Investors Gear Up For Tax Time

June 9, 2011 Leave a comment

Tax time is just around the corner, and the key to maximising tax deductions for property investments is organisation and planning. 

At the end of the day, like any form of investment, keeping track of what is happening with your investment and its incomings and outgoings is what it is all about.

 Keeping receipts to prove your deductions and demonstrate why the expense was incurred is key to deriving assessable income.

 Preparing a depreciation schedule is also a legitimate way to claim tax deductions and if it is done by a qualified quantity surveyor, their costs are also tax deductible. 

Tax time should serve as a reminder for landlords to carry out property and pest inspections on their properties.

 This ensures any work required is carried out before the end of the financial year, and can then be claimed as an investment expense.

And if the investor purchases any fixtures and fittings costing less than the specific amount set by the tax office, they can claim an immediate tax deduction.

 In addition, the investor may be eligible for a deduction for depreciation on the cost of improvement by a previous owner, provided items are identifiable and itemised in a depreciation schedule.

There are also financial tips investors should consider.  This could include writing off borrowing costs over five years or the term of the loan, or self managed super funds borrowing to invest as well as prepaying interest against factors like anticipated future income, interest rates and cash flow impacts. 

Investors are encouraged to seek the services of a qualified and trusted financial advisor.  A financial adviser will understand the best options for property investors and their individual financial circumstances.

 Property investment offers the potential for good returns and long-term financial gains, but maximising the tax benefits of this type of investment ensures it works to its fullest advantage.

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Put A Freeze on Costs to Keep Warm

April 14, 2011 Leave a comment

There’s a lot homeowners can do to improve their carbon footprint and keep escalating power bills down during winter.

In winter, the typical Australian household consumes approximately 2700 kWh of energy, which is around 7 per cent more than in the warmer months.

So, while many environmentally-friendly actions should be taken throughout the year, it is during winter that we need to be more diligent and follow some additional guidelines.

Turn down heater thermostats by one or two degrees and close curtains and blinds to reduce heat escaping. Put on warmer clothing, like sweaters, to lessen the reliance on heaters for warmth.

Avoid leaving unnecessary lights on and switch them off when no one is in the room.  Outdoor lights should use motion sensors wherever possible.  Use lower wattage bulbs such as compact fluorescent lamps (CFL).  Appliances, such as computers and televisions, should be turned off at the wall, if possible.

Inspect the home for air leaks and install draught seals and weather stripping around doors and windows and repair faulty.

Upgrade all areas of the home to recommended insulation levels and potentially save 5 to 25 per cent on heating and cooling costs.

Install energy efficient appliances wherever possible.  Use major appliances, such as washing machines, dishwashers or dryers at bed-time and other low energy use times of the day, and avoid using them between 4pm and 9pm – this is the optimal time to power down.

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Home Offices. Do They Add Value?

February 17, 2011 1 Comment

Long commutes, improving technologies, and more workplace flexibility – these are just some of the many reasons why as many as one million Australians are now regularly working from home.

A stylish and functional office is an increasingly valuable asset to the family home or singles’ apartment.

With more people working and studying from home, the office is more and more a central part of the house.  Not only can it add increased value to a home, it is becoming a required feature, both in the city and in coastal or inland lifestyle properties where people only commute to the city for a meeting.

Today, more buyers want houses equipped with home offices that deliver a proper working environment. They are becoming as important as a spacious living room, or well designed kitchen.

As the nation’s economy adjusts to the increased internet speeds of the National Broadband Network, the value of the home office can only improve.

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Delay Reaction After A Disaster

February 10, 2011 Leave a comment

First National says victims of Australia’s recent spate of natural disasters should delay making major decisions until they have had time to recover both emotionally and physically.

According to First National, home owners should start by talking to their local real estate agent who may have some helpful tips on where to go for assistance, how to renegotiate loan arrangements or other options they may not have considered.

These tips may include things such as:

  • Finding out if there is a council buy back scheme for properties in ‘disaster’ zones, and if so, whether you are, or may be eligible now or some time in the near future
  • Banks and other mortgage providers may be prepared to provide interest holidays or other financial relief
  • Tenants and landlords should review their rights by visiting the respective residential tenancy authorities in each state
  • Recent home buyers who entered an unconditional sale contract may also have options depending on the definition of ‘habitable’ or ‘not habitable’ in their contract
  • Wait for the market to recover – based on past experiences, there is often an initial reduction in home prices following a natural disaster event, but prices have been found to mostly recover within 12 months.
  • Review and update insurance cover to ensure the property is protected from similar disastrous events in the future
  • Look for discounted services and goods, which can generate significant savings for today and the future such as non-profit building and construction companies like Architecture for Humanity, www.flooddiscounts.com.au or bargain-priced wood, steel, aluminium and tradespeople.

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Spring Awakening – Money Grows on Trees

September 1, 2010 Leave a comment

Money Grows On Trees

With winter and the election now part of history, spring is the time for the property market to spring into action. There is money to be made and the home garden is a great place to start.

Well maintained and landscaped gardens can add 10 per cent, or more, to a property’s value – so plant now in the Springtime and see home values grow. 

  • Make first impressions count: stand at the front of your property and view it with a critical eye for areas of improvement.
  • Keep it simple: make sure there is still plenty of opportunity for buyers to make their own stamp on the garden.
  • Know your product:  maximise the appeal of your garden’s best assets and know who your buyer will be, so your garden can be planned to meet their needs. 

Native drought tolerant gardens are increasing in popularity, but the desire for colour is still strong.  Colour is an effective way to create and reflect moods – so use it to its greatest effect. Visit First National Real Estate Burnie’s website for more tips on designing and planting a native, drought tolerant garden.

For immediate results, neaten up the garden by mowing the lawn, trimming edges, adding some mulch and storing away toys and personal items.

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Home Ownership Still Within Grasp

June 21, 2010 1 Comment

Home owners and buyers are once again feeling the pinch to keep their dreams of home ownership alive as housing affordability returns to the property market agenda.  But, it’s a matter of rethinking options and developing creative strategies. 

Impending future rate rises, along with tightening lending conditions and increasing mortgage stress concerns have started to take their toll on home buyers’ ability to own their own home.  Home buyers need to take action on an individual level to tear down the wall of housing affordability in any way they can.

Recent research has found a decline in the number of home loans with a high loan-to-value ratio (LVR) of 95 per cent or above.  LVR refers to the amount of money borrowed for a property, compared to what the property is worth. 

While lending criteria has toughened in recent months, there are still lenders willing to negotiate a better deal around a number of factors such as fees or rates or the actual LVR itself. 

Lending institutions need to be willing to negotiate and be a little more flexible.  There are plenty of lenders out there who are willing to do just that, if home buyers are willing to shop around a little and do a bit of homework themselves.  It’s up to the individual to take matters into their own hands and ask.

But they need to have the facts that support their case as well.

Some key tips for overcoming housing affordability concerns include:

  • Time your purchase for when there is a lull in the market, such as winter, when the market generally slows and lower demand can potentially tip the balance in favour of buyers.
  • Calculate what you can afford to spend, factoring in any interest rate increases, probably 2 per cent higher than current levels.  Match this to your list of preferred suburbs and concentrate on properties that are genuinely within your range. 
  • Be flexible and adjust expectations as required.  You may dream of buying a home in a particular area, but consider a smaller home, or even a unit or apartment, with a view to upgrading later.  Alternatively, consider an area a suburb or two removed from your where you would like to live. 
  • Start a disciplined saving strategy immediately.  Set realistic savings goals and set up an achievable budget for household expenditure. 

First National Burnie has some sage advice for home owners currently experiencing mortgage stress. 

Home owners can consider extending the life of the mortgage. 

In recent years, all the focus has been on how quickly a family can pay back the mortgage and then move another rung up the ladder. 

Obviously, that is the most desirable situation, but times are changing and it may be more useful to focus instead on how to get into the market in a way that is financially manageable. 

But whatever you do, you should seek the services of a qualified, reputable and trustworthy financial advisor.

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Child Proof Your Home

April 6, 2010 Leave a comment

Children are always at risk of injury, but never more so than in the family home.  According to Deanne Lamprey from First National Real Estate Burnie there are many simple measures that can be taken to prevent simple accidents, often with far-reaching and serious long-term effects, from occurring in the home. 

“It’s a simple case of taking a critical view of objects around your home and understanding where the potentials for hazards are,” Deanne Lamprey said. 

“Take the time to get down and crawl around the home so that you can see for yourself where curious hands and adventurous spirits might roam.” 

While childproofing the home is important for families, investors should also take the time to understand how child-friendly their investment property is as it may represent a marketing point for their investment property.

Injuries are the leading cause of death in Australian children aged one to fourteen, accounting for nearly half of all deaths in this age group.  More children die from injury than of cancer, asthma and infectious diseases combined.

Unintentional injuries make up around 95 per cent of all child injury deaths, with young children under the age of five years are most at risk of unintentional injury.

“The most common place for young children to be injured is in their own home, so ensuring the safety of our homes should be paramount for parents to keep their children safe,” Deanne Lamprey said.

“There are so many things that are precariously balanced, just waiting to be pulled down, knocked over, bumped into or climbed on.

“And as the child becomes more mobile and dexterous, they love to put things in their mouths and they don’t discriminate between toxic or poisons and lollies or biscuits.”

Download a copy of the Childproofing The Home from our website.

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