Newsletter_Depreciation Costs

Are you eligible for tax depreciation benefits?

You may have owned an investment property for some time, but have you made sure that you have maximised the potential of your investment? This means not only achieving a market rent and consistent income flow by securing an excellent tenant but also other factors that you may not have considered.

The sooner you efficiently monitor your investment property, the sooner you’ll be in a position to buy your next investment property.

Did you know that any property built after 18 July 1985 is eligible for depreciation benefits on its historic construction costs? No matter whether your investment is new or old, it will have depreciable assets that can be claimed such as air-conditioners, whitegoods, floor and window treatments, renovations and furniture, just to mention a few items.

80% of Australian property investors do not claim these legitimate taxation benefits which is a bit like not claiming the weekly rent from your investment property. This can equate to thousands of dollars in unclaimed benefits each year.

Claiming depreciation tax benefits can assist your cash flow to; pay off your principal place of residence; increase equity in your investment property or increase your cash flow to buy another investment property.

You may not be aware that the Australian Tax Office allows you to amend your previous four taxation returns to claim depreciation benefits so if you have been missing out, it’s not too late to do something about it.

The fee for a Depreciation Schedule is fully tax deductible. Simply call our office and we can make the arrangements for the tax depreciation inspection and report to be undertaken.

Building your property investment portfolio can be made easier by claiming legitimate tax deductions that you may be presently missing out on.

Newsletter, Using electricity safely

Using electricity safely

The safe and efficient use of electricity in the home is important for your family’s welfare and may assist you to reduce electricity usage and your costs. Keep your family safe by ensuring all electrical appliances and equipment in and around your home are safe to use and in good working order.

Safe use of electrical appliances and equipment.

Follow these simple tips for keeping electrical appliances and equipment in good working order and making your home safe:

• Never use an ageing or faulty electrical appliance – including an appliance with a frayed cord, cracked or broken plug, or any appliance that has given someone any kind of shock. Frayed or damaged cords should be replaced immediately or the appliance disposed of. Many old plugs do not have safety barriers between the connections – replace them with modern plugs or dispose of the appliance.

• All appliances must have a regulatory compliance mark (RCM) and the plugs must have insulated pins, as per the images below

• Do not attempt to repair faulty electrical appliances yourself – only qualified repair technician or a licensed electrician can repair appliances

• Do not touch or attempt to repair a loose, cracked or broken power point switch – cover it immediately and arrange for a licensed electrician to replace it

• Avoid ‘piggybacking’ adaptors, instead use a power board with a built-in safety device

• Service appliances in accordance with the manufacturer’s instructions

• Clean the lint filter in your clothes dryer after each use

• Check electric blankets at the start of each winter for damaged wires, plugs, leads and hot spots – dispose of any electric blanket that is damaged

• Remove any build-up of materials around the electric motor of exhaust fans, such as fluff, dust, lint etc.

• Clean rangehood filters regularly

• Clean ovens and cooktops regularly to prevent the build-up of spilled fats and burnt foods

• Do not spray household cleaners, detergents and insecticides on electrical accessories – they may cause cracking and create an electrical hazard

Boost Rental Income

Ways to increase your Rental Income

Securing a strong yield in rental income is the strategy of many property investors.

Strengthening this further doesn’t always have to rely on market conditions improving. Here are some tips:

Replace Appliances – replacing the tired old oven or stove or adding a new dishwasher always adds to the appeal of a property.

Adding security – ensuring that doors and windows have good key locks, and even adding a security alarm provides peace of mind and sense of wellbeing and safety. Tenants can also receive a discount on their tenant contents insurance if the dwelling has better security. This just adds to its appeal.

Refreshing the Property – adding a new coat of paint to the walls and woodwork, replacing tired or damaged flooring or making other improvements can increase the appeal of the home and can also increase its demand and rental asking price. Don’t forget your tax depreciation benefits when renovating. Speak with your accountant on this one.

Add Storage Space – Tenants love storage space, especially when they don’t need to bring it. Installing built-in robes and cupboards that use space in a smart way and adding shelves in bedrooms or in the garage will make the home more attractive. Is there space under a staircase that can become storage space? Be creative!

Bullet-Proof the Garden – let’s face it, tenants in general don’t like gardening. Therefore, a low-to-no maintenance garden will be attractive. Can the small lawn area be replaced by synthetic turf? Can gravel, stones or other landscaping material that looks attractive replace lawns and gardens? Can the watering systems be automated? Tenants really do value convenience.

Street Appeal – prospective tenants do judge a book by its cover so it makes sense to make sure that the cover looks great. Do the letterbox or fences need new paint or even replacing? Does the garden need a facelift? This doesn’t have to cost a lot to look great!

Newsletter, End of Tenancy clean

End of Tenancy Clean

We have all seen and heard the stories of the tenants from hell when a tenant vacates, however not every tenancy ends on a bad note.

Actually, MOST tenants do their best to do the right thing during and at the end of their tenancy… however things can go wrong.

In order to minimise the potential for any damage or cleaning required to your property at the end of the tenancy, we issue your tenant with a pre-vacate checklist.

Our pre-vacate checklist not only outlines the date in which the keys are to be returned and the date in which rent is to be paid to but also includes a cleaning guide. Our cleaning guide incorporates the areas that require additional attention room by room appliance by appliance.

From our experience we find that most bond disputes centre around the cleanliness of the kitchen and bathroom areas and cleanliness of carpet. There are often differing interpretations of fair wear and tear and our cleaning guide is designed to eliminate such confusion by clearly setting out our expectations before the tenant vacates. We work on the premise that a tenant cannot come to us and say that “we weren’t aware of what we had to do” or “I didn’t have to do this where I rented before”.

Our pre vacate checklist is designed to ensure that all steps are taken by the tenant to ensure that the property is left in good order and that the tenancy is ended to the best advantage of all concerned. The property is left in good, clean condition and the tenant receives a full bond refund.

By pre-framing the vacating requirements we are protecting your interests and also doing our best to ensure that the property is presented to the best possible standard by the outgoing tenant.

Newsletter, Pets & renting

Pets in Rental Properties

It is natural for property investors and property managers to be wary of allowing pets into a rental property based upon a prior experience or concerns over what could happen.

Should we decide to allow a pet in the rental property, some firm guidelines should be placed at the start of the tenancy and written as additional terms of the tenancy agreement so there is firm understanding and agreement as to the consent that we have granted.

Firstly, when we check the tenant’s references, additional particulars should be sought as to whether the pet created a disturbance, nuisance or damage during a previous tenancy.

Tenant must also inform us the breed, size and number of pets that are to be considered as part of the tenancy.

Although difficult to police, clear guidelines will be sought and made whether the pet will remain outdoors at all times or whether the tenant will be allowed to bring the pet indoors.

If we decide to allow a pet into our rental property, we will set guidelines such as the above, in addition to terms such as the tenant fumigating the property internally and externally and steam-cleaning the carpets at the end of the tenancy. Restriction of the number and type of pets should be written into the agreement.

Our experience has shown that by making it clear at the start of the tenancy that consent is granted upon the terms set out in the tenancy agreement it is possible to have a harmonious pet friendly tenancy.

Newsletter, Insured Tradespeople

The dangers of contracting uninsured Tradespeople

We are all aware that litigation is common in our society today, being influenced by the litigious attitudes.

With newspaper, television and internet media commonly making us aware of litigation cases for the purposes of maximising readership and selling advertising space, the result of that exposure is that litigation has become more commonplace.

Property management is in no way immune to litigation and one area of concern is injury to tenants and/or their visitors or damage to property caused by tradespeople. As professional agents, it is our duty to ensure that all tradespeople are screened not only for their qualifications, but also to ensure that they have adequate public liability insurance.

However, we do come across landlords from time to time who wish to contract their own tradespeople, not being aware if they have adequate qualifications or the right insurance cover should something go wrong. Where a landlord chooses to do this, we are unable to deal with these preferred tradespeople directly because we have no way of knowing they are qualified or insured to perform the work required, leaving us exposed to risk.

So, because of this we insist with our clients that all work be performed by OUR qualified tradespeople, specially selected for their quality and reasonable rates.

Newsletter, Property Maintenance

Be proactive with maintenance

Have you ever answered a call from your Property Manager or Tenant with “How much this time? What’s next?”

You’re not alone!

Imagine the tenant’s side… “Another call to report another thing broken down!” That may not be the case for your property but this is how some tenants feel.

We encourage you to be proactive with maintenance. Between tenancies is the perfect time. Have a tradesperson inspect your property to repair and report on what may need fixing in the future. A friendly call to your tenant to see if there is something you can do, instead of them phoning can make a big difference. A little forward planning can help alleviate stress of another call and keep your tenants happy.

Naturally we can assist with any of these tasks, so please let us know should you want us to contract a tradesperson to give you a detailed report of what might need repairing and renovating.

Newsletter Image

What is a Fixed Term Tenancy?

A Fixed Term Tenancy Agreement is an agreement that has a set or fixed expiry date and cannot be extended past that date. There are no continuation or carry over provisions on such agreements.

A Fixed Term Agreement occurs commonly when a property is on the market for sale or the owner intends to re-occupy the property at a specified date.

It is vital that all parties remain aware that notice is required to deliver vacant possession at the end of the fixed term.

Please be assured that we will act accordingly to ensure that the tenancy is ended on the specified date.

What happens when the fixed term of the tenancy agreement ends?

There is a common misconception regarding the expiration of a fixed term tenancy agreement that the tenant can vacate without notice or the landlord can gain possession on that date.

For a tenancy to be legally ended the tenancy is to be terminated in accordance with tenancy legislation.

In order for a tenancy to be terminated by either party the following needs to occur:

1) The agent/landlord gives the tenant notice.
2) The tenant gives the agent notice.
3) The property is abandoned.
4) The Tribunal orders vacant possession.

Tenancy legislation clearly details the notice required by either party to end the tenancy depending on the reason, such as the end of a fixed term, periodic agreement, property sold or landlord moving into the property.

If you require vacant possession it is important that you discuss this with us. Please do not assume that as the agreement has expired or is about to expire that you can get immediate possession of the property. Proper notice is to be served upon the tenant to ensure that you can legally gain possession of the property with undue delay.

Newsletter, Landlord Insurance

Landlord Insurance is a must!

Now is the time to check the extent of insurance cover that you have on your investment property. Does your policy include building, contents, strata (in the case of a unit), legal liability, loss of rent and malicious damage?

It is wise to insure your investment in the event of a natural disaster, storm damage, defaulting tenant or fire. Most investment unit owners are under the impression that the owners corporation insures their unit. This is not the case!

The body corporate insurance extends to common areas only, therefore you should insure all contents such as paint, window coverings and light fittings.

We highly recommend to purchase landlord contents & public liability insurance as a separate policy to the Owners Corporation insurance cover. Landlord contents insurance includes carpets, curtains, blinds, light fittings and electrical appliances not actually wired into your apartments & any furniture you may provide.

The policy also provides legal liability protection for any third party property which may occur at your apartment & for which you may be legally responsible. Loss of rent through the Strata cover is available only if there is an insurable event and hence do not rely on the loss of rent within the Owners Corporation policy.

As your managing agent we can assist you in sourcing a landlord insurance policy that suits your needs. For a modest premium, landlord insurance cover gives you peace of mind that your investment property is adequately insured.

Newsletter, saving hot water costs

Reduce Hot Water Costs

Regardless of the type of hot water system you use, here is a number of common-sense ways to reduce the amount of hot water you use and pay for:

• Install a low-flow shower head for a satisfying shower using the minimum amount of water.
• Take shorter showers. Use a shower timer to encourage your household to take four-minute showers.
• Wash your clothes in cold water where possible.
• Fix dripping taps.
• Insulate exposed hot water pipes with closed-cell rubber insulation, available from hardware stores.
• Service and maintain your hot water system using a licensed tradesperson according to the manufacturer’s instructions.
• Plan for your hot water system’s replacement, especially if it’s more than ten years old. Choose a hot water system to suit your household’s needs.

Choose an energy efficient hot water system

The type of hot water system you have makes a big difference to your energy bills. There are a range of energy efficient hot water heaters to choose from, depending on your fuel source, household size, budget and preference for instantaneous or storage systems. Choose the right hot water system for your needs and use it wisely, and you can save energy and lower your hot water costs.

Electric hot water systems

Electric storage hot water systems – the most common type in Victoria – heat water with an element in the bottom of the unit and store it in an insulated tank, ready for use throughout the day. Electric hot water systems are the cheapest to buy but the most expensive to run.

Gas hot water systems

A high efficiency gas hot water system is one of the most economical types of water heaters, when operated on natural gas. Gas and electricity prices are rising, so if you have a conventional gas or electric hot water system that needs replacing, consider a more efficient gas or solar hot water system.

Solar hot water systems

A solar hot water system is more expensive to buy and install, but the running costs will be significantly lower. The cheapest and most environmentally friendly type of water heating to run is natural gas-boosted solar.

Heat-pump water heaters

A heat-pump water heater uses heat from the surrounding air to heat water in a storage tank. A heat-pump water heater uses much less electricity than an electric storage water heater, but are generally better suited to warmer climates.