[haddo59Member@haddo59Join Date: 2003Post Count: 6]

April 17, 2007 - 4:34 am

As L.A. Aussie said Landlord insurance is a must. You don't know if  a pipe is going to burst or the tennants damage the place because the RE agent isn't sitting in front of your place all day very day.
I originally went with a broker my work used, but not being able to contact them when renewal time came around made me try Terri Scheer. TS policy seemed good & is one of a couple suggested by RE agents.  Because I was in a hurry to get cover I went with them & did an analysis later. I spoke to a broker associated with one of my managing agents & finished up with CGU and ahve since t/f all of my properties to them & they have arranged a common expiry date under the one policy. Including the building insurance I'm about 10%-15% better off price wise & have broader & better cover (for my properies, but this may not apply to you.) The broker has been great & always returns calls & emails promptly.
Contact some brokers to see what they can advise & compare what you are offered.
Haddo

[haddo59Member@haddo59Join Date: 2003Post Count: 6]

March 10, 2007 - 7:33 am

I suppose I should have mentioned that BASIX is the Building Sustainability Index used in NSW to ensure the property is environmentally friendly & dosen’t create excessive greenhouse gases by using less energy or use too many resources.

Thankx
David

[haddo59Member@haddo59Join Date: 2003Post Count: 6]

February 4, 2006 - 3:32 pm

Hi Giddo,

I haven’t been in the commercial acctg world for a few years now & never been a public acct but your posting raises a few questions & hopefully I can give some useful suggestions. They’re only rough because I’m going from memory & haven’t looked up any references so don’t take them all as 100% gospel.

You won’t get any CGT discount because the house is owned by the coy & coys don’t get any CGT benefits unless it is on the sale of the company & it’s assets upon retirement & they are rolled over into another business or super’n investment. If you try to sell the house to yourself the ATO may dig to make sure it’s an arms length commercial transaction (don’t forget legal & stamp duty either). A valuation with a low result would be helpful & I’m sure a valuer would help without doing anything to get the ATO offside.

Dividends to reduce the net result to $0 for the year of sale may be worth looking at if you want to sell to yourself. Don’t forget the GCT action is the contract date, not settlement date.

I’m also curious about the charging of GST on a residential property. My understanding is that residential rentals don’t have GST applied even though the landlord is a company, it’s classified as being input taxed (unless it’s a short term accommodation such as hotel; a caravan park or similar). This will restrict the GST ITC’s the company can claim. Commercial rentals on the other hand do have GST applied so it would be worth investigating this with your accountant further.

All non-capital expenses incl GST are claimable by the coy in it’s tax return if ITC’s can’t be claimed. It may be possible, not very likely though, for the coy to make an adjustment claim for the overpaid GST but that will depend on whether it has been identified as GST on the tax invoices/receipts issued as well as a few other things.

You may be able to claim home office deductions in your tax return – another question for your accountant. It will depend on whether the coy provides office space and whether you are merely using home for convenience, the amount of work carried out, how the office is set up, whether the coy pays any of the outgoings, etc. The estimate can be floor space ratio or number of rooms for the rent & either of these or some other method that’s reasonable for other outgoings.

Don’t forget with the FBT option that it is charged at 48.5% so for example if the rent is $10k p.a you will be paying about the same amount in FBT, a total cost of approx 20k to the coy (pre-tax). Again get your acct to check out the best option. The coy tax rate is 30% & the top personal marginal rate (>95k) 48.5% incl m/c.

Your acct is going to be your best source of info but if you’re not confident in their ability change to somebody else just like you’d change banks or mechanics.

Cheerz

[haddo59Member@haddo59Join Date: 2003Post Count: 6]

January 20, 2006 - 1:10 pm

I’d like to think it’s a mathematical error because they’d have too much to lose by ripping you off for such a small but noticable amount. Ask them to provide details of their calcs to explain how they arrived at their result. Remember that barging in like a bull at a gate may make things difficult further down the track & a good working relationship with your PM is important.

Methematically, if they are working on 4 weeks per month: $260 x 4wks x 12 mths = $12,480 gross. The difference is the missing 4 wks @ $260 = $1,040. If ths is presumed to be the management fee their rate is 8.33%. As this is an odd rate the $1,040 may include statement fees, etc.

[haddo59Member@haddo59Join Date: 2003Post Count: 6]

January 18, 2006 - 1:16 pm

Originally posted by widemouthfrog:

Hi guys,

I have done a lot of book reading over the last six months nad just stumbled on to Steve Mcknight and his two books in the last couple of weeks. In addition I have started to surround my self with people who are interested inproperty investmnet to try and educate myself.

On flicking through these forums I have sought the answer to my current set of questions.

I have found a property with two buildings on it that needs some work, but I think that if I buy it that it will be CF +.

However it would take some time to do the work to get it into a position that a tenant would live in it.

The figures are:
Purchase price $100K. Both properties are relocated homes with some works undertaken since moving.

Building 1 (16squares) needs a front veranda/steps, an internal paint, some kitchen work, bathroom tiled, stormwater “done” and removal of the septic tank.

Rent could be $140/wk with bathroom and stormwater.

Property 2 (may be 5-6 Squares) requires ceiling repaired throughout (roof is new), some weatherboards replaced
House. House is 4 room building and 1 room needs to be completly converted into kitchen/laundry/bathroom

Rent could be $100/wk

As I am new to this dance, I dont have anybody who knows the steps in practice. What I want to know is, I have the money (I think) to purchase but not to repair/ renovate.

In addition, repairs/ renovations and tenating is going to take more than a couple of days.

How do I get all this doneand get the CF coming through the door on day 1.

Is it possible to buy but let the bank finance cover Property 1 and land with building 2 “thrown in” and then borrow against building 2 to finance the deal.

What about lag time between works commencing and rent coming in. How could I fund that?

Also, how do I get a tradesman to go and look at a property that I am trying to purchase (ie hasnt he got better things to do than quote jobs that may never happen?)

I look forward to your replies.

Wide Mouth Frog