Landlords' Newsletter September 2014

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-


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-


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.

http://www.bmtqs.com.au/


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.


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.


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.


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

Landlords' Newsletter September 2014

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