Landlords' Newsletter May 2013

In this edition: How long will it take for your prop-erty to rent? Property Investors Save $$$ By Scrapping… How To End a Tenancy – Notice Pe-riods in QLD Rental Property Save $$$ Going Green And Keep Your Home Snug From Winter Winds

May 2013

Dollars in Your Pocket… But Where Are You Going to Go? A Selection of Properties Recently Leased Quote Calendar of Events

Wow -May already and head-

ing towards winter... the months

just seem to fly by but guess

that's a positive sign that we're

so busy at work that entire sea-

sons whiz past the window!

This week, we're delighted

to welcome Tania Christian to

our ever-expanding property

management team.

Helen continues to lead the de-

partment and will remain your

point of contact unless other-

wise notified. Frankly, the rent-

al market is not flying at the mo-

ment so more than ever renting

properties comes down to the

crucial combined factors of:

price war and beauty contest.

If your property is up for rent or

will be soon please consider

your price and presentation

carefully as the average time to

rent a property in Brisbane has

pushed out to a month now.

Floorplans and professional

photos are becoming the norm

and worth your consideration if

you don't have them already.

I hope you are enjoying the

beautiful weather as we are.

Glorious sunshine and gor-

geous autumn foliage makes it

so much lovelier to be in out

and out of houses at this time of

year.

Thanks for your continued sup-

port .

Wishing you health, wealth and

happiness,

Christina

Price war and beauty contest for rental properties...

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 March.

BRISBANE STATISTICS The Market

Source: rentfind.com.au

Brisbane, QLD March 2013 Annual Change

Median Weekly Rent - House $395 0.0% change

Median Weekly Rent - Unit/Apartment

$380 2.7% increase

Days on Market (Avg) 30.3 4.2 decrease

Days Vacant (Avg) 19.0 4.2 decrease

Property Investors Save $$$

By Scrapping…

Scrapping is the removal and dis-

posal of any potentially deprecia-

ble assets from an investment

property.

In other words, the demolition of

any existing structure or fixture

onsite that would have been eligi-

ble to claim deductions for depre-

ciation (Division 40) or building

write off allowance (Division 43).

When renovating, there are sig-

nificant tax advantages that can

be generated over and above.

Prior to demolition or renovation,

many investment property own-

ers remain unaware that the old

assets within their property can

be worth thousands of dollars.

When these old assets (like car-

pet and hot water systems) are

replaced or ‘scrapped’, owners

may be entitled to claim them as

a tax deduction.

How does an investor benefit

from scrapping?

Scrapping of existing structures

onsite is a very effective method

of obtaining tax deductions. Ad-

ditional tax credits are available

for investors who demolish or

dispose of existing buildings or

assets that produced income. In

the year the item is scrapped, the

written down value (WDV) can

be written off as a tax deduction.


To calculate the scrapping value,

a Quantity Surveyor will identify

the items removed in the renova-

tion process.

Case Study

Jim purchased a sixty-year-old,

three-bedroom townhouse in

Paddington. In its pre-renovation

condition, the house contained

carpet, vinyl, blinds, an air condi-

tioner, old stove, hot water ser-

vice and light fittings.

When Jim learned about the po-

tential depreciation deductions

available in old, pre-renovated

properties, he decided to contact

BMT Tax Depreciation to enquire

about a depreciation schedule

including all the items which were

to be scrapped prior to starting

any work on the property.

BMT visited the site and conduct-

ed a full site inspection, taking

note of all of the items that could

be written off before they were

thrown out.

The following deductions were

obtained:

Jim then took the BMT Tax Depreciation Schedule to his Accountant

and claimed $6,270 in depreciation deductions that year in his personal

tax return. Over the following twelve months, Jim completed his reno-

vations, including an extension at the rear of the property. He again

contacted BMT Tax Depreciation to come and assess the renovated

property to achieve the maximum depreciation deductions. BMT Tax

Depreciation were able to complete a second depreciation schedule for

Jim, taking into consideration all new additions (stainless steel oven,

cook top and range hood, new carpet, air conditioning unit, etc) as well

as calculating the construction write-off allowance now available on the

extension.

Both Jim and his Accountant were impressed with the total depreciation

claim on the scrapped assets and renovated property of $16,000 in the

first year alone.

How is scrapping calculated?

The first depreciation schedule prepared by BMT Tax Depreciation is

undertaken prior to any renovation or refurbishment. BMT Tax Depreci-

ation prepares a depreciation schedule identifying the value of all plant

and equipment and qualifying capital expenditure contained within the

property.

A second schedule is then prepared by BMT Tax Depreciation after

completion of the renovation, identifying the value of all new plant and

equipment and capital expenditure within the property. The assets with-

in the building that are no longer present can be written off immediate-

ly. Scrapping is a complicated process that requires the expertise of a

specialist Quantity Surveyor such as BMT Tax Depreciation, in con-

junction with an Accountant.


Why scrap items?

There are several reasons why

an item may be scrapped that

generally fall under the heading

‘not fit for purpose’. They include;

Obsolescence;

Functionally inadequate;

Dated style;

Original form was inappro-

priate or does not maximise the

form and function of the property;

or

Additional value to the own-

er is obtained from a renovation.

A valuation of all items in a prop-

erty, as well as adequate photo-

graphic records, is required in

case of an audit by the Australian

Taxation Office.

The concepts outlined above can

provide the property investor with

a very attractive tool to maximise

the tax benefits available from

the refurbishment of an existing

building, both immediately and in

continued ownership. Substantial

deductions can be achieved

when the correct decisions are

made at purchase and during the

renovation process.

Either a tenant or an agent can

give notice to end a tenancy;

however certain rules and time-

lines must be adhered to.

A fixed term agreement means

that the tenant or resident will

stay until the end date and has

committed to pay rent until that

point. If either party wants to end

the agreement early they may

have to pay compensation and/or

remaining rent.

The minimum notice period a ten-

ant needs to give the lessor/

agent if they want to move out

when giving a Notice of intention

to leave (Form 13) is:

14 days or the end of the

tenancy (whichever is later)

without grounds under a

fixed term agreement

14 days without grounds

(no reason) under a period-

ic agreement

7 days for an unremedied

breach


breach for non-payment of

rent in a caravan park

7 days for non-compliance

with a Queensland Civil

BMT Tax Depreciation provide an

Australia-wide service on all

property types and are vastly ex-

perienced in identifying deduc-

tions for investment properties

prior to demolition and after they

have been re-built. Call the office

on 1300 728 726 for obligation-

free advice on your property sce-

nario.

Article Provided by BMT Tax Depre-

ciation.

Bradley Beer (B. Con. Mgt, AAIQS,

MRICS) is the Managing Director of

BMT Tax Depreciation.

Please contact 1300 728 726 or vis-

it www.bmtqs.com.au for an Austral-

ia wide service.

How To End a Tenancy –

Notice Periods in QLD Rent-

al Property

Tenancy law in Queensland re-

quires certain reasons and time

periods to be provided to end a

tenancy by either the tenant or

the lessor/agent. Following is an

outline of the required reasons

and notice periods. All notices

must be in writing.

Notice periods for ending a

tenancy

http://www.bmtqs.com.au/


the same day for non-

liveability

2 months for compulsory

acquisition

4 weeks for a sale contract

signed when the tenants

are on a periodic agree-

ment only

Mutual agreement (where

both parties agree on a cer-

tain date to end the tenan-

cy)

April 2013 This information has been

sourced from the RTA

www.rta.qld.gov.au with minor edit-

ing carried out by

www.realestateexcellence.com.au

Our agency is a member office of

Real Estate Excellence

and Administrative Tribunal

(QCAT) order

the same day for non-

livability

14 days for compulsory ac-

quisition

If the tenant doesn't give the cor-

rect amount of notice and use the

correct form, they may be subject

to a claim for compensation from

the lessor/agent.

The minimum notice period a les-

sor/agent must give a tenant if

they want them to leave when

giving a Notice to leave (Form

12) is:

2 months without grounds

(no reason) under a period-

ic agreement

2 months or the end of the

term (whichever is later)

without grounds under a

fixed term agreement

(cannot be earlier than the

end date of the agreement)

7 days for unremedied rent

arrears


breach

7 days for non-compliance

with a Queensland Civil

and Administrative Tribunal

(QCAT) order

rug ourselves up in warm protec-

tive clothing to beat the cold

when venturing outside, we can

wrap our homes with green

‘windcheaters’ to ward off the

chill.

Possibly the most effective way

to deflect winter winds is to plant

a barrier along the side of the

house where they are most prev-

alent. A hedge or a row of ever-

greens such as Yew or Box; or if

you prefer natives, try Wattle,

Banksia or Bottlebrushes.

An added bonus of the living

windbreak is that it will also pro-

vide protection for the garden

and warm spots for you to sit on

a sunny winter day. As a short-

term solution, erect a trellis or

bamboo screen in the garden so

that it breaks the flow of wind into

your house.

There are also things you can do

inside the house to deflect the

chilly winds of winter. If external

doors open directly into an open

room such as the living room, try

placing a barrier such as a book-

case or screen just inside the en-

trance. Again, plants will absorb

the flow and ‘mute’ it before it

reaches into the room. f your

Save $$$ Going Green And

Keep Your Home Snug From

Winter Winds

Winter is nearly here and will

soon be making its presence felt

with colder days and chilly

winds.

Do you find that no matter how

well you heat your house, an icy

blast blows in every time some-

one opens a door? Just as we


trees and shrubs that have low

crowns. If snow tends to drift in

your area, plant low shrubs on

the windward side of your wind-

break. The shrubs will trap snow

before it blows next to your

home.

In addition to more distant wind-

breaks, planting shrubs, bushes,

and vines next to your house cre-

ates dead air spaces that insulate

your home in both winter and

summer. When planting, leave at

least 30 centimetres of space be-

tween full-grown plants and the

nearest wall.

Source : Quartile Property Network

(25 April 2013)

builder hands are stronger than

your green thumbs, you may con-

sider putting up walls around a

patio making it a porch, creating

a windbreak for the front or back

door. Using fibreglass or strong

structural glass can insulate the

area while still letting the light in.

Even running a simple wooden

screen a few metres from the

house will form a windbreak in

areas that are most exposed and

affected by the wind.

Basically, any type of windbreak

will work to lower the wind chill

near your home, which occurs

when wind speed lowers the out-

side temperature. For example, if

the outside temperature is -12°C

and the wind speed is 32 kilome-

tres per hour, the wind chill is -

31°C. A windbreak will reduce

wind speed for a distance of as

much as 30 times the wind-

break's height.

For maximum protection, plant

your windbreak at a distance

from your home of two to five

times the mature height of the

trees, so if there’s ever any high

winds strong enough to uproot

them, you have a buffer zone.

The best windbreaks block wind

close to the ground by using

One way to get around the prob-

lem is to rent your home back

from the buyers for the interim

period, though this will only suit if

they are not ready to move into

the house themselves.

It can also be costly if you have

to pay rent equal to the buyer's

per diem cost of owning your

home (principal, interest, taxes

and insurance). If you've owned

your home for a long time, your

mortgage amount could quite low

in comparison to the buyer's

mortgage, and your property tax-

es and insurance premium could

also be lower.

If this is the case, then rather

than pay a high cost to rent back

your home from the buyers, you

may be better off moving to an

interim rental. The cost of renting

will probably be less, particularly

if you're living in an area where

the rental market is soft.

The additional benefit of moving

to an interim rental is that you

won't feel pressured to buy a

home that doesn't suit your long-

term needs.

Source : Quartile Property Network

(28 February 2013)

Dollars in Your Pocket… But

Where Are You Going to

Go?

You’ve sold your house, but

haven’t yet found the one you

want to buy and live in – what are

your options now?

You’re in a great bargaining posi-

tion, because you now know ex-

actly how much equity you have

to work with, but if settlement

dates do not match you may

need to find another place to live

for a while.

3 June Public Holiday 15 May Mid Month Accounting 3 June End of Month Accounting

A Selection of Properties Recently Leased

Spring Hill House $530p.w.

2 bed, 2 bath, 1 car accommodation

Quote

“Do not wait to strike till the iron is hot; but make it hot

by striking.”

-- William B. Sprague

Hawthorne Unit $630 p.w.


RE/MAX Profile Real Estate 141 Boundary Road TEL 07 3510 5221 FAX 07 3876 5544

www.profilerealestate.com.au Bardon QLD 4065 TEL 07 3510 5227 Helen [email protected]

www.propertyrentalsbrisbane.com PO Box 388, Paddington, 4064 Chelsea [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.

Milton Unit $350 p.w.


Calendar of Events

Landlords' Newsletter May 2013

Documents

Transcript of Landlords' Newsletter May 2013