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depreciation deductions

How Investors can save thousands this October 31

Investors who self-assess or estimate costs based on their own judgement when lodging their tax return are potentially missing out on thousands of dollars, according to BMT Tax Depreciation.

With the October 31 tax deadline fast approaching, It’s common for investors to self-assess or estimate costs based on their own judgement when lodging their tax return.

However, investors who do so are potentially missing out on significant depreciation deductions by incorrectly evaluating their claims.

Depreciation is one of the most lucrative tax deductions because it’s a non-cash deduction, meaning investors don’t have to spend money to be eligible to claim it.

The Australian Taxation Office (ATO) allows owners of any income-producing properties to claim depreciation for the building’s structure via capital works deductions and for the plant and equipment assets contained within the property. 

In residential properties, capital works deductions must be depreciated at a rate of 2.5 per year for a maximum of forty years, while eligible plant and equipment assets must be depreciated over time using an effective life supplied by the ATO.

Read more about tax depreciation on the BMT Tax Depreciation website

Property investors who choose not to seek expert advice and self-assess deductions put themselves at risk of using the wrong depreciation rates and classifying items incorrectly.

As a result, they could be missing out on thousands of dollars’ worth of deductions. 

Quantity Surveyors are recognised under Tax Ruling 97/25 as one of the few professionals with the expert knowledge necessary for estimating construction costs for the purposes of calculating property depreciation.

A Quantity Surveyor can assess a property and provide a comprehensive depreciation schedule which outlines depreciation deductions accurately.

A tax depreciation schedule is the best way to ensure the biggest tax refund possible and can act as evidence should the ATO complete an audit of a claim.

There is no item too small to consider including in a schedule.

Low-cost assets and low-value assets all add up to maximise depreciation benefits.

If an asset has sufficiently low value, legislation allows it to be written off much faster or even claimed in full immediately.

A BMT Tax Depreciation Schedule covers all deductions available over the lifetime of a property (forty years) to maximise cash flow.

In FY 2018-19, BMT found residential clients an average of almost $9,000 in first-year tax deductions.

To find out more, Request a Quote or speak to the team at BMT Tax Depreciation.

Source: The Real Estate Conversation 8th October 2019 https://www.therealestateconversation.com.au/news/2019/10/08/how-investors-can-save-thousands-this-october-31/1570497759

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

 

spring property market

Spring has sprung | What’s happening to the property market?

Here’s what Australians can expect for the property market this spring.

As the weather heats up, so too does the property market.

spring property market
 
The market is warming up for spring with more properties being listed, good buyer enquiry for the lower price points and auctions being scheduled.
 
The higher-end price points are still a little soft and we’re not seeing much movement here, but if vendors are realistic they will get their properties sold.
 
During the winter months, we saw the rental market soften, as there is a lot more supply on the market due to the surge in duplex and unit builds over the past few years.
 
This ‘investor grade’ stock is now hitting the market in volume and renters can certainly get themselves a spring bargain if they negotiate a little.

We are seeing more and more incentives being offered to tenants than in years gone by, as landlords try to reduce vacancy on their properties.
 
It’s a good time to be shopping for a rental as there is rent-free periods, free iPads, water bills paid for 6 months and more rental incentives.
 
As for auctions, they are still not performing as well as they have in times gone by.
 
This is not so much a reflection of the time of year, but more a reflection of the changing lending landscape.

It’s harder for buyers to get finance so this keeps them wary of auctions.
 
This isn’t likely to change a whole lot between now and the end of the year.
 
Sellers do however have renewed confidence in the market, which will result in more stock becoming available.
 
Vendors will need to remain realistic with their pricing or they could find it hard to sell.

If they price right, they will attract a good amount of buyer interest.
 
Many sellers have been waiting for Spring to list their properties, so this is already starting to show through the listings.

I expect Adelaide, Brisbane, Canberra and Perth to experience the strongest price growth over the next three to five years compared to suburbs in once-booming Sydney and Melbourne.
 
The strong growth in Adelaide and Brisbane will come from strong job creation, infrastructure spend and high levels of buyer demand as well as the major public projects for Brisbane.
 
There’s also renewed confidence and great employment opportunities in Perth, leading the way for long-term property opportunities.
 
The key for anyone looking to get their head around a market is to look at vacancy rates, median price movements over the past 12 months and the median number of days on market alongside a whole lot of other statistics.
 
In Brisbane, we like Wynnum in the East and Nundah in the Inner North.
 
For Canberra, some of the areas we like are suburbs in and around Gungahlin. Firstly, you’ve got a lot of good services and amenities and secondly, you’ve got the new trams that pass through.
 
The little undiscovered areas 25 minutes south of the Adelaide CBD are also projected for growth. Suburbs around Morphett Vale, Woodcroft and even as far as Edwardstown are all affordable, have a good rental demand, good infrastructure and facilities and plenty of jobs.

Source: The Real Estate Conversation 18th September 2019 https://www.therealestateconversation.com.au/blog/anna-porter/spring-has-sprung-whats-happening-the-property-market/anna-porter-economist/anna

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

 

property styling

How Property Styling Boosts Sale Price

You shouldn’t judge a book by its cover – but buyers can and do judge a property by its presentation. With property styling, sellers can rise above the competition and negotiate the best possible profit.

property styling

In a digital age where buyers generally first view a potential new home or investment online, your property obviously needs to make a strong visual first impression.

As the seller, you want the property you are aiming to offload to look its very best, to appeal to as many potential buyers as possible.

Think of your home as a model. Professional models who sell products typically require some help to look as good as they do on promotional material: hair, makeup, styling, good lighting. The same applies to your real estate asset – and this is where property styling comes in.

“Property styling involves elements of maintenance and styling, including furniture and accessory installation, to present your property at its best before the property goes to the market,” explains Naomi Findlay, renovation expert and founder of the International Institute of Home Styling.

“It is not interior design, and it is not full scale renovating for wealth or house flipping. It is all about return on investment. Data collected from a leading Australian home staging company illustrated that during 2016, for every $1 invested in property staging, the property owner received a return of $20 on average.”

In fact, it’s estimated that staged properties boost sales prices by an average of 10%. So just how does property styling deliver that kind of benefit – and how can you incorporate styling into your property investment?

Source: Your Property Investment 22nd August 2019 https://www.yourinvestmentpropertymag.com.au/news/how-property-styling-boosts-sale-price-265161.aspx?utm_source=GA&utm_medium=20190822&utm_campaign=YIP-Newsletter-Opener&utm_content=&tu= 

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

 

market

Why there is never a market equilibrium

The market is currently in a sweet spot between market feast and famine.

market

When it comes to property markets, there is usually never a perfect equilibrium. 

What I mean is there is usually an oversupply or undersupply stock situation, such as too many new units being built. 

In the finance sector, the same goes, with lending either constricted or overflowing. 

Both of these factors have an impact on buyer and investor sentiment, but also the sentiment of vendors and selling agents, too. 

Plus, there are seasonal factors to consider such as winter, which is usually a period of slower market conditions. 

Of course, this is purely psychological because the time of year should have no impact on market activity. 

Also, there is the tax season when investors in particular are waiting on insights from their accountants to better understand their numbers, and whether they can afford to buy another property for their portfolio.

Changing times

So, it stands to reason, that July is usually a lower listings month because it’s the dead of winter, and not many people want to buy or sell. 

However, new SQM Research has highlighted that the number of listings, while still seasonally low, have reduced significantly from the same period last year in some locations. 

In fact, according to the research, year-on-year Sydney’s listings declined by 10.5 per cent, Darwin declined by 4.8 per cent and Perth by 2.6 per cent.

One of the reasons why this could be happening is that some vendors still have their heads in the property clouds, and aren’t prepared to list their properties until prices mystically go back to the levels that they were a few years ago.

Also, because of lower interest rates, more people are able to hold on to their properties, rather than selling because of cash flow problems. 

Going back to my original statement, though, currently there is an imbalance of buyers in my opinion.

That’s because many were stuck on the sidelines as they couldn’t secure finance until the serviceability calculations were reduced recently. 

Some of them now have the “fever” and are just buying any old thing, while the smart ones are being strategic with their property purchases.

The first state of play is where bidding wars take place, which is starting to happen more and more at auctions. 

Another sign of the market changing can be evidenced through my regular attendance at housing commission auctions in a suburb of Sydney. 

Over the past four months, attendance has gone from being half-full to standing room only. 

Plus, the sale prices of those properties have skyrocketed from about $388,000 to $476,000 in the space of a few short months. 

Another sign of market change is that the volume of listings with no price guides or advertised as “offers over” are also on the rise, because sellers and agents recognise the equilibrium is starting to swing back in their favour.

However, it’s not there yet. 

In fact, I believe we are now in a unique position that will see, by years’ end, the pendulum swing significantly back towards sellers.    

Many fundamentals are pointing towards stronger market conditions next year due to higher government spending on infrastructure, lower interest rates as well as incentives such as the first home buyer deposit scheme, which are all aimed at stimulating our economy.

That’s why the equilibrium is still on the side of buyers, even though listings aren’t exactly flush. 

Within six months, though, the number of buyers will have supercharged, and they will be competing against each other to purchase property – regardless of its quality. 

The smartest investors won’t delay before making their move. 

Source: The Real Estate Conversation 21st August 2019 https://www.therealestateconversation.com.au/blog/victor-kumar/why-there-never-market-equilibrium/victor-kumar-blog/victor-kumar-why-there-never

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

 

deposit

7 Tips For Saving Your Deposit

Investing in property is an enterprise that can take a lot of research, advice and sometimes even trial and error to get off the ground. And, most importantly, it takes money. There are many costs involved when it comes to buying a property, one of which is the initial deposit you’ll need to put down. Generally, most buyers aim to save or access a deposit of 10% of the purchase price, although a deposit of 20% is ideal if you want to avoid lenders mortgage insurance (LMI).

deposit

Prime Minister Scott Morrison recently outlined a First Home Loan Deposit Scheme that could help some buyers get their property goals off the ground with a deposit as low as just 5%. While the plan is intended to help first home buyers enter the property market, not investors, this could be a step towards rentvesting for those who are keen to leverage the scheme. For many, the prospect of saving a property deposit is daunting and is something they focus on once they are closer to wanting to buy. But to give yourself the best chance of growing the biggest possible deposit, you should ideally start planning and saving at least two years before you hope to buy.

This would mean you could save a greater amount and wouldn’t need to borrow as much from a bank or lender, which would serve you well in the current climate in which many investors are hampered by strict lending conditions.

 It would also increase your borrowing power and expand your loan options by allowing you to demonstrate a positive savings habit to potential lenders. In addition, if you could avoid having to pay the fee associated with LMI – which is a insurance policy that protects the lender in case of default – you could stand to save thousands of dollars.

For many investors-to-be, saving a property deposit can be a difficult prospect, especially if you find that you run out of money before you run out of month as it is. But with our tips for saving, you could be well on your way to landing your first investment property sooner rather than later.

1. Get budgeting

Budgeting sounds like the obvious tip – and it is. However, clear, strategic budgeting is about much more than simply saying you will put ‘X’ amount into your deposit savings every pay period. Instead, see if you can work out a budget that includes paying yourself a regular amount – enough to cover your essential bills, plus a discretionary spending allowance. You might find that it leaves you with more to set aside than your initial ‘X’ savings amount. To boost this value, look for opportunities to skim costs, such as by cooking more and eating out less. Go on a spending freeze for a month, when you don’t spend a cent on anything unless it’s absolutely necessary. Opt for Netflix and homemade comfort food rather than going out for dinner and a movie. In other words, make a few small sacrifices now to reap the rewards later.

2. Reduce your rent

This can be one of the most effective ways to save for a property deposit, as paying rent can take up a huge chunk of your earnings each month. While it’s not feasible in every situation, there are various ways to reduce rent, such as by housesharing, moving back in with your parents, or moving to a cheaper location. It might be slightly painful in the short term, but keep your eye on the prize: property ownership awaits.

3. Consolidate debts and credit cards

Consolidating debts and credit cards can reduce your repayments and interest, which frees up cash that can be redeployed into your savings account. Not only that, but the less debts you have, the more favourably your bank will look upon your home loan application. Banks offer debt consolidation or personal loans that allow you to combine these payments into one; or you can just make a plan to carve through your debts and smash it as swiftly as possible.

4. Simplify your life

Simplifying sounds… simplistic, but foregoing some of the little things will also help you save money. For instance, if you spend $100 over the course of the week on buying beverages – a coffee on the way to work or a beer at the pub after you’ve knocked off – then that’s $5,000 you’ve frittered away in a year alone. For every meal out that you would have bought, put that money into your savings. Work out what other things you can cut back on, and put the money not spent into your savings.

 

Do you use your gym membership, for instance? Could you use the exercise equipment in a park instead, or do you have equipment at 

home? Remember, cutting back to save a deposit doesn’t mean you have to live a completely spartan lifestyle, but it will be worth it when you reach your end goal.

5. Be a mindful consumer

Really think about your usage of fans, heaters and air conditioning throughout your home – energy bills can chew through thousands of dollars per year, and being smart about your consumption could see you make some significant savings. Could you hang your clothes out to dry instead of using a dryer, and wait to do your laundry when the load is full instead of in smaller batches?

6. Access the First Home Owner Grant

If this is your first home, you may be eligible for the First Home Owner Grant – however, there are conditions to be met, depending on the state or territory in which you intend to purchase the home, and the price of the property. Requirements vary, but generally you need to be a permanent resident or a citizen of Australia, and intend to buy the property as an individual and not as a corporation or trust. The applicant must live in the property as their principal place of residence within 12 months of the purchase, and remain there for at least 12 months.

7. Seek support

Some of the ways that family could help you get a leg up on the property ladder include lending or gifting money towards a deposit, or agreeing to go guarantor on the loan (using a proportion of the equity in their own home or investment property towards your property loan). As guarantor, they also become responsible for making loan repayments in case you are unable to do so; thus, you become a less risky prospect for a lender. The best way for this situation to work is when there is a win-win for both parties – for instance, if your parents provide a 20% deposit, then they retain 20% of the property’s value. Look for ways to exchange value, remembering that it might not always be monetary.

Applying these tips and learning how to save will not only help you get started in property investment but could also result in some important lifestyle changes that could benefit you in the long run. Not only will you be able to work towards saving a deposit but you’ll also be ready for a rainy financial day.

Source: Your Investment Property 25th July 2019 https://www.yourinvestmentpropertymag.com.au/property-tips/7-tips-for-saving-your-deposit-264440.aspx?utm_source=GA&utm_medium=20190728&utm_campaign=YIP-Newsletter-Opener&utm_content=&tu=

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

 

Tax Talk: Renovations Versus Repairs

Upgrading your investment property can propel it into its next stage of growth, but it can cost a pretty penny along the way.

Knowing which costs are immediately claimable from a tax perspective, and which ones are not, can make all the difference when preparing your reno budget.

Early on, the question must be asked: which repair costs can be funnelled back to you through the means of a well-prepared tax claim? And which costs are classed as a renovation, and are therefore added to your cost base – making their benefit known only once you sell the property?

The Australian Taxation Office (ATO) stipulates that a rental owner is entitled to claim the costs of any type of work done to an investment property, provided that the expense ultimately contributes towards its overall maintenance and repair.

By ‘repairs’, the ATO hones-in on any corrections that are made to damages, defects or instances of ‘wear and tear’, inflicted on the property during the time it is rented out to tenants.

“To repair something means to fix defects, including renewing parts. It does not include total reconstruction,” the ATO confirms.

So, in practice, whilst the replacement of a broken shower head or the re-sealing of a leaking bathtub are both considered tax claimable, transforming a perfectly functioning bathroom into an Art Deco meets Moroccan affair wouldn’t necessarily inspire the tax office’s seal of approval.

On the other end of the spectrum to ‘repairs’, there are the costs that are put towards the ‘maintenance’ of the rental property, which are also tax deductible. But what types of work does this cover?

Source: Your Investment Property 2nd August 2019 https://www.yourinvestmentpropertymag.com.au/news/tax-talk-renovations-versus-repairs-265044.aspx?utm_source=GA&utm_medium=20190804&utm_campaign=YIP-Newsletter-Opener&utm_content=&tu=

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

rentinvesting

This is what first home owners need to do to get into their dream homes

Under current market conditions, purchasing a home in idealistic locations can prove quite tricky, especially for first home buyers.

rentinvesting

It is a great strategy for first home buyers looking to get into the market when they just don’t have the budget to buy their dream home.

So, they invest in more affordable markets and rent where they like to live while their investment is working for them to build up their deposit power.

For example, one young couple I’ve worked with, Tara and Martin, lived in Sydney’s expensive Inner West but could not afford to buy their $1.5 million dream terrace where their repayments would have been more than $6000 per month.

So, they adopted rentvesting and continued to rent in the Inner West for $550 a week.

They then strategically invested in Dapto and Adelaide where both property purchases were under $400,000.

In three years, they made just under $300,000 in equity which will go to their deposit power back in Sydney when the time is right.

If purchasing your dream home lead to mortgage repayments $5,000 a month, but renting in the same area had rental repayments of $2,500 a month, you would be left with $2,500 per month to invest.

To get started as a rentvester, firstly, you must get access to a deposit (as you would if you were purchasing their dream home).

The deposit can be obtained by savings or using your parent’s equity through parent pledge type structures.

You’ll need 20 per cent of the purchase price, plus stamp duty. It’s best to speak with a broker about the options and exact figures for how much is needed.

Next, it’s crucial to set a budget for buying and development an investment strategy, either yourself or with the help of a buyer’s agent.

When selecting a buyer’s agent, avoid the spruikers and cowboys of the industry by only working with firms who do not take kickbacks or buy off the plan.

Finally, you’ll need to pick your market. The best thing to look out for here is a market positioned for good growth in the first 3-5 years so you can build deposit power.

Look for areas driven by infrastructure, rental demand, employment and population growth.

My team like to look at areas down around South Adelaide such as Woodcroft and Morphettvale where there are markets you can buy in for under $400,000.

The Suburbanite team also look towards Flynn, in the ACT, which is gentrifying and starting to go through the urban renewal process.

What happens after selecting your market and purchasing a property for rentvesting?

It’s important to be patient while the value of the property increases with the market and remember to pay down as much extra off the loan as you can so you can build your equity even faster.

Once you have a good amount of equity, you can sell it to cash out of leverage it to buy your own home.

Some rentvesters will even do this 2-3 times before cashing out and buying their own home to really double down on their deposit power.

Successful rentvesting doesn’t come easy. Here are my top tips to successfully rent-vesting:

  • It HAS to be a growth market driven by employment, infrastructure and population growth
  • Avoid new or off the plan as they have lending risks, are slower to grow in value and can be at risk of over supply
  • Don’t be tempted to sell the property too soon, 12 months is not long enough to build equity in the property market and you typically need to work on a 3-5 year strategy. So be patient…

 

Source: Your Investment Property 12th June 2019 https://www.therealestateconversation.com.au/blog/anna-porter/this-what-first-home-owners-need-do-get-their-dream-homes/rentvester-tips/investor

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

Property Politics: What does the federal election mean for investors?

What does the continued Liberal government mean for the Australian property market and our investors?

The nation has breathed a sigh of relief that the Federal election is now over and we can all start to move forward with a greater degree of certainty.

Negative gearing remaining untouched is one of the most key policies for Australian investors.

Fear-mongering in the media built up over the last few months with even Prime Minister Scott Morrison predicting that ALP’s proposed changes to negative gearing would result in a housing market crash.

The ALP also proposed increasing capital gains tax which was another nail in its election campaign coffin in the eyes of the investment community along with the unpopular retiree tax which would have stung self-funded retirees.

Even the sweeteners weren’t enough to save ALP with Australians seeing through the thinly veiled attempts to support construction of new property with the proposal for negative gearing to only apply to brand new property.

Sentiment will almost instantly improve in the construction and development sectors safe in the knowledge that property will remain Australia’s preferred investment class and that investor appetite for property new and old, will continue unabated.

The message to ALP was abundantly clear – hands off our investment property policy thanks very much!

We can expect the market to continue to hum along without the changes to negative gearing for investors – but what else is in store?

The Coalition campaign relied heavily on the words “strong economy” to get it across the line, but just how strong is the Australian economy right now and what does it need to get into place to bolster it?

According to the Reserve Bank of Australia (RBA) the economy may not be as strong as our politicians would have us believe.

RBA has scaled back its forecast for economic growth this financial year in its latest monetary policy statement to just 1.7 per cent, over half a percentage point below its previous forecast.

In addition wages growth remains stagnant and according to commentators, has been weaker over the past six years than at any other time since World War II.

Property prices in many capitals have cooled after the period of unprecedented price hikes and inflation is at a historic low of just 1.3 per cent, well below the RBA’s target range of 2 to 3 per cent for more than three years.

Employment growth has been moderate but is driven by the public sector and community services while sectors considered key to driving the economy, such as manufacturing and retail, are shrinking.

While Morrison has played Mortgage Insurer for First Home Buyers, the finer details need to be fleshed out in order to deliver a great policy to stimulate the market.

ScoMo and his team really have their work cut out for him to get our domestic economy cranking.

But right now for Australian investors these conditions create a buyer’s market.

Prices have come off the boil across many key markets and savvy investors can snap up some good deals that will show growth over the medium to longer term.

According to the latest HIA Affordability Index, housing affordability improved across the country by the fastest rate since September, 2013 – with the Index rising by 2.2 per cent nationally in the March quarter.

Interest rates remain low and are forecast to be reduced even further over the next 12 months.

With no changes to negative gearing policy properties both new and old will have appeal and offer different advantages for each investor’s unique circumstances.

The election is no longer looming over us all so after a “sit and wait” period over the last few months we can expect to now see greater activity in the property markets.

All eyes will be on the Coalition to see if it can live up to its campaign promises now and keep the Australian economy strong.

Source: The Real Estate Conversation 24th May 2019 https://www.therealestateconversation.com.au/blog/james-nihill/property-politics-what-does-the-federal-election-mean-investors/federal-election

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

boost rent

Seven Proven Strategies For Boosting Your Property’s Rent

It’s a dilemma every landlord has to face at some point: when, and by how much, should you increase your rent?
boost rent

You might fear raising the rent too much and driving your great tenants away, while at the same time you know you’ll never achieve property mogul status if you continue leasing your property for rock-bottom rent.

Here are seven strategies proven to boost your rental return, which you can implement across your property portfolio. Of course, this advice is general and does not take the place of speaking directly to your property manager or investment advisor, who should be able to guide you on specifics such as the market rent for the area and what local tenants are looking for.

1. Little and often
By far the most successful way to hang on to good tenants and keep your rental returns increasing is to raise the rent by a small amount every six or 12 months, depending on the legislation in your state.

If you don’t increase the rent for several years, then hit your tenants with a $50 per week rise out of the blue, they’ll be understandably annoyed and you may find your next communication with them is when you receive their ‘Notice to Vacate’!

Instead, try tacking $5 or $10 per week onto the rental amount at a time. Each of these small, incremental increases will be affordable for your tenants, meaning they’ll be less likely to jump ship and leave you with a vacant property that’ll cost you money to maintain while you find new tenants.

2. Know what tenants want
As a landlord, it’s easy to get caught up and throw good money after bad when it comes to making improvements to your property. Unless you know what tenants are looking for, you can’t possibly cater for it.

You could spend thousands repainting or installing a dishwasher, when an air conditioner may have made the property much more appealing to potential tenants, at half the price.

Seek feedback from your property manager about the must-have items on tenants’ checklists. And if you’re unable to offer some of them, such as off-street parking (which you can’t manufacture out of thin air), perhaps you can make up for this with another coveted feature, like solar panels to reduce their energy costs.

3. Consider allowing pampered pooches
While laws in some states now make it illegal to discriminate against tenants who own a pet, many landlords still prefer their investment properties to be occupied strictly by humans only.

If you’re willing to allow pets at your property, your goodwill could see you rake in extra rent from a grateful animal owner. Most tenants with pets will apply armed with references from previous landlords, so you’ll know they are responsible when it comes to limiting the damage their pets cause to the property. You may even be able to insert a clause into the lease covering damage done by pets, or to ask for a slightly larger bond amount just in case.

4. Give the property a makeover
It doesn’t have to be a super-expensive renovation with all the bells and whistles – improvements as small as a fresh coat of paint or new door handles on the kitchen cabinets could be enough to attract more tenants and bump up your asking rent.

Do your sums to make sure the investment will pay off, and consider speaking to your accountant to ensure you understand exactly what is tax deductible, as this may inform your reno choices.

There are myriad minor changes you can make that will give the property a new lease of life: think sparkling new taps, adding a second air-con unit in the master bedroom, or ripping up the tatty old carpet and polishing the boards underneath. Many small jobs can even be done yourself, saving you the extra expense of calling in a tradie. The rooms that tenants tend to pay the most attention to are the bathroom and kitchen, so your time and money are often best spent in these areas.

5. Add a unique selling point
Have a look at the rental listings in the area. How many have alfresco entertainment spaces, ducted air conditioning or solar panels? It’s well worth considering adding something to the property that will make it stand out from the rest, allowing you to justify why it is a little more expensive to rent than similar nearby properties.

What you choose to add will depend on the location and your target tenant of course, but remember that by improving what you’ve got to offer you could actually begin to attract a whole new demographic – one that has more spare cash to splash out on rent. For example, professional couples likely crave an outdoor dining space, families will be impressed by a secure yard with safe, flat surfaces for the kids to play in, and eco-lovers will be drawn in by sustainable-power options.

6. Keep on top of changes in the area
Has a new shopping centre, freeway or swimming pool recently been built near the property? What about the awesome local schools, childcare centres and parks?

Don’t forget to emphasise these when you next advertise your vacant property, so you catch the eyes of higher-paying tenants. Improvements to services and infrastructure may also boost median figures in the suburb, which you can then use as a reason to increase your own rent. And the best bit is, unlike renovating, it won’t cost you a cent!

If you find your tenants fleeing when their lease is up, it could be bad customer service, not the rent, that’s sending them packing.

7. Audit your property manager
Property managers play a huge role in the success of your rental portfolio, from how they handle repair requests from tenants to giving good advice on when to increase the rent.

If you find your tenants fleeing when their lease is up, it could be the bad customer service they’re receiving, not the rent, that’s sending them packing. Many tenants are willing to pay a few dollars a week more for a property manager who attends to issues promptly and communicates effectively with them, so it may be time to assess whether the one you’ve employed is giving you the best chance possible of charging premium rent.

Source: Your Investment Property 7th May 2019 https://www.yourinvestmentpropertymag.com.au/property-management/seven-proven-strategies-for-boosting-your-propertys-rent-262537.aspx?utm_source=GA&utm_medium=20190512&utm_campaign=YIP-Newsletter-Opener&utm_content=&tu=

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

negative gearing

PCA and REIA speak out after Labor announces start date for proposed negative gearing changes

Labor’s announcement that January 1 will be the start date of its proposed negative gearing and capital gains tax changes has drawn condemnation from the Property Council of Australia and the Real Estate Institute of Australia.

negative gearing

The Property Council of Australia and the Real Estate Institute of Australia have again voiced their disapproval to Labor’s proposed changes negative gearing and capital gains tax after Shadow Treasurer Chris Bowen announced January 1, 2020 as the date when the reform would come into effect.

A week after welcoming a report from SQM showing the proposed impact of the changes, REIA president Adrian Kelly has used the release of further details from Mr Bowen to reiterate the association’s concerns about the policy.

“The REIA has always been concerned with the impact the policy would have on housing markets, buyers, renters and economic activity,” he said.

“This concern is magnified in the current market.

“There is almost truck loads of analysis and reports showing the adverse impacts of the policy on mum and dad investors, home owners, renters, the construction industry, state governments and the economy.”

Property Council of Australia chief executive Ken Morrison. Source: PCA

Much of the concern regarding Labor’s plan to reform negative gearing and halving the 50 per cent deduction on capital gains allowed across asset sale has stemmed from uncertainty regarding the timeline of the policy

Property Council of Australia Chief Executive Ken Morrison said while the council remained “strongly opposed” to the plan, they were relieved the opposition was not going to rush the changes through parliament if elected.

“We are relieved that the Opposition has taken account of industry views and does not intend to rush this change in for a 1 July 2019 start date if they were to win government,” he said.

“To do so would have required retrospective legislation, rushed drafting and no opportunity to take expert advice from Treasury and stakeholders.

“We remain concerned with the impact of these tax changes on new housing construction, with a survey of investors commissioned for the Property Council indicating that this policy will not create the stimulus for new housing construction that the ALP has assumed.”

Source:  The Real Estate Conversation 29th March 2019 https://www.therealestateconversation.com.au/news/2019/03/29/pca-and-reia-speak-out-after-labor-announces-start-date-proposed-negative-gearing

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.