re/max profile landlords' newsletter june 2016
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RE/MAX Profile Landlords' Newsletter June 2016TRANSCRIPT
In this edition: How long will it take for your property to rent? Finding Tenants in a High Vacancy Marketplace Tips for Investors to Prepare for EOFY
June 2016
Negative Gearing—How The Changes Will Affect Landlords A Selection of Properties Recently Leased Quote Calendar of Events
Dear Landlord,
Team Member of the Month
Alex Ottewell
Alex is an experienced Property
Manager and an active team
member or our Rental Division.
Alex retains a wealth of knowledge
and experience with end to end
management of residential
investment properties. Alex looks
forward to connecting with all
clients and welcomes contact via
telephone: 07 3510 5222 or email
Who are the people in our Property Management Division?
As part of RE/MAX Profile Real
Estate's commitment to supporting
local charities and organisations,
we invite you to join us in a night of
celebration as we raise funds for
Make-A-Wish® Australia, a charity
that grants the wishes of children
with life-threatening medical
conditions to enrich them with
hope , s t reng th a nd j oy .
Enjoy an evening of wonderful
food, wine, live entertainment and
a touch of magic! Guests will also
have the chance to purchase an
assortment of fantastic items
through our live and silent auctions
held through the night with all
proceeds going to Make-A-Wish
Australia.
Your Property Management
Team,
Christina, Helen, Alex, Kobe,
Katrina, Anita and Verna
www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants
How long will it take for your property to rent?
That of course depends on the time of the year so here are the latest statistics for May.
BRISBANE STATISTICS The Market
Source: rentfind.com.au
Brisbane, QLD May 2016 Annual Change
Median Weekly Rent - House $420 0.0%
Median Weekly Rent - Unit/Apartment $385 1.3% increase
Days on Market (Avg) 32.8 3.1 increase
Days Vacant (Avg) 20.4 2.4 increase
significant difficulties in finding new
Tenants at all, let alone making sure
they are good Tenants.
The Queensland rental market
especially is struggling in certain
areas, due to the long awaited
collapse of the Mining Industry and
subsequent disappearance of rental
demand in some areas.
The second common vacancy issue
can be less catastrophic – but still
financially painful – being a
significant oversupply of rental
properties in the area. With interest
rates at historic lows, Property
Developers have been very busy
building an abundance of new
apartments of which many investors
have been buying; so there are
many more properties on the rental
market than usual.
Whatever the reason for your
Finding Tenants in a High
Vacancy Marketplace
When you have your investment
property coming up for lease –
perhaps those long term Tenants
you have had for years finally
decided to move on – your first
priorities are to find new Tenants to
take over as soon as possible; and
make sure they are good Tenants
not likely to cause any problems.
The unfortunate reality for some
Landlords (depending on your local
rental market) is that there can be
vacancy problems, there are a
number of ways to help minimize
vacancy time for your investment,
and in doing so reduce the loss of
rental income. These can help save
you from having to front up even
more funds to support your
investment property. Please see our
quick tips below:
Keep your Tenants if at all
possible – In high vacancy markets,
keeping your Tenants is often the
best way to nullify any losses of rent
before it begins. Some ways to
encourage this is first NOT raising
rents when not warranted, keeping
www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants
stressful financially, and following
the above tips can go a long way to
helping minimize the loss of rental
income. You are after all, not doing
this to finance the Banks, you are
looking to create wealth by investing
for your future!
Source: Travis Henke, Real Estate
Dynamics, 2016 the property well maintained, as well
as keeping a friendly relationship
with your Tenants. If your Tenants
decide to move out of the area, or
need a larger home; there is not
much you can do. However, if they
are just thinking of moving to save a
little rent money, or because they
like the look of another property that
is at a similar rent; convincing them
to stay may still be possible, and if
you can pull it off it will likely save
you money in the long run!
Get ahead of the game – make
sure that your Property Manager is
diligent with their lease renewals –
the earlier you know about a Tenant
vacating, and allowing you to start
looking for new Tenants, the better.
Make sure there is an effective
contingency in place should your
Tenants not respond to the offer of
lease renewal; the last thing you
need is to receive minimal notice
that they are vacating, and be left
with a vacant property and having to
pay the entire mortgage yourself!
Listen to your Property Manager –
If you are getting feedback that
Tenants are not interested in your
property, and you are not getting
Applications – there is a good
chance that your Property Manager
is going to ask you to drop the price.
You are after all paying your
Proper ty Manager for their
professional advice; make sure you
consider their advice seriously,
rather than c linging to the
understandably popular idea of not
wanting to drop the rent. Dismissing
their advice out of hand can often be
a costly decision – getting $10-$20
less per week will cost you a lot less
than getting no rent at all!
Keeping the property well
maintained – Already mentioned in
our first point in keeping existing
Tenants, this can also help in
convincing prospective Tenants to
apply for the property. When
Tenants are choosing between 10 or
more properties to inspect, even the
little things can make a big
difference, to make your property
their preferred option.
Considering Pets – The word ‘pets’
is sometimes looked upon as a ‘dirty
word’ with Landlords, often seeing
Tenants with pets as a higher risk,
with little reward. However, when
good Tenants are at a premium,
being more open to allowing pets
can help attract more interest in your
property, and help find yourself a
good Tenant sooner. You will still
want to have your Property Manager
conduct the appropriate checks on
their Application, as well as having
the appropriate lease conditions in
place to cover pets – however it can
often be worth your while financially.
Having a vacant property is often
Tips for Investors to Prepare
for EOFY
With the end of Financial Year fast
approaching, it’s important to think
about maximising the most out of
your investment property.
Some strategies need to be put in
place prior to 30 June. 5 areas that
may assist you to get the most out of
your investment whilst ensuring you
comply with the ATO rules are
below.
1. Interest expense
The interest on borrowings is tax
deductible provided that the
investment property is
available for rent that is,
advertised on the market as
a rental property.
The deduction is only available
to the extent that the
borrowed monies are used
www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants
for income produc ing
purposes. For e.g. if a loan
was used partly to purchase
an investment property and
partly to purchase a car
used privately, then an
apportionment of interest is
required.
You can prepay up to 12 months
of interest on a loan and
claim a deduction of the
prepayment in the 2016
f i n a n c i a l ye a r . T h i s
effectively brings forward a
tax deduction from the 2017
financial year into the 2016
financial year.
2. Depreciation
If the investment property was
constructed less than 25
years ago, there would be
some capital write-offs on
the original construction
costs available.
This is also the case if there
have been substant ial
capital renovations on the
property.
In addition, depreciation on
items such as dishwashers,
hot water units, ovens,
c o o k t o p s a n d a i r -
conditioning may also be
available.
It may be worthwhile to contact a
Qualified Quantity Surveyor
to prepare a Depreciation
Report. The cost of prepar-
ing the report is also tax
deductible.
If the investment property is a
newly constructed property,
obtaining a Depreciation
Report would be highly
recommended.
3.Repairs vs replacements vs
capital improvements
This is an area which can cause
the m os t am ount o f
confusion for taxpayers and
is an area that is targeted by
the ATO.
A repair is tax deductible in full if
the repair relates to fixing
items back into its original
condition. For e.g. fixing a
few fence palings that have
rotten.
A replacement is typically not
deductible in full, but
deductible over time in the
form of depreciation or
capital write-off. For e.g.
replacing a broken down
dishwasher with a new one.
A capital improvement is not
deductible in full, but subject
to a small capital write-off
and also forms part of the
cost base of the property.
For e.g. removing a timber
fence and installing a new
Colorbond®fence.
4. Holiday homes
These investment properties
typically have some private
usage involved. If the
property is used privately
and not available in the
holiday let pool, the holding
expenses such as interest,
rates and water should be
apportioned on number of
days used privately and not
available for rent.
It is prudent to keep a log or
diary of the private usage
and provide this to your
accountant.
5. Traveling costs
Traveling costs incurred to
inspect an investment
property are tax deductible
to the extent that the
purpose of the trip was
www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants
solely to inspect the
property. Where there are
private components of a trip,
t h e s e n e e d t o b e
apportioned appropriately.
Keeping good records and a
travel diary would help
substantiate any claims.
Remember to keep good records of
all expenditure items and to seek the
appropriate advice from a qualified
tax professional.
Important disclaimer: This article is
provided for general information only. No
person should rely of the contents of this
article without first obtaining advice form
a qualified professional person. Hallahan
& Co is not responsible for the results of
any actions taken on the basis of
information in this article, nor for any
error in or omission from this article.
Source: Karl Karajkov is a senior
manager at Hallahan & Co Chartered
A c c o u n t a n t s . C o n t a c t
[email protected] or call (07) 3392
4900
13 June Queen’s Birthday Public Holiday 15th June Mid Month Accounting 1st July End of Month Accounting
A Selection of Properties Recently Leased
Sinnamon Park House $1,350p.w.
5 bed, 4 bath 2 car accommodation
Quote
“Strive not to be a success, but rather to be of value”.
—Albert Einstein
Jindalee House $495p.w.
4 bed, 2 bath, 2 car accommodation
RE/MAX Profile Real Estate 141 Boundary Road TEL 07 3510 5221 FAX 07 3876 5544
www.profilerealestate.com.au Bardon QLD 4065 Helen [email protected]
www.propertyrentalsbrisbane.com PO Box 388, Paddington, 4064 Alex [email protected]
Kobe [email protected]
Errors & Omissions: These details have been prepared by us on information we have obtained and while we trust it to be correct, is not guaranteed by us and you should rely on your own enquiries.
Indooroopilly Apartment $585 p.w.
3 bed, 2 bath, 1 car accommodation
Calendar of Events