landlords' newsletter september 2014
DESCRIPTION
Landlords' Newsletter September 2014TRANSCRIPT
In this edition: How long will it take for your property to rent? Want an Extra $190 in Your Pocket Every Fort-night? Don‘t Wait all Year When Deductions Can be Claimed as You Go! Reining in Your Rental Expectations! Could Your Mortgage Be Costing You Thousands of Dollars in EXTRA Interest Payments?
September 2014
Tenants‘ Water Costs – Who Pay‘s For What? A Selection of Properties Recently Leased Quote Another happy customer—Wow Moment Calendar of Events
Dear Landlord,
It's great that August has finally
brought some rain, a relief for
the thirsty earth at the same
time as we're seeing some relief
in certain markets. Even though
the rental market is still flooded
with rental properties, rental re-
turns are being held at the same
amount. I enjoyed a two-week
break house sitting on Bribie
Island (before the rain!) and was
lucky enough to get out fish-
ing and bring in a good catch of
T a i l o r , F l a t h e a d a n d
Bream! Fun, but not so exotic
as Julie's week away relaxing
on the beaches of Fiji.
Helen Bryan, our senior prop-
erty manager, is working to-
wards reducing her hours due to
family commitments and will
start to work a 4 day week com-
ing the month of September.
Helen is a valued asset to our
team and will continue to be
heavily involved in the depart-
ment while Julie will be working
towards taking on more respon-
sibility to allow for this change to
smoothly occur. Should you
have any questions about the
change please do not hesitate
to contact our team to discuss.
As we come into spring,
thoughts of spring cleaning
come to mind. For those own-
ers interested in discussing an
update of their properties or per-
haps in purchasing a second or
third investment property please
contact our team to see how we
can assist!
Best Regards,
Chris McCall, Business Devel-
opment Manager & the Team
(Christina, Julie, Helen and
Lisa)
Team and market updates for spring
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 August
BRISBANE STATISTICS The Market
Source: rentfind.com.au
Brisbane, QLD August 2014 Annual Change
Median Weekly Rent - House $410 2.5% increase
Median Weekly Rent - Unit/Apartment
$385 1.3% increase
Days on Market (Avg) 28.5 3.1 increase
Days Vacant (Avg) 16.9 2.1 increase
Want an Extra $190 in
Your Pocket Every
Fortnight? Don’t Wait all
Year When Deductions
Can be Claimed as You
Go!
Investors often look forward to
tax time! Many of the losses
from holding a property can be
claimed back, including: inter-
pate their tax liabilities. This
means that they can take ad-
vantage of the deductions
available to them regularly,
rather than waiting until the
end of a financial year for their
tax refund.
By selecting a PAYG withhold-
ing variation, a property inves-
tor‘s expected tax refund for
the financial year is estimated.
This allows their employer to
est, rates, repairs and mainte-
nance, property management
fees and depreciation deduc-
tions.
Many investors may not real-
ise that they don‘t have to wait
all year to benefit from the de-
ductions available to them. In-
stead, they can improve their
cash flow throughout the year
simply by nominating to use a
Pay As You Go (PAYG) with-
holding variation.
Introduced in July 2000, a
PAYG withholding variation
allows individuals to vary the
amount of tax withheld by their
employer in each pay to antici-
www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants
take less tax out of their wages.
The following example shows how a PAYG claim is calculated for
an investor without depreciation and how including the deprecia-
tion claim will help to further improve the investor‘s fortnightly in-
come.
The investor owns a house purchased for $532,000 and rented
for $600 per week, or $31,200 per year. Expenses for their prop-
erty including interest, rates, repairs and maintenance, property
management fees and insurance totalled $41,400. An assess-
ment of the property by BMT Tax Depreciation discovered the
investor could claim $13,354 in depreciation for the property in
the first full financial year.
ties.
It is important to note that sub-
mitting a PAYG withholding
variation does not replace a
normal tax return. A tax return
still needs to be filed at the
end of the year to calculate the
actual amount of tax liability.
Three simple steps to set up
a PAYG withholding varia-
tion
1. Contact an Accountant to
make sure that a PAYG with-
holding variation is suitable for
an individual‘s circumstances.
An Accountant will usually or-
ganise a PAYG withholding
variation by submitting esti-
mated financial information to
the Australian Taxation Office
(ATO).
2. To support a PAYG with-
holding variation, ask a spe-
cialist Quantity Surveyor to
produce a tax depreciation
schedule. This schedule will
outline all current and future
depreciation deductions for an
investment property. The
Before claiming depreciation, the investor will receive an addi-
tional $145 per fortnight in their pay by applying the PAYG with-
holding variation.
By including the depreciation claim, the investor will receive
$335, or an additional $190 in their fortnightly pay.
As can be seen in the example, a PAYG withholding variation will
provide added flexibility for a property investor. Having access to
the extra money during the year makes it easier to manage cash
flow, especially when there can be surprise costs such as urgent
repairs or maintenance. The additional income also gives the
owner the option to invest the extra money or reduce loan liabili-
www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants
of power from landlords to ten-
ants.
SQM‘s managing director
Louis Christopher said that,
overall, the rental market was
sluggish with asking rents
showing rises of just 1.2% to
1.7% at the average capital
city level.
―Perth rents have dragged
down the overall result. It‘s
quite clear rents in Western
Australia are falling quickly.‖
Each capital city continued to
tell its own unique story, he
added.
Darwin recorded the tightest
vacancy rate of the capital cit-
ies, with a vacancy rate of
1.4%. However, that was an
increase from 0.8% in July
2013.
Perth recorded the highest
yearly increase in vacancies. It
climbed to 2.5%, since July
2013 when it was 1.6%.
has not been a substantial in-
crease [in rents] when com-
pared to the same period in
2013.
Darwin and Sydney were the
only two capital cities to record
substantial increases in asking
rents since July 2013.
In fact, Perth and Canberra
both recorded considerable
decreases over the same pe-
riod.
The data does show a slight
decrease in the national va-
cancy rate over July, which
leaves the vacancy rate
steady at 2.3% nationally.
However, SQM‘s report makes
it clear that there is a longer
term trend of higher vacancy
levels around the country, de-
spite a minor dip in listings.
The report notes that this indi-
cated an increase of supply in
the rental market which, in
turn, meant a shifting balance
Reining in Your Rental
Expectations!
Landlords may need to rein in
their rental expectations with
new data indicating that the
rental market continues to
slow.
SQM Research‘s latest Asking
Rents Index reveals that there
higher the depreciation deduc-
tions are, the less tax an indi-
vidual needs to have taken out
of their pay.
3. Once the request has been
approved by the ATO, the em-
ployer will reduce the amount
of tax withheld, increasing the
owner‘s take-home pay.
Article provided by BMT Tax
Depreciation. Bradley Beer (B.
Con. Mgt, AAIQS, MRICS) is
the Managing Director of BMT
Tax Depreciation.
Please contact 1300 728 726 or
visit www.bmtqs.com.au for an Aus-
tralia-wide service.
www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants
Could Your Mortgage Be
Costing You Thousands
of Dollars in EXTRA
Interest Payments?
Property investors and home-
buyers have been cautioned
about ‗bargain‘ mortgage rates
and reminded to always check
comparison rates to find the
best deal.
Kim Cannon, managing direc-
tor of Firstmac, which powers
loans.com.au, said eager bor-
rowers who do not do their re-
search could end up costing
themselves more than
$100,000 in extra interest pay-
ments.
Mr Cannon offered an exam-
ple of a fixed interest rate loan
currently on the market at 3.95
per cent per annum, with a
comparison rate of 5.05 per
cent.
He said every additional 0.25
per cent in interest is worth
about $73 a month in higher
repayments for a $350,000
home loan. Mr Cannon said
that equated to an extra $875
each year and potentially more
than $26,000 over a 30-year
loan term.
―So if the difference in the in-
terest rate is more like 1.1 per
cent, that is about $114,999 in
extra interest over the life of
the loan,‖ he said.
Mr Cannon said investors and
homebuyers looking for a
home loan need to be alert to
tricky marketing by lenders.
―The message is simple – ig-
nore the teaser rate because
that‘s not what you will pay.
The true cost of the loan is
what the comparison rate will
tell you. Over the life of the
loan this is likely to add up to
many thousands of dollars.‖
Source: Smart Property Invest-
ment – 18 August 2014
If you would like to review your loan
structures we would recommend you
talk to Warren Schrodter, National
Finance Corporation on 0411744
163 or 3356 8132 Quoting VIP
code: REMCP
Melbourne recorded the high-
est vacancy rate of the capital
cities, revealing a vacancy rate
of 2.6%. However, this was
identical to its July 2013 rate.
Hobart recorded the largest
yearly decrease in vacancies.
It fell to 1.7% from 2.3% in
July 2013.
No capital cities‘ vacancy rates
increased on a monthly basis,
but Perth remained un-
changed at 2.6%.
Canberra and Darwin re-
corded the largest monthly de-
cline in vacancy rates. They
dropped 0.2 of a percentage
point to 2.1% and 1.4% re-
spectively during July 2014.
Christopher said that vacancy
rates were likely to rise from
these levels.
―Therefore we are expecting a
soft rental market for quite
some time and certainly well
into 2015.‖
Source: Your Investment Property –
21 August 2014
Agents and lessors who come
before QCAT to recover water
costs from tenants must sup-
ply evidence that the property
is water efficient, for example
by providing a certificate from
a plumber, or risk not having a
water account paid. If water
efficiency evidence is not pro-
vided, the tribunal may have
the difficult task of calculating
what may be considered a
reasonable sum to charge the
tenant. That question depends
on the individual habits of the
tenant (see s169(4)).
The tribunal may consider a
range of factors when deter-
mining water charges, includ-
ing average use in the relevant
local government area; the
area of land the property takes
up; whether or not the property
has water saving devices in-
stalled; how many people oc-
cupy the property; the quantity
of water for which the lessor
should reasonably be liable;
and any other matters the tri-
bunal considers relevant.
Tenants’ Water Costs –
Who Pay’s For What?
The escalating cost of water is
a major tenancy issue which
occupies significant resources
for the RTA and QCAT.
The problem is exacerbated
because quarterly accounts
are not always immediately
processed by lessors and
agents, and they do not al-
ways provide tenants with an
invoice for this cost in a rea-
sonable timeframe.
Section 166 of the Residential
Tenancies and Rooming Ac-
commodation Act 2008 sets
out that a tenant can only be
charged 100 per cent of the
water bill if:
the property is water effi-
cient
the property is individu-
ally metered, and
the tenancy agreement
states the tenant must
pay for water consump-
tion.
www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants
The only reliable way to man-
age this issue, and ensure the
tenant understands expecta-
tions about water usage, is to
include specific terms in the
tenancy agreement.
Parties should note the time-
frames for making an applica-
tion about a breach of agree-
ment which are covered under
s419(3). An application must
be made "within six months
after the lessor or tenant ...
becomes aware of the
breach." A party who only re-
members two years of water
bills when the lease ends
stands little chance of recoup-
ing all of those costs.
For more information visit the
QCAT website and the Master
Plumbers' Association of
Queensland website.
Source: Queensland Civil and
Administrative Tribunal (QCAT)
Member Bill LeMass (via the RTA) –
18 August 2014
15 September Mid Month Accounting 1 October End of Month Accounting
A Selection of Properties Recently Leased
Spring Hill House $765 p.w.
3 bed, 3 bath, 1 car accommodation
Quote
―Don’t count the days, make the days count‖
—Muhammad Ali
Taringa House $595 p.w.
4 bed, 1 bath, 0 car accommodation
RE/MAX Profile Real Estate 141 Boundary Road TEL 07 3510 5222 FAX 07 3876 5544
www.profilerealestate.com.au Bardon QLD 4065 Chris [email protected]
www.propertyrentalsbrisbane.com PO Box 388, Paddington, 4064 Helen [email protected]
Julie [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.
Yeronga House $750 p.w.
4 bed, 3 bath, 4 car accommodation
Calendar of Events
My wife and I recently met Chris McCall at the RE/MAX office in Bardon. We were very impressed with his professional and positive attitude and decided to give him the opportunity to rent our property in Bardon. This turned out to be a good decision as due a to a very pro-active advertising plan, tenants were found and suitability assessed within 7 days. A rental agreement was signed and we are now looking forward to trouble free rental manage-ment with Chris and RE/MAX. Thanks Chris Gregory and Gaye Blake
Another happy customer—Wow Moment