All Topics / Help Needed! / Missing some basic knowledge

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of SoundOfGoldSoundOfGold
    Member
    @soundofgold
    Join Date: 2003
    Post Count: 59

    Hi all,
    I am pretty close to purchasing my first IP and its pretty exciting and scary at the same time. I have been reading and researching a bit but still have things to clarify so I thought this is the place to ask.

    I think these questions have been probably asked before but repetition is mother of wisdom (or so something) so please if you could:

    1. If the house is older than 40 years when I buy it, I am no longer eligible to claim the building depreciation (normaly 2.5% over 40years) is that right?

    2. To get all possible depraciable items in such house I will need to employ a quantity surveyor (costing around ?? $200-300) in order to maximize the tax benefits?

    3. How do I find a quantity surveyor? Is there any quantity surveyors registration body I can contact?

    4. Building materials – there are 3 types of houses in my target area: fibro, weatherboard and brick/brick veneer. While brick houses seem to be more expensive/less profitable I am turning my attention to cheaper fibros and weatherboards. What kind of materials are these and is there anything I should really be aware of?

    Thanks to all for help

    Dan

    Profile photo of alwayscuriousalwayscurious
    Participant
    @alwayscurious
    Join Date: 2004
    Post Count: 80

    Hey Dan.
    Firstly –
    You’ve got some good ideas here – keep going! you’ll get there if you persevere.

    A couple of points.
    Quantity surveyor is well worth the money as they find every little bit of depreciablity in the house such as light fittings, switches, taps, blinds etc.

    They cost about $400 + GST or more I think. More than $200 anyway.
    They cover your claims for depreciability which is well worth it.

    With fibro houses – there is usually asbestos if it’s over 25 years old which many people don’t like due to health risks.

    But if it’s painted, and left alone – it’s usually OK. Best not to disturb it they say.

    That’s probably why it’s cheaper.

    Timber homes may have more maintenance in the forms of painting and termite control than brick homes. That’s why they are cheaper.

    But if you weigh up the costs and benefits, you may find that these houses are fine! Read Jan Somer’s book – she doesn’t necessarly advocate one or the other. Cheers & keep going.

    Profile photo of redwingredwing
    Participant
    @redwing
    Join Date: 2003
    Post Count: 2,733

    My Advice,

    Get in contact with DEPRECIATOR on this site, look him up on member list, he can assist in most states and areas i believe and is ‘more’ than helpful re QS.

    REDWING

    “Money is a currency, like electricity and it requires momentum to make it Effective”
    Count The Currency With This Online Positive Cashflow Calculator

    Profile photo of depreciatordepreciator
    Member
    @depreciator
    Join Date: 2003
    Post Count: 541

    Thanks Redwing.
    Dan, happy to have a chat at any time – 1300 660033. Adding to the existing answers:
    1. To qualify for building depreciation, construction on the building needs to have commenced after July 18, 1985. Buildings constructed between that date and September 15, 1987, depreciate at 4%. After that, it’s 2.5%. renovations carried out after Feb 26, 1992 can also be depreciated at 2.5%.
    2. We charge $715 for a Tax Depreciation Schedule. For Forum members it’s $660. Yes, there are cheaper ones, but many of the ones I’ve seen would not pass an ATO audit. For pre 85 properties, we have a reduced rate and a slightly different type of service.
    3. There are lots of Quantity Surveyors around – check the yellow pages. Finding one up to date with the most recent ATO changes is tougher. Tax work is all we do and I’ve got around 70 Quantity Surveyors and Estimators on tap.
    4. I’m not sure whether the stigma about fibro will continue to grow, or whether it will die down. I’d steer clear of it.

    Scott

    Profile photo of qwertyqwerty
    Participant
    @qwerty
    Join Date: 2004
    Post Count: 117

    Hi Dan,

    Just for anothers answers.

    1) Correct. Unless it has been reno’d lately, then you can depreciate that.
    2) Yes
    3) Yellow pages / google it etc
    4) I prefer brick, tile and aluminium windows. If you are a true buy and hold this set-up requires the least maintenance. Also, in say an area predominated by fibro a brick home might let quicker because its cheaper to heat / cool and possibly seen as more prestigious to some.

    Profile photo of SoundOfGoldSoundOfGold
    Member
    @soundofgold
    Join Date: 2003
    Post Count: 59

    Appreciate your help guys.

    I see that the depraciation regulations are very precise so this time I will better write it down into my notes this time (as opposed to once again rely on my memory and than ending up repeatedly asking same question).

    alwayscurious: appreciate your words of encouragement, God knows i need it. I did read few Jan Sommers books and they are the best but seem to be a bit outdated, unless there are some new ones I may have missed. While her strategies are timeless (well I hope so anyway), as far as building materials go, books I read did not reflect the current society feelings about the asbestos products. Due to the attention given to this topic in the media recently, my subjective judgement is that people/tenants may try to steer clear of any asbestos products altogether.

    depreciator: thanks for the contact I will see how I go with my purchase and eventually may give you guys a call if thats ok.

    qwerty: thanks. I like the way you have established exactly what type of house you are looking for (point 4). Something I need to give a bit more thought.

    Dan

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