All Topics / Help Needed! / Turning unit into an investment property – help needed

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  • Profile photo of setekhsetekh
    Member
    @setekh
    Join Date: 2008
    Post Count: 9
    February 17, 2008 - 9:36 pm

    Hi i have some questions that hopefully someone can help me with. My partner and i own a 2 bed, 2 bathroom unit that we currently live in. We want to rent it out at the end of the year and go travelling and are hoping it can nearly pay for itself when we are gone, when we count in depreciation etc.

    Monthly repayments are approximately $2300*12 = 27600
    Body corporate – $3000
    Rates – $1200
    Weekly rents would be $400 * 52 = $20800

    Losses – $8300

    We would rent it out furnished and are wondering how we would calculate the depreciation for this place. The unit
    is approximately 6 years old.

    Any other tips, advice would be most welcome. Thanks in advance.

    Set.

    Profile photo of JLJL
    Member
    @jl
    Join Date: 2007
    Post Count: 110
    February 17, 2008 - 9:55 pm

    setehk,
    Seek the services of a quantity surveyor to do a depreciation schedule.  This will give you all the details you will need.
    JL

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856
    February 17, 2008 - 10:47 pm

    Don't bank on 52 weeks worth of income.
    Management fees for agent?
    Landlord insurance?
    Repairs/Maintenance costs?

    Was a depreciation schedule provided when you bought the unit (if purchased new)? This will be a good starting point for any QS.
    Is the current loan P&I or IO?

    You will need to make up the shortfall between net income and expenses (it doesn't fall from the heavens in your absence – at least $150 pw).

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    February 18, 2008 - 11:38 am

    you could probably claim 2.5% of the building cost as depreciation per year. Then you can claim the depreciation of fittings such as lights, carpets, curtains etc and you will be able to claim certain items of furniture, maybe full cost or depreciation depending on what the item is. it would be well worthwhile to get a QS in.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    February 18, 2008 - 1:52 pm

    It will all depend on how old the building is as to the rate of Building Write off you can claim.

    It could be Nil / 4% or 2.5% of the original construction cost.

    Richard Taylor | Australia's leading private lender

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