re/max profile landlords' newsletter april 2015

In this edition: How long will it take for your property to rent? Legal impediments and rental property Invest for Your Child’s Future!

April 2015

Save on All the Hard Work— Declutter or Furnish with Photography! A Selection of Properties Recently Leased Quote Calendar of Events

Dear Landlord,

We are in pre Easter world here at

RE/MAX Profile after our office has been

overwhelmed with colouring-in entries from

our local Rainworth Primary school. What

a wonderful community we live in here at

Bardon. If you have a chance over the

Easter break and live locally you should

pop past our office to see the wonderful

artwork. I am very grateful for the

generous efforts of Grant & Christina our

principals who have given hundreds of

chocolate eggs to all entrants with the

winner receiving a 10kg block of

chocolate.

This week and next are short weeks and

we remind you that our office is closed

from Good Friday to Easter Monday

reopening on Tuesday 7th April. Over the

break should you have any queries or

emergencies please contact me on my

details below. I will be checking my emails

over the break but would like to give the

Easter holidays and our latest rental updates

other Property Managers in our team a

well deserved break with their families.

I have had several discussions with

Landlords since I last wrote to you

regarding the current rental market.

January to March is dominant months for

re-letting. Until this year. We have record

low interest rates and for the first time a lot

of stock with less 'good' tenants

looking. What does this mean to

you? Look after your good tenants.

Secure long term leases, at least 12

months recommended with a 6 month

prenegotiated increase and be competitive

with your rental price should you have a

vacating tenant or current vacant

property. It's often better to reduce $10

per week rather than keep vacant in most

cases. To compensate the market change

this year, we have opened up our

inspection times to include early mornings

and evening appointments view

prospective tenant viewing. This is proving

to be popular and ensuring our owners

properties are moved quickly with minimal

vacancy.

Many new to investing may not realise all

the benefits you can claim especially

with June 30 fast approaching. If you

"Have a home loan? 5 minutes could save

you 5 years in repayments. Call Josh now

on 0432 989 866 for your free home loan

health check."

Happy Easter to all of you. May the

Easter bunny find you. Stay safe if you

are going away. Disbursement dates for

April are 15/4 and 1/5.

Best Regards,

Belinda Johnston

General Manager—Property Management

[email protected]

0429 544 159

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

Legal impediments and

rental property

All rooms, gardens sheds or

decks etc. should be approved by

the appropriate authorities.

For example the Building Code of

Queensland states the following;

A garage is classified in the BCA

(Building Code of Australia) as

(1) The lessor must ensure

t h e r e i s n o l e g a l

impediment to occupation

of the premises by the

tenant as a residence for

the term of the tenancy.

(2) Subsection (1) applies only

to legal impediments the

lessor knew about, or ought

reasonably to have known

about, when entering into

the agreement.

Source:

realestateexcellence.com.au

non-inhabitable building. To use

or convert a garage to a

habitable room, building approval

is required and will have to

comply with the standards

outlined in the BCA Volume 2.

For e.g. a minimum room height

is 2.4m for a habitable room.

This also extends of course to all

facets of the property having

appropriate approvals and if

app l i cab le loca l counc i l

registration and approval.

The RTRA Act (Qld) sets out that

the lessor must ensure that there

is no legal impediment to the

property.

181 Legal impediments to

occupation as residence

Brisbane, QLD March 2015 Annual Change

Median Weekly Rent - House $ 420 1.2% increase

Median Weekly Rent - Unit/Apartment $ 390 0%

Days on Market (Avg) 29.5 2.9% increase

Days Vacant (Avg) 16.8 1.9% increase


Invest for Your Child’s

Future!

How property depreciation

claims can help your family

now and later…

People choose to invest in

property for a number of different

reasons. Owning bricks and

mortar has always been a dream

that most Australian’s aspire to.

But as property prices continue to

rise and the market grows

increasingly harder for today’s

younger generation to get their

foot onto the ladder, many

parents may be thinking of

investing in property now with the

idea that their purchase will be an

asset for their child’s future.

What many investors remain

unaware of when purchasing an

investment property are the

benefits of claiming depreciation.

According to the Managing

D i r e c t o r o f B M T T a x

Depreciation, Bradley Beer, 80%

of investors still fail to claim the

m a x i m u m d e p r e c i a t i o n

entitlements available to them.

it? The Australian Taxation Office

(ATO) allows the owner of any

income producing property to

claim depreciation due to the

wear and tear of a building

structure and the plant and

equipment assets contained

within the property over time.

All investment property owners

can claim depreciation, however

higher depreciation deductions

are usually available on newer

properties. Owners of new

properties are eligible to claim

the full deduction on the entire

cost of the building structure over

forty years, while the owners of

properties which are not brand

new can claim the remaining

years.

The ATO does prov ide

restrictions when it comes to

claiming capital works deductions

based on a p r oper t y ’ s

construction date, so it is

important to check with a

specialist Quantity Surveyor what

deductions will apply. But even if

a p r o p e r t y c o m m e n c e d

construction prior to the ATO

legislated date of the 15th of

In a recent study of the

deductions property investors

claimed in the 2011-2012 income

year, BMT found that the average

capital works claim of $2,029 and

$1,139 for plant and equipment

depreciation made (a total

average claim of $3,168) was

well below the typical claim BMT

found for residential investors

who request a BMT Tax

Depreciation Schedule.

“Data collected from tens and

thousands o f BMT Tax

D e p r e c i a t i o n S c h e d u l e s

s u g g es t e d t h e av e r a g e

depreciation claim should be

around $10,100 in the first full

financial year and $7,350 per

year on average over the first ten

years of owning a property,” said

Brad.

It’s these sorts of figures which

show just how worthwhile it can

be for investors of any income

producing property to enquire

a b o u t t h e d e p r e c i a t i o n

deductions for their investment

property.

So what is depreciation, and how

do investor’s go about claiming


over time and investors can only choose one method. If the parents are

purchasing a property with the idea they will sell it when their child is

older, they may want to choose the diminishing value method which

claims depreciation of assets over a shorter time. Parent’s investing in

property who wish to hold onto it as more of a longer term investment

and who might prefer to receive more constant deductions over time,

may on the other hand choose the prime cost method of depreciation.

Discussing which depreciation method applies to an individual

investment strategy with an Accountant is also recommended.

Case study

Janet and Warren purchased a new $500,000 apartment one year ago

and planned to rent the property for fifteen years as an investment for

their children’s future.

They rented the property for $490 per week and received a total

income of $25,480 per annum. Expenses for their property including

interest, rates, property management fees, repairs and maintenance

costs totalled to $30,838.

Towards the end of the first year of owning the property, Janet and

Warren’s annual after tax outlay amounted to $3,376 or $65 per week.

After hearing about the depreciation benefits available from their

investment property, Warren contacted BMT Tax Depreciation and

found out that he could claim $14,800 in depreciation in the first year

claim alone. Below is a summary showing the cash flow both before

and after depreciation was claimed.

September 1987, these buildings

will often have been updated

over time. Any structural

renovations completed, even

those completed by a previous

owner of a property may also be

depreciable for the owner.

When it comes to depreciating

assets, there are no date

restrictions. It is the condition and

quality of each item which

contributes to the depreciable

amount. On average 15% of the

total construction cost of a

residential property is made up of

plant and equipment items such

as carpet, hot water systems,

blinds, garbage bins, mechanical

exhausts and door closers.

It is also important for parents

thinking of investing in property

for their child’s future to note that

when a specialist Quantity

Surveyor applies depreciation to

assets, there are two alternative

methods which can be applied.

These are the diminishing value

and the prime cost methods of

depreciation.

Each method claims the

depreciation of assets differently


By taking advantage of tax depreciation and making a depreciation

claim, Janet and Warren were able to turn their loss into an income of

$40 per week or $2,100 within the first year of holding the property

alone.

The above scenario can work on any type of investment property, be it

a new or old apartment or a new or old house. The below table outlines

some of the real deductions BMT Tax Depreciation has found for their

clients:

For more information about claiming depreciation on an investment

property, investor’s can contact BMT Tax Depreciation and speak with

one of their friendly staff on 1300 728 726.

Article provided by BMT Tax Depreciation.

Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Managing Director of BMT

Tax Depreciation.

Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia wide

service.

Save on All the Hard

Work— Declutter or

Furnish with

Photography!

It’s now possible to declutter and

refurnish a property on the

market, thanks to developments

in photography.

W i t h m o s t p r o s p e c t i v e

purchasers and tenants turning

to the internet for initial searches

real estate photographers are

now offering a range of difference

services, including altering

images for specific times of day,

aer ia l shots, 360-degree

photographs and video tours.

The newest edition to the

technology means you can

remove mess and furniture to

dec lu t t e r t he ho m e o r

alternatively, add virtual furniture

into an empty property, giving

purchasers or renters the vision

of a home, rather than an empty

room.

Source: REINSW Journal, March

2015

3rd April Good Friday-Office Close 4th April Black Saturday-Office Close 6th April Easter Monday-Office Close 15th April Mid Month Accounting 25th April ANZAC Day-Office Close 1st May End of Month Accounting

A Selection of Properties Recently Leased

Moggill House $1,200 p.w.

5 bed, 3 bath, 7 car accommodation

Quote

“Perfection is not attainable, but if we chase perfection we can catch

excellence”.

—Vince Lombardi

Sinnamon Park House $750 p.w.


RE/MAX Profile Real Estate 141 Boundary Road TEL 07 3510 5222 FAX 07 3876 5544

www.profilerealestate.com.au Bardon QLD 4065 Belinda [email protected]

www.propertyrentalsbrisbane.com PO Box 388, Paddington, 4064 Helen [email protected]

Lisa [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.

South Brisbane Apartment $480 p.w.


Calendar of Events

re/max profile landlords' newsletter april 2015

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