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The insurance risk is not worth it. After successfully managing my 4 properties for years I finally got caught. Tenant did $10K worth of damage and insurance paid for $800!!! BECAUSE I did not have a property manager doing the required inspections etc etc!!
Yes, DON"T MENTION TERMITES. I just had the bathroom from my IP renovated as termites got in and ate away the timber frame that held the bathtub up and the tub dropped leaving a huge gap and flooding the neighbouring room. Had to pull out the tub, shower screen, demolish the tiled frame and redo at a cost of between $ 6K and $10K (quote range). As there was no mention of termites (we didn't know it was termite damage when we made the claim and the builder assumed the timber frame had "failed", the insurance company paid for it. Had it been termites, then the damage to at least the timber framing WOULD NOT have been covered.
Apparently the QBSA adds the cost of all the trades together so if the total of all trades is more than $11K then you are supposed to get an owner builder licence
Seems like the solution is to use a licenced builder if you want to follow the rules as if you don't you are liable if anything goes wrong with the house for 6 years and you are supposed to make a declaration to buyers to say that the work is not covered by BSA insurance which I think would put some buyers off?I replaced a roof recently, it was a bit bigger than an average size house (was a small block of 3 x 1brm units). Cost $14K. I had other quotes up to $18K.
You don't say where you are though. If you are in a capital city, average size roof without difficult rooflines I think you might be looking around $8 – $10K.
Wow, wish I was EBM, after just having hell time with CGU who need to be avoided like the plague!
DO NOT go with CGU insurance!!
I am just trying make my first ever landlords claim with them for a property in Townsville and it is ridiculous.
Tenant vacated the property leaving $10k worth of damage /issues (filthy dirty – $1,000 cleaning fee, rubbish removal, broken fan blades, broken glass shower screen, 2 holes in the plasterboard, gutter pulled off, roof tiles damaged from kids walking on roof, holes in lino, security doors x 2 completely cracked thru, back door split, tenant took keys so had to replace locks, letterbox broken off stand, wheelie bin taken, full repaint needed inside as every wall is damaged, plus they owe $2,000 in rent).
I have just been advised that the ONLY thing from my claim they will cover is the broken shower screen!!! That's it! Nothing else!
My "Accidental Damage" policy with them is very specific and covers none of the above. They will cover the shower screen under a specific glass policy section…but nothing else.
The tenants broke the door stoppers (which were all new when tenancy commenced) and that was why the door knobs went thru the walls – so insurance says that is lack of maintenence! Floor coverings are specifically excluded (can't find anywhere in my policy documents where it says this!!); the bent fan blade is not "Malicious Damage" and is not covererd under accidental damage – same with the cracked doors, chipped bathtub,
They do not cover any cleaning or rubbish removal (I need to get a car removed from the back yard, and a broken trampoline, a pallet of bricks and a heap of broken furniture) as that is a "reletting fee".
And about the RENT – guess what – at CGU insurance – loss of rent covers basically nothing – it does not cover rent default, that is a specific extra (if I had known that when I took out the policy I would have got rent default but they didn't tell me), doesn't cover the property being unable to be tenanted for the 4 weeks that they have been messing me around "assessing" the damage.
AVOID AVOID AVOID
Anyone had an insurance company that did actually pay a claim? I need to change!
I would never buy off the plan. There is nothing immediately you can do to increase the equity, you just have to hope prices go up. If you buy something established that needs cosmetic work you can repaint, install new floor coverings, landscape etc and if you are savvy and do it smartly, you can add significant value to your investment in a fairly short time frame. You also have a better idea of the real value of the property.
A horror story for you – my clients purchased a 3brm beachside penthouse apartment 2.5 yrs ago in SE Qld for $2.2mil and have been trying to offload it recently and are looking at offers for $1.5 mil. If they are lucky, they may get $1.8mil. Developers promised the world and amazing values but in reality, there are still unsold units in the complex. Obviously they could have bought better, and in a better location, but there is still no immediate opportunity to create wealth from off the plan new developments.
I have just installed a new kitchen that I bought at auction, the benchtop is a manufactured composite stone acrylic, similar to corian and it STAINS!! Most marks come out with a creme cleanser like jif but there are a few cup rings that will not come out!
Have contacted the distributors and they just keep telling me it shouldn't stain etc etc, and that I need to polish it with CAR POLISH to keep it looking good and stain resistant! Anyone else ever hear of this or have any ideas what I can do with it. Obviously I have no recourse from the company as I bought it cheap "as is" as an ex display.
Hi Grant, I have a spare brand new one that I was going to sell if you're still chasing it. We ended up with two copies as we bought one for my parents as well, but they bought their own.
Anyhow, I can list on ebay and sell it to you through there so you have security for the transaction. I am in Brisbane if that works for you. Send me an email [email protected]
regards
CarlaDuckster, wouldn't they be exempt from CGT for the first 6 years? That was my understanding, so long as they don't claim PPOR on another residence in the meantime?
Can I still claim depreciation on the property while it's being rented out, assuming that I'm going to move back in within 6 years to avoid CGT liability?
I am interested in a Brisbane get together. My husband and I have 4 rental properties between us.
Carla
We bought on a busy main road in Brisbane, but we are not near a traffic light so there is no problem with access to our driveway from traffic buildup or anything, and the house is double glazed an there are no noise problems. We paid significantly less for the property due to its location, and were happy with that.
We are now looking at renting the property out and the real estate estimates we will have to ask 20-$30 week less rent because of the location, and that it will not appeal to some tenants (mainly due to the steepness of the driveway, not the busy road, as the quiet backyard will appeal to families). But overall, because of the significant cost saving in purchase, we still believe we did a good deal and are happy with our purchase as we would not have been able to enter the market otherwise.
Anybody else contemplated or doing this scenario?
any transaction that shows no real business purpose other than manipulating tax will draw ATO attention
on the other hand you have to draw the short straw and get audited……..just choose you own comfort level re risk/reward
How is this transaction manipulating anything? They are not doing it to manipulate tax, they are merely taking advantage of an offer from their employer. This is nothing to do with a tax strategy, they are simply looking at a way to take advantage of their employer's offer to pay their rent as far as I can see. ??
I am entitled to lease my house out to anyone – even my employer if I so choose, and if they allow me to live in it then how is that relevant? This is no different to placing the house on the rental market and renting it out and living in another house while their employer pays their rent. Except in this instance it's even more logical due to the rental shortages in their area. ATO can investigate all they want and what can they do….they are doing nothing wrong.Thanks for your response duckster.
I can't move into either of the other properties as they are in Mount Isa (bought solely as IP's) and I am in Brisbane.
My tax rate will only be 30%.
How do you get the figure $11,000?
I can't see why you can't lease your home to the mining company. Who they choose to allow to live in it (ie. yourselves) is their business and where you live is your business and no business of the ATO. So long as you declare your income from the lease honestly, you should be able to treat it as any other IP as far as I am aware.
I am currently selling my own property back to myself via a trust to maximise debt and tax advantages.
let me know if anyone knows differently to this.
If it were me, I think I would keep your existing property.
You are going to lose money if you sell (according to the agent) by the time you take commision and advertising etc. But bear in mind, that’s only the CURRENT market. In the long term, even in Tasmania I am confident you will see a significant rise in value. If you can afford to, hold it and buy something cheaper to live in.
The fact that it hasn’t increased significantly in the past 2 years is not necessarily bad, Tasmania hasn’t boomed like the rest of Australia, and may never, but it will still go up in value. I think you should expect reasonable growth in the long term. You may not have made a great decision to buy where you did, but there’s no point just selling to lose further, when you might be able to turn it around in the future.
We had an ugly duckling in a 2-bit town in the middle of nowhere and it sat unrented and unsold for years, we literally couldn’t give it away. And then gradually, after years, the market has slowly slowly risen and now it’s worth double and rents easily and is very easily saleable – and it was a DOG!
cheers
Just a follow-up on what has happened with this issue.
Yesterday I contacted vendors solicitors regarding this matter demanding to know what the holdup was – guess what – in 5 months, my solicitor had not even ONCE contacted them to advise of the oversight and they were not even aware that it had occurred.!!
In frustration, I contacted the Qld Law Society regarding this matter. They pursued it for me and within ONE DAY, I had the managing partner of my solicitors firm contact me and get my bank account details. Apparently they are going to refund my money in full within 7 days and pursue the vendors themself! BRAVO! Thanks for all your help, thanks to QLD LAW SOCIETY in Brisbane, they are brilliant!
[biggrin]How did you go about getting finance, and what lender?
thanks
Seems like the solution is to use a licenced builder if you want to follow the rules as if you don't you are liable if anything goes wrong with the house for 6 years and you are supposed to make a declaration to buyers to say that the work is not covered by BSA insurance which I think would put some buyers off?
