Monthly Archives: December 2012

Article of interest – Courtesy of LJ Gilland Real Estate Pty Ltd

Why you should get busy investing in residential property in 2013: Terry Ryder

By Terry Ryder
Thursday, 20 December 2012

The biggest twits in real estate are the people waiting for the trough.

Many tell me they’re not going to act until “the market bottoms”. I ask how they think they’ll be able to identify the bottom when it arrives. They don’t have an answer.

Primarily, I think, they’re waiting to read about it in a newspaper.

Here’s the problem. There’s nobody writing for newspapers with sufficient expertise to know a trough from a peak.

Here’s another. By the time journalists start writing about the market bottoming, after receiving a press release from an attention-seeker, it will be too late. It will have occurred six months earlier.

And here’s the biggest problem. While people have been scratching their bottom waiting to pick the bottom, the bottom has already happened. In many key markets, it’s already part of history.

It may not feel so for some people, but 2012 has been a much better year in real estate than last year. Darwin and Perth have had huge rental increases and prices have started to follow. The bottom has long since passed in those two cities.

The latest figures for Sydney and Brisbane also indicate the declines of 2011 and early 2012 have been arrested, and those markets are also moving forward.

Around Australia, many regional markets have left their troughs in the distant past and have had strong growth years in 2012. There are dozens where prices grew 5% or more in the past 12 months.

The trough-seekers have been piling into markets like Gladstone this year, having missed the trough which happened two to three years ago.

It doesn’t get any better than this for property buyers. All the indicators – including rising sales activity, increased lending levels, improved clearance rates, six interest rate reductions and seven consecutive quarters of improved affordability – declare that now is the moment.

So, following an improved 2012, next year will be better again. I’m expecting growth in all the capital cities except Melbourne (Hobart I’m not sure about – weak economic fundamentals may be counter-balanced by the advancement of key construction projects and state government spending packages).

The regions will again provide the most upside for property investors. Many regional towns and cities have been solid in 2012 and some have been very strong. There will be more growth markets in 2013 than this year.

It’s important to pick the right ones. The key factors to look for include diverse economies, proactive local councils, spending on infrastructure and expansion of jobs-creating businesses.

The best capital growth will be found in those that experienced significant rental growth in 2012, but not the same level of price growth – yet.

Most likely these will be regional areas touched by the resources sector but not dependent on it. Toowoomba in Queensland and Tamworth in NSW provide a couple of pertinent examples. These places have been important, prosperous regional centre’s long-term but have an additional powerful element to their economies with the emergence of resources activity in their area of influence.

These are safe places to invest – you’re getting the benefit of the mining sector without the risk of buying in a mining town.

So here’s the best tip for getting the best out of 2013: get busy now. Don’t be a herd animal. Most investors follow the pack and end up like pigs feeding at the trough, in a shambolic frenzy – except, it’s not a trough any more. By the top everyone’s gorging themselves, it’s well on the way to the peak – or has already passed it.”unquote

Kindest Regards

Removing the hassle from Sales and Rentals.

L J Gilland Real Estate PTY LTD

Office No:- (07) 3263 6085

Fax No:- (07) 3263 5985

Mobile No:- 0409995578

Email address: linda@ljgrealestate.com.au

PO BOX 19 ZILLMERE 4034

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The information in this message is intended for the recipient named on this email. If you are not that recipient, please do not read, copy, distribute or act upon the message as the information it contains may be privileged and confidential. If you have received this message in error, please notify us immediately by return email. Thank you for your co-operation

Merry Christmas & a Happy New Year!

Our Office will be closed from
P.M 21st December 2012 to A.M 2nd January 2013

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Linda Difference between repairs, maintenance and improvements article fyi

Hello Friends, Clients & Associates,

The following is for your perusal and information only:-

Difference between repairs, maintenance and improvements

It’s a common question among new property investors: “What’s the difference between repairs, maintenance and improvements?”

This is important stuff to know if you’re going to invest in property because it affects your tax deductibility and hence your cash flow.

Many landlords forget about the new tap or roof repair that they can claim a tax benefit for because their primary focus is on rental returns and capital gains. But it’s the smaller things that can add up to a big tax advantage if you document every item. So the first thing to do is understand the difference between them.

1. A repairis usually partial and restores something to its original state eg. repairing part of a fence by replacing two palings

2. Maintenance is work that prevents deterioration or fixes current deterioration eg. painting your property or oiling the garage door

Repairs and maintenance must relate directly to wear and tear or damage that occurred due to renting out your property. The ATO provides the following examples of repairs and maintenance for which you can claim an immediate deduction in the same year.

  • Gardening and lawn mowing
  • Cleaning
  • Pest control
  • Servicing a water heater
  • Replacing guttering damaged in a storm
  • Replacing part of a fence due to a fallen tree

3. An improvement makes something better than it was originally or provides something in a new and more valuable or desirable form. They generally improve the property’s income production or expected life. A repair becomes an improvement when you go beyond simply restoring an item to its original function. For example, if you replace a worn paling fence with a brick fence, you are going beyond simply repairing the fence – you are improving the fence with a better material

The ATO provides the following examples of improvements.

  • A new stove
  • New kitchen cupboards
  • Building a garage or carport
  • Removing or adding an internal wall

The differing tax benefits between a repair, maintenance and improvements

Generally speaking, you can claim an immediate deduction for repairs and maintenance in the same financial year, as long as your property is being rented out

Generally speaking, you can claim a capital works deduction or a deduction for decline in value (depreciation) over a number of years for improvements

The ATO provides the following examples as to which improvements should be depreciated and which ones attract a capital works deduction.

Depreciation deduction

  • Ceiling fan (depreciated over 5 years)
  • Carpet (10 years)
  • Floating timber floors (15 years)
  • Hot water system (12 years)
  • Window curtains (6 years)
  • Dishwasher (10 years)
  • Air conditioner (20 years)

Capital works deduction

  • Fixed floor coverings, such as tiles and vinyl
  • Grease traps
  • Hand rails
  • Ducts, pipes, vents
  • Shutters
  • Wardrobes

Important note for new investors

When you buy an investment property, there are often items that need repairing before you can lease the property out. The ATO has a name for this – they’re called ‘initial repairs’. They are not deductible. Instead, they are considered part of the acquisition costs of the property and may be included in the capital gains tax cost base.

All the information above is general in nature. Use it as a guide only. As with most tax stuff, it’s important to get professional advice. Speak to your accountant regarding individual repairs or improvements and get a quantity surveyor to take stock of all the items in your property that are depreciable.

If you haven’t been monitoring your repairs, maintenance and improvement expenses, you might be missing out on thousands of dollars in tax benefits!

Published: Wednesday, November 21, 2012

Best regards,

Linda and Carlos Debello

http://www.ljgrealestate.com.au

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Confidential email:- The information in this message is intended for the recipient name on this email. If you are not the recipient please do not read, copy distribute or act upon the message as the information it contains may be privileged. If you have received this message in error, please notify the writer by return email. Thank you very much for your assistance in this matter and your co-operation.

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5 Tips for finding a place to rent at this time of year – L J GILLAND REAL ESTATE PTY LTD

Top 5 tips for finding a place to rent at this time of year

With the festive season now upon us many of us are planning to move house due to changing jobs, moving interstate, and with January historically one of the busiest times for people looking for a rental it’s important to make sure you are ready and prepared for securing the place you want. So here are our top 5 tips to be best prepared:

Start early, do a search in the area you would like to move to now so you understand what you can afford with your budget.
Set up your email alerts now. Property Manager’s will be busy loading up newly available rentals in early January so don’t miss out on your perfect rental.
Remember to check surrounding suburbs when you search, as some suburbs have very low vacancy rates, so next door suburbs may be an option.
Make sure you have all your documentation ready, eg references, proof of employment and income.
If you don’t already have a 1Form tenant application form set up, go to 1Form.com.au now, most agents like LJ Gilland Real Estate accept these for your application.

Merry Christmas & a Happy New Year!

Our Office will be closed from
P.M 21st December 2012 to A.M 2nd January 2013

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Article by Steve Keen for friends & Clients, LJ Gilland Real Estate Pty Ltd

LJ Gilland Real Estate Pty Ltd (http://www.ljgrealestate.com.au) thought this article would be of interest to you as follows:-

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Take a look at my LinkedIn Profile

I thought you might find my LinkedIn profile interesting:

Linda-Jane (Gilland) Debello
Investment Property Sales & Management Specialist. Licensee & Owner L J Gilland Real Estate Pty Ltd https://www.linkedin.com/profile/view?id=44241488

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