’ve read other posts by you and you’re alot more cluey than me.
I have said a couple of times that the 42% fall in value of that St Clair property was an exception.
By that I mean not all properties have fallen in value by 42%.
I keep reading and rereading the things you cut and paste and can’t find anything in them that suggests a 42% drop in value is the ‘norm’.
Have prices dropped? Yep. Have people lost money? Yep. Are there people sitting on negative equity? Yep.
No argument there.
Has the fall in value across the entire Sydney market been 42%. Nope.
Sorry, I still think that 42% drop in value (60% if we factor in costs + interest) is an exception, not the norm.This weekend the SMH will do its Spring suburb by suburb price movement thing. That’s going to spark a whole new round of generalising. Just as there are price variations in a city, there are variations within a suburb.
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http://www.depreciator.com.auOh dear, not the St Clair property again. Talk about a beat-up.
It was overpriced to start with and then got thoroughly trashed by whoever was living there.
Buy let’s not let that get in the way of the story.
Even better, let’s ramp it up and factor in transaction costs. Then we can say that the loss on that property was over 50%!
But why stop there? Let’s also add interest payments. That will take the loss to over 60%!
Stop the presses! Let’s call Today Tonight and tell them we’ve got a story that’s right up their alley.
Or we could be sensible and acknowledge that the loss on that property is not representative of the market?
Are there lots of people in Sydney sitting on negative equity? Of course. But like all markets, there are great variances from area to area. I mentioned in that other thread that during the same period as that St Clair property dropped in value, my PPOR went up 17% from my purchase price to a recent bank valuation. (I know the true value is that realised upon sale, but the local RE agent came in at a higher estimate than the valuer). My Sydney IP during that same period dropped and recovered. A recent bank val on it was $720K, almost the same as it was in 03.
Having said that, I’m not looking to buy in Sydney any time soon.
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http://www.depreciator.com.auMy brother owned a wholesale/retail outlet in Port Douglas. He had a chip machine and they used to make good money supplying other retailers and restaurants with fresh cut chips (much better than frozen ones). I think he had a guy who just operated the chip machine.
Sometimes with a business it’s surprising where the money comes from.
I knew another guy who had a chicken shop. He sold salads etc too. Where did he make most of his money? Those rice pudding/custard things. We’ve all seen them – sprinkle of cinnamon on top. Sold them in a small round container. Cost next to nothing to make. He had someone out the back stirring huge pots of rice.
The biggest turn-off for me with fish and chip shops is when the uncooked fish in the window looks a bit tired.
I’ve noticed some of them these days are boasting about how good their oil is and how often they change it, too.
There is a really good fish shop in Port Macquarie. I go there a few times every year. Last time I noticed they had gone back to wrapping fish in paper, rather than using those boxes. I prefer them wrapped. They also had beer battered chips as an option. They weren’t great, but at least it was something different.
My cousin owns a pizza shop in Armidale. He has a special 2 for 1 deal for pizzas between 4 and 5pm. He has people queued out the door and he’s found it hasn’t cannibalised his after 6pm market.
I would also be doing a customer survey with customers at your current fresh fish store and asking them what they like in a fish and chip shop. I’m sure you’re asking every local you come across, too. And no doubt you’ll do a letterbox drop with opening specials when the time comes.
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http://www.depreciator.com.auHmmm. Sure, factor in interest, renos, stamp duty etc and lots of properties in lots of markets are sold at a loss – especially if the sale is forced. But I can’t find anything there that tells me the 42% drop in sale price on that property is not an isolated case? Would there have been others? Of course. But that 42% is not the average. It’s one end of the spectrum.
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http://www.depreciator.com.auAh yes, at times it’s hard getting much help out of Deppro after you’ve got your Schedule.
Let’s assume the Assets were acquired before May 10 this year, when the DV rate changed.
And let’s assume we’re talking about Assets worth over $1,000 – otherwise you’ll no doubt have them in the Low Value Pool.
So it’s a piece or carpet worth $2,000. And carpet has an Effective Life of 10 years.
To get the DV rate for carpet, you take 150 and divide it by the Effective Life. That gives you 15%.
(If the carpet was acquired after May 10 this year, it’s 200 divided by 10 = 20%.)
But you shouldn’t need this sort of detail for your tax return?
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http://www.depreciator.com.auIn the telling and retelling of the story about that 42% drop on that Sydney property, people are forgetting that the original story stated that the place needed $40K of ‘essential repairs’. Can you picture it? We’d be talking carpets beyond cleaning, walls and doors with holes in them, kitchen beyond repair etc etc. That property had been well and truly trashed. It’s naive to hold it up as being representative of the market. The media do this sort of thing, but we should be a bit more clever.
All big markets have huge differences across them. My Sydney PPOR has gone us 18% on bank valuations – same bank – during the slump. My Sydney IP went down, but is now back where it was before the slump.
And in Perth, I’m sure there are some areas where properties have gone up more than others in the same period.
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http://www.depreciator.com.auThe neighbour of an IP of mine (NSW) recently did a big reno. Before he did anything, he went into my place and did a detailed photo survey of the property. I assumed this was standard procedure.
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http://www.depreciator.com.auIf you were to rent a flat on a permanent basis away from your primary residence so you could be close to work during the week, would this be tax deductable?I know someone doing this. His accountant said it’s fine.
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http://www.depreciator.com.auGee, this one could end in tears.
Presumably you went into this with the intention of making a profit?
It’s going to be tough to work out an equitable split with the house half built. I would finish it, get a couple of valuations, and give your brother the option to buy you out.
What will be the CGT implications if you ‘sell’ your half of the property upon completion?
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http://www.depreciator.com.auDepending on where you live, Guardian Partners is another good one. They have an office at Bella Vista (Hills district). Coastymike used to post on this forum and still does on Somersoft.
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http://www.depreciator.com.auIf your property manager is sending monthly statements to the accountant and then the accountant is copying them and sending them to you, I can imagine how the hours are mounting up.
Like Elka, I get nothing sent to my accountant. At the end of the year, I e-mail him a Word document that has every incoming and every outgoing I can think of.
For each property, I just tell him the total rent (incoming) and then the outgoings: management fees, rates, depreciation, repairs etc. he loves it.
On the Word document, I also have a list of questions. I then make an appointment and go through the questions one by one with him. I find I get a much better response this way rather than bombarding him with questions at a meeting.
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http://www.depreciator.com.auYou’d be wise going through council. All it takes is a disgruntled neighbour to dob you in and you may have to pull it all down.
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http://www.depreciator.com.auHappy to have a chat about rough depreciation estimates for cash flow projections.
If you happen to have photos, that makes things a bit more accurate.
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http://www.depreciator.com.au5.6sqm is pretty tiny. I’m presuming both rooms have built-ins?
Seems to me that you think the rooms are pretty small. Future buyers and renters will no doubt have the same misgivings.
Internal bathrooms can be fine (but not ideal) if the exhasut fan works okay. They still get a bit clammy if there is more than one person using them i.e. if there are several showers per day happening in them. Most hotel bathrooms are internal.Tax Depreciation Schedules
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http://www.depreciator.com.auThey can also have very high cleaning/laundry charges that aren’t in the sales documentation. These charges can be as high as 20% of the gross rent.
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http://www.depreciator.com.auI did. It was an off-the-plan unit purchase. Went up in value about 30% before settlement, but that was because the market went up i.e. I didn’t do anything particularly clever – just rode the wave.
Cameron Bird have been around for a fair while – always a good sign.
Their research seems pretty thorough.
I’d say they’d be better than some marketers, but they are marketers and you’re paying them a margin. If you don’t have the time to do your own research, you could do worse than use them.
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http://www.depreciator.com.auI think that sort of configuration is fine for couples – and neat ones at that. Families tend to generate a fair bit of laundry and sometimes it’s good to have a room where the mess can be hidden.
If the laundry is going to be in another room, the bathroom would be more appropriate.
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http://www.depreciator.com.auNot very subtle, though.
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http://www.depreciator.com.auI’m always surprised that people selling a home/unit that may of the type to interest investors don’t consider getting a Tax Depreciation Schedule. I reckon being able to show an investor what sort of tax break they would get could be a reasonable selling point – especially if they’re evaluating a few properties.
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