So in December last year we completed on a house in NSW and paid $365k for it with a 5% deposit. To cut a long story short I'm now living in QLD and renting the property without an agent to a friend at the discounted rate of $360p/w with no agent fees or contract. I spent probably $50k in renovating the house in the 3 months before I moved out into the place I rent in QLD. My questions are:
Do I need to have a formal rental contract to be able to claim the property as an investment and negative gear it?
I know I need to see an accountant/tax guy but what can I sensibly claim in the way of depreciation? All money was spent prior to me renting it (as I was intending on living there) and it was built in 1980.
Do you guys have any tips for a newbie with an investment property that might save me losing loads of money!?
is there any recommended software that I can buy to help manage costs and calculate rates of return etc? I would like to work out how much I need to charge in rent to become cash flow positive and how much tax I should expect to get as a rebate at the end of the year.
sorry for all the questions, there is lots to think about!
steve
Hi Steve
Get a formal lease in place. Even if your friends – you need to treat it as a business.
I'd also grab a depreciation schedule. Call up a quantity surveyor in your area and they might provide you with a general estimate on how much you're able to claim.
This spreadsheet might help you crunch the numbers http://www.passgo.com.au/investment-property-analysis-tool.html
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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