Hi guys, just about to sign a contract for an IP unit and the developer have offered a funiture package which can be added on top of the purchase price. In this case the funiture package price should be tax deductible right?
Should I go ahead with the funiture package off the developer or is it worth finding a specialized company to do this? I know sometimes it also depends on the place where the property is in as some rental town prefer to have a properties unfurnished, any though about this?
Also like to hear some comments if the price is reasonable?
Here's some details:
Town: Emerald, Qld
Property details: 2/2/1
Funiture Package Price: Around 18k inc gst and deliverywhat furniture does this buy you? how much would it cost you to buy this stuff yourself?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Eddy
Whether you will receive a higher rent or not i shall leave to a local PM to respond to but a couple of other comments.
1) Whether it is added to the purchase price or you pay for it separately it will be Tax deductible.
2) The valuer will reduce the valuation by at least $18,000 so you need to ensure you have access to cash to pay for it come Settlement as lenders only lend against purchase price or valuation whichever is the lower.
Away from this arguement $18,000 is a fair amount to spend so you would want it to be quality fittings and fully furnished.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I agree with Richard, before you pay for a furniture package talk to a property manager o find out the demand of a fully furnished property.
Nigel Kibel | Property Know How
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JacM,
Well the 18k includes all funitures in these areas, Lounge, Dining, the 2 Bedrooms, electrical stuff like tv, fridge, outdoor, kitchen & some cleaning tools, can't really comment on the quality but from the photos they looked decent.Richard,
Just spoke to the agent and apparently the developer might be able to include this as part of the property purchase price so it can be part of the loan humm… confirmation by next week.Nigel,
Yea spoke to one of them PM seems like fully furnishing is not a bad option but this is quite subjective I suppose. I'm leaning towards the funiture package if the developer manage to make it part of the property price.If you are looking to rent the place out, you need to be quite solid in your understanding of whether the local market demands furnished accommodation. If not you might find it tough to get a tenant, or indeed get tenants of the short term variety.
I still think $18k is a lot of cash for furniture… have you compared it to what it would set you back to buy package deals from a furniture shop yourself?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Checking out with another local agent waiting to see what he says.
Just spoke to a design and funiture package company up in qld and they reckon to get something decent 15k to 20k would be around that mark. The difference is I suppose is that I can have more say in what funiture I want to put it and discuss with the designer but you can't do that with the developer.
hey Eddy123, I furnished a 4/2/2 house in gladstone for $8k using 2 suppliers, $18k seems excessive , id just get your property manager if youve picked one to set it up for you and give you guidelines on what companys/tennants require in there furnished leases.
Then you can just pick items online pay for it over phone etc if your interstate, well thats what i do. a good property manager will do this and only charge for desposal of all the rubbish boxes etc, if they want your business.If theres a demand for furnished property in emerald, which i would imagine being similar market to gladstone you may get 200-300 per week more furnished which will help increase your ROI , and if your furnishings are cheap you will recoup this cost quickly,
cheers Mick
wow you've done really well for a 4/2/2 with $8k, are you able to get decent enough funitures for this amount? No offends just taking some notes here.
My suggestion is get the price reduced by receiving an $18K cashback and then furnish it yourself if there is the demand. Ensure you rent at a premium as you will have to repair and replace furniture as it gets damaged.
I agree with the guys above that home lender won't consider this as part of the purchase so this $18K has to be funded through your own funds and I'm hoping the furnitures are worth >$18K.
Eddy trust me we finance enough deals in Emerald and know the valuers well enough to know that whatever the agent tells you the valuer will discount the value by the cost of the furniture.
Using a lender that goes off the Contract price only is your only option.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Eddy123 wrote:wow you've done really well for a 4/2/2 with $8k, are you able to get decent enough funitures for this amount? No offends just taking some notes here.Yeah eddy i got a tennant in place and the company didnt require cutlery, pillows, sheets etc, basic just fridge,microwave, washer, dryer, lounge, tv, entertainment unit, coffee table, dinning suit, outdoor setting , 4 queen beds and mattresses. Companys dont care if its top of the line just a good standard.
Just pointing out that you only need to purchase the minimum required by company, super amart have been a good source for beds/mattresses etc.
you can finiance the loan for the build, and get a top up to cover the finiance of furniture at completion, you can then still claim everything
ok I think I am going to pass on the funiture package now and think about it when the property is closer to a rentable date and also from what Michael suggested I could possibly be able to get away with furnishing just the required items for the tenants and save myself some money.
thanks for all the invaluable comments guys.
Eddy123 wrote:ok I think I am going to pass on the funiture package now and think about it when the property is closer to a rentable date and also from what Michael suggested I could possibly be able to get away with furnishing just the required items for the tenants and save myself some money.
thanks for all the invaluable comments guys.
On another note I had property advertised fully furnished by property manager and didnt buy anything until tennant/company was found and they gave a list of what furnishings they required, it was all pretty hectic but was done in a week apart from outdoor setting taking 2 weeks, this means if a tennant is hard to find at price you want "furnished" you can always change it to "unfurnished" and youve had no outlay. Sort of a win/win situation i thought.
Michael
thanks another good tip from ya.
Hi Eddy
traditionally I dont like furnished properties. Points to consider being wear and tear, responsibility to repair/replace and who are you going to attract to the property? They dont necissarilly generate that much extra income to justify it in my experience and depending on the location, may attract undesirable tenants or restrict who you attract and you may have more people interested in it unfurnished.
Agree with others – speak with a local PM as It's a very select market with usually low demand depending on the location.
thanks for the input too verity01, and yup, once the IP is almost ready for rent, I will source out a reputable PM in that area and ask them whether if I should go furnish or unfurnish.
Eddy
Less than 12 months ago, another developer in another estate was offering $12,500 for full furniture package for 2+1+1 villa in Emerald.
Of course the quality and the inclusion might be difference from one to another, but doubt that inflation has pushed the furniture price up to roof within 12 months.
Cheers.
SMY7484 wrote:EddyLess than 12 months ago, another developer in another estate was offering $12,500 for full furniture package for 2+1+1 villa in Emerald.
Of course the quality and the inclusion might be difference from one to another, but doubt that inflation has pushed the furniture price up to roof within 12 months.
Cheers.
There is about 5k in difference here in comparision to the pricing I have, the only thing I can think of is the quality and any price increase in funitures in the last 12mths, on the benifit of doubt it could still be possible.
In saying that, it's true that it is a lot of money for furniture so I think holding off for now is a good decision forward after all.
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