The latest happenings in the Melbourne property market. For our Essays and The Secret Agent Report, see our Research page.

Category Archives For: Property Investment

Some further thoughts on real estate fees and taxation

Often I’m asked about real estate fees and the tax implications involved.

So here’s some info aimed at investors that might be of benefit.

Selling agent fees or buyer agents fees are not a tax deduction. You can’t present these to your accountant and expect these fees to be used as a general deduction.

However you can use the fee to offset your capital gain/ loss when selling your property in the future.

For example, lets say you paid a $10,000 fee to the agent to find and negotiate the property transaction for you. You sold the property within 6 months and made a gain of $60,000. That $10,000 can be offset against that gain bringing it down to $50,000 and then subtracting all further costs.

Always check with your accountant to match with your personal circumstances.

Getting the ‘first one’ right

Having a conversation with a gentleman today, he mentioned that he and his partner thought that if they could get their first property purchase right, then that would put them into an ideal position to launch onto the second one from there.

That’s really smart thinking. The ‘first one’ is so important to get right. It helps to propel future purchasers.

If more people thought this way, I think they would be in a much stronger position moving onto their second or third purchase.

Dual Occupancy – with Robert Eckersley

With increasing pressure on many of Melbourne’s inner suburbs to ‘dense up’, dual occupancy is an option for property buyers looking to make a financial gain.

While controversial in many suburbs, it can be done well. Here we discuss in more detail about dual occupancy prospects.

Starting with the non negotiable

When beginning your search for your property purchase, sometimes it’s handy to start with the one thing that is non negotiable for you.

That might be living close to a lifestyle location filled with restaurants/bars etc or being in a certain school zone to cater for the kids.

Building from your absolute non negotiable points will help you get settled quicker. Often many simple ‘likes’ that you may wish to have hinder the process.

Likes may be things such as whether the place has carpets or floorboards, or if the backyard has a nice garden or not. These things can be changed. Things like school zones and lifestyle locations can’t.

Wait for this weekend to pass

Melbourne has been a little rocky over the past few weeks. We’ve seen a slow drop in clearance rates, interest rates rise slightly and the stock market shedding some serious dollars.

This is really a confidence thing at the moment and many people have gotten a little jittery as a result.

My take is this weekend will help shape maybe even the next few months. We have about 2600 auctions to run through until the Queens Birthday weekend. so vendors will be slightly uneasy about pricing.

If you’ve found the right home, then this could be the time to execute. Especially if that home is not a replaceable purchase. If you’re an investor on the other hand, I’d be waiting for the weekend to unravel.

We could be seeing a flattening patch in front of us.

‘Character’ rich property, does not necessarily translate to better rents

Some properties just ooze original character. Often these are period homes; take for example an art deco apartment.

When it comes to the sale price, a premium is paid for this type of property. On the rental side however, they don’t quiet reach the same heights.

Fact is that most tenants pay for livability and functionality of the property rather than the ‘character’ aspect, which is so highly valued in the eventual sale price.

The importance of a healthy body corp fund

Seems like very few actually look into the financials of a body corporate.

Is it in surplus or in deficit? Always a quick look over the financials in the Section 32 and put in a call to the managing owners corporation agent, to help you understand this.

Evert property should be looked at like buying a company. It’s financials are important.

Avoid the headlines

Some recent data pointing to a bubble situation not occurring, is making some big news at the moment.

Many take the headline of that news article and leave it at that. Make sure you read any info coming through, evaluate it, see who it’s coming from and make your own decisions.

Advice for Landlords

Frank Trotta from Trotta & Co has recommended some good advice for Landlords.

Here’s some points to keep in mind for deductions this financial year:

Rental Properties – travel expenses

Editor: The following is about claims by taxpayers with rental properties and demonstrates how we can help you with those claims.

What travel expense can taxpayers with rental properties claim?

Taxpayers can claim:

  • Preparing the property for new tenants (except for the first tenants)
  • Inspecting the property during or at the conclusion of the tenancy
  • Undertaking repairs, where those repairs are the consequence of the damage or wear and tear incurred while rented out
  • Maintenance of the property, such as cleaning and gardening, while it is rented or available for rent (Try Pauls Cleaning, Meticulous Cleaning or Top Shelf Cleaning for Melbourne end of lease cleaning rates)
  • Collecting the rent
  • Visiting their agents to discuss their rental property

Domestic travel requiring an overnight stay

A rental property may be located so far from where a taxpayer lives that it would be unreasonable to expect them not to stay near the property overnight when making an inspection.

If this is the sole reason for the trip, they are entitled to claim a deduction for travel expenses incurred in travelling to the rental property.

Where an overnight stay is involved, they would be entitled to claim for meals and accommodation.