I'm going overseas for 2 years and want to rent my unit with fully furnished to my friend. Should I get the Real estate agent to manage it? Or if I do it by myself, do I need to form the contract for renting the unit with the furniture for the tax and depreciation purpose? and I read that you can claim the electricity & phone from rental property as well, how do I do it? Do I have to keep the account in my name and pay bill? Will it make things too complicated?
Thank you for all replies in advance.
We do this now.
We have a PM, and they handle everything; all the rates payments, repairs, collect rent etc.
It costs 7% of the rent, but is worth it for us to set and forget. It is also a tax deductible expense.
All the expenses related to holding the property are tax deductible, the furniture will be depreciable, as is the house if it is built after 1987, but you will need to talk to your accountant about the impact on your position while overseas, as you won't have an income tax from Aus to deduct the expenses against.
Even though it is friend renting the propety; treat this as a business transaction.
Get a PM to handle the property, get Landlord's Insurance, get onto the accountant.
A couple of things to consider:
1 – as your friend will rent the property, use a standard form lease & take a bond (the managing agent will do this if you engage one, however it is a reasonably simple process of going to the newsagent and picking up the documentation, & filling in forms.)
2 – Managing agent will take the hassle out of any repairs/maintenance which needs to be done in your absence
3 – Why would you even consider paying the electricity/water charges without passing them on to the tenant? This allows them to 'rort' your generosity by running appliances 24/7 eg air con/ pool filters, taps etc without incurring any cost.
4 – Engage a QS to do a complete depreciation schedule, more important since the unit is fully furnished
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