re/max profile landlords' newsletter june 2016

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

[email protected]

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


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


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


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

mailto:[email protected]

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

re/max profile landlords' newsletter june 2016

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