End of Financial Year

The end of financial year has arrived and it’s time to make sure you have all of your documentation in order so you can reap some of the tax time benefits that come with owning an investment property.

As a landlord, you may be able to claim a number of tax deductions for your property. Below is a list of the items that are able to be claimed. However, every property investor will have a different circumstance, and it is vital that you consult your accountant to find out which (if any) apply to you:

1. Mortgage interest – Please note that you can only claim the interest on a loan that is specifically taken out to purchase or renovate the rental property;
2. Council rates and water rates;
3. Any cleaning of the investment property. For instance, professional carpet cleaning after tenants have moved out, prior to new tenants moving in;
4. Any loan establishment fees that you have paid to your bank/lender to set-up the original loan to purchase the property;
5. Any body corporate or strata fees (these are usually applicable for townhouses and units purchased);
6. Any property management fees paid to a real estate agent to manage the property;
7. Any advertising cost paid to get tenants to your investment property;
8. The cost of travelling to inspect, undertake maintenance and repairs or improvements to the investment property;
9. Any repairs made to the property, fixtures or plants, such as bathroom fittings, lighting, stove carpets and blinds, etc.;
10. Any land tax (if applicable);
11. Any insurance for the investment property, including building, contents and landlords insurance policies;
12. Any cost paid for pest control;
13. Maintenance, for instance such as looking after gardens, lawn mowing and pool maintenances;
14. Any replacement of ‘capital’ items, such as dishwashers, bathroom fittings, pool pumps, carpets, stoves and hot water heaters, etc.; and
15. Any stationery items, postage costs, telephone calls and Internet access related to the investment property, collecting rent or undertaking maintenance and improvements (FLR Solutions, 2012).
    
    

A good tip to follow is to pre-pay for expenses before June 30^th; this is so you can claim those expenses as a tax deduction in the 2012 financial year. Engage the help of experts when completing a tax return and ensure that you always keep receipts for all purchases related to your investment property so you can confirm with your accountant whether or not it is claimable.

Preparing properties for digital TV

Between 2010 and 2013, analog free-to-air TV signals are being switched off and

replaced with digital-only signals. If you own or manage a property, you need to check now that it is digital ready to ensure your tenants will be able to receive free-to-air digital TV once the analog signals are switched off in the area. Your tenants will expect you to ensure the property is digital

ready. The sooner you’re prepared the better it will be for your property investment.

To watch digital TV after the switch off, your tenants will need equipment that’s capable

of receiving digital TV—equipment like a set top box (for connecting to an analog TV) or a

TV with a built-in digital tuner. If they have this equipment and can’t receive the free-to-air digital TV channels available in your area, your property’s antenna system may need to be upgraded, or a new external antenna installed.

Upgrading your property’s antenna system

1. Find out who is responsible for the maintenance of the antenna system

If your property is a free-standing house, you may wish to check the tenancy agreement and relevant tenancy legislation in your state or territory to see what it says about adding or altering fixtures. Even if it is not clearly stated in the legislation, it is good practice to arrange any necessary antenna works yourself, using an experienced antenna installer. This will ensure your property is digital ready for current and future tenants, and avoid possible damage caused by a tenant adding or removing their own fixtures.

2. Is your rental property a unit or apartment?

Larger buildings like apartment blocks or groups of townhouses may have shared antenna systems, also known as Master Antenna TV (MATV) systems. While many shared antenna systems are adequate for both analog and digital TV reception, some may need to be upgraded or replaced. In some cases, a shared antenna system may need to be installed for the first time. In a residential building, the owners corporation (or body corporate) is responsible for maintaining and repairing common property, including a shared antenna system. Digital Ready Information Line 1800 20 10 13 Updated: 13 September 2010 Contact your strata or building manager to ensure that, in the first instance, any existing antenna system is inspected by an experienced antenna installer. Upgrades to shared antenna systems can be complex, and getting approval from unit owners may take time.

Start the process early to get your building digital ready well before the analog switch off.

3. Contacting an antenna installer

There are antenna installers who are part of the Australian Government Antenna Installer

Endorsement Scheme. You can find a list of endorsed antenna installers on the digital

ready website. An endorsed antenna installer will be able to advise you on the best way to upgrade your property to ensure good reception of digital TV.

4. Claiming a tax deduction if you buy an antenna

As a property owner, you may be able to claim a tax deduction for part or all of the cost of the purchase or upgrade of antenna equipment for your rental property. To find out whether you are eligible, contact the Australian Taxation Office (ATO), or download the ATO “Rental Properties” guide at www.ato.gov.au/rental. For more information

To find out more about the switch to digital TV and the resources that can help you prepare

your property, visit http://www.digitalready.gov.au/.

Source: http://www.digitalready.gov.au/Content/Documents/PDF/Information-for-landlords-and-property-managers_14.aspx

Growing your investment portfolio

It doesn’t matter if you’re a first time landlord, have one property or 30; if you want to grow your portfolio, now is the time to do it. Here’s why…

A recent survey by property information group RP Data found that house prices have fallen 5.3% over the past 12months. This makes it an ideal time to start or develop your investment portfolio - ‘strike while the irons hot,’ so to speak. Buyers are finding bargains in all kinds of suburbs across South Australia, with vendors getting desperate to sell and properties on the market for lengths of time, it’s the perfect opportunity to snap up a deal.

Property purchasers need to be brave and shun “the herd mentality,” McGrath’s CEO maintains.

“Markets have a herd mentality and following the crowd gives people a much needed sense of security, especially in this time of economic volatility,” he said. “Buyers need to be brave - this is exactly the type of market they will look back on and say, ‘I wish I’d bought in 2012’ ” (McGrath, J, 2012).

With increased pressure on the Reserve Bank of Australia for more rate cuts, property owners will continue to reap the rewards.

It is said that the intended effect of recent policy actions (to cut rates) is certainly not to pump up speculative demand for assets. The rate cuts would benefit mortgage holders by allowing them to pay down their home loan more quickly (news.com.au, 2012). Maintaining that the rate cuts will not help increase property prices, but will assist owners to pay off mortgages quicker and having a tenant in your property will certainly help.

A report from Real Estate Business Online states that “landlords continue to hold the upper hand over tenants with new data showing little movement in already tight residential vacancy rates” - this is great news for landlords across the state! Adelaide’s vacancy rate increased 0.2 per cent to 1.6 per cent, which is relatively small compared to other capital cities across Australia.

“We believe that until the property sales market begins to pick up, we will not see substantial relief for renters, and most capital cities (with Melbourne and Hobart being the exceptions) will remain a landlord’s market for the time being,” said Louis Christopher, Managing Director of SQM Research.

An abundance of properties perfect for rental are on the market right now, so if you are a landlord or thinking about becoming one, don’t wait too long - go out and grab a bargain!   

Grow your investment portfolio!! 4 VERY hot units

3/40 Clark Ave, Glandore http://www.3-40clark.toop.com.au/  Sale price: $290,000-$300,000 Potential rent: $290pw Renovated two bedroom unit, located in a small group of four only and tucked away the rear offering privacy for the occupiers. Comprising polished floors, open plan living with split system air-conditioning , stylish kitchen with stainless steel appliances, gorgeous fully tiled bathroom/laundry, master bedroom with built-in robes and ceiling fan. Front and rear courtyard, carport and so much more. Half way between the city and the sea.

1/44 Gladstone Rd, Mile End http://www.1-44gladstone.toop.com.au/  Sale Price:$290,000, Potential rent:$280-$290pw Walk to the City! This 2 bedroom unit is single storey and in a small group of 5. Ideally located near shopping and transport. Fenced and private front garden complete with a paved area under a pergola. Living area is open plan the kitchen adjacent with access to rear paved area including garden shed. The bathroom has been beautifully renovated and includes laundry facilities. Other features include security shutters and off Street parking.

9/180 Seaview Rd Henley Beach Southhttp://www.9-180seaview.toop.com.au/ Sale price:$250,000 Potential  rent:$240pw If you love the beach side lifestyle then this one is for you. This ground floor unit is in a great corner location and has a fabulous outlook to the pool and surrounding garden. The living area is open plan, the bathroom is generous and incorporates the laundry. There is off street parking and both bedrooms have built-in-robes. Recently upgraded with new hot water service, split system air conditioning unit, new carpet and it has been painted throughout.

2/21 Frederick St, Maylands http://www.2-21frederick.toop.com.au/ Sale price: $320,000-$340,000 Potential rent: $300pw This Ground floor, two bedroom unit with carport is currently tenanted at $300 pw. Just off Magill Road, so shopping on the Parade and transport are close by. Beautiful timber floors are a feature of the open plan living area. Light filled kitchen with modern appliances has a small sunroom adjacent with access to the rear. The bathroom has been tiled to the ceiling and boasts neutral tones.

Contact:
Mandy Doolan
Mobile 0412 337 482
Email mandy.doolan@toop.com.au
Telephone +618 8294 8888
Fax +618 8294 8898

Landlord insurance…YES YOU NEED IT!

Landlord insurance…YES YOU NEED IT!

Whether you have one property or thirty properties it is vitally important that you have landlord insurance from the get go. Landlord insurance policies can provide cover for things that your standard building and contents insurance do not usually cover.

Items that landlord insurance may cover include:

• Malicious or intentional damage to the property by the tenant or their guests
• Theft by the tenant or their guests
• Loss of rent if the tenant defaults on their payments
• Liability, including for a claim against you by the tenant, and
• Legal expenses incurred in taking action against a tenant.

It is never intentional to select a tenant who doesn’t take care of your property or won’t pay rent for what ever circumstance. However covering yourself in case a situation does arise will benefit you in the long run. There is comfort in having a protection on your property should anything happen with the tenant.

“A survey conducted by Woolcott Research of 300 landlords showed that two out of five self-managing landlords interviewed had experienced tenants defaulting on rent or damaging their property. That's why it's important to take out landlord-specific insurance.” (G Bullock)

“Leanne Stagnitta, national home products manager with NRMA Insurance, says that according to the Woolcott study, less than half of all self-managing landlords have specific landlord insurance, even though three out of five recognise a bond is not sufficient to cover most incidents with tenants. "These landlords are trying to save costs on agent fees and insurance, but in the process they are putting their valuable assets at risk," says Stagnitta.

There are a range of companies that provide landlord insurance, not every policy is the same so ensure to find out exactly what they cover for your particular situation and do some research to find the best price. Two of the bigger landlord insurance companies in South Australia are Terri Scheer and Property Insurance Plus.

Other research has found that landlords who used real estate agents to manage their relationship with tenants were likely to face fewer problems than those who self managed. This was due to not having the expertise or procedures in place that a typical real estate company would use such as having rental agreements, thorough screening of applicants including rental histories and performing regular inspections of the property.

So essentially if you are serious about protecting your most important asset ensure you have landlord insurance or go the step further and use a property Management Company to cover all bases before you start.

Sleek & stylish unit in superb location

Under Instructions from Public Trustee

This is the front unit in a small group of 3 and features 2 bedrooms (the main with a large built in robe), up to date white kitchen with adjacent meals, sitting room, combined bathroom and laundry plus an undercover carport. All the hard work has been done with gleaming polished floorboards and crisp white paint work.

Superbly located near the beach, great shopping and transport, this would make a great first home or excellent investment property. With a potential rent of $300.00 to $310.00 per week,  An exciting opportunity awaits!

1/19 Melton Street Somerton Park $295,000 

Nicole Neill Mobile 0413 879 889
Email nicole.neill@toop.com.au
Telephone +618 8362 8888
Fax +618 8362 8898