Latest Property Management News
Property Management Newsletter
Thursday, October 01, 2009
Welcome to the September edition of the Property Management Newsletter.
If Winter is meant to be the traditional “slower” period in real estate then we will certainly be busy during Spring. In the month of August,
As we have mentioned in the past few newsletters, our office is a finalist at the Real Estate Institute of NSW Awards of Excellence in the category of Residential Agency—Small. Also our Property Manager Joseph Lorriman has also reached the finals for the award of Young Agents - Residential Property Management Achievement.
The big night is almost upon us, with the Annual Awards of Excellence dinner held on 10th October at the Hilton in
Our agency is always looking for new ways to improve our service to you. With this in mind, we are investigating whether our landlords would like to have a new software facility available called iREST.
Basically iREST will allow you to log in online to see the following:
· Historic owner statements
· Historic tenant ledgers
· Report maintenance issues.
If you would like more information on iREST please contact your Property Manager.
A lot of people have heard of the term ‘Negative Gearing”. An interesting article appeared on Domain, speaking about negative gearing and tax deductions.
Negative gearing comes about when the interest paid on funds borrowed to finance an investment exceeds the income from the investment. The excess of interest over income produces a tax loss, which can be offset against other income. The interest cost reduces taxable income.
If the investor has a negatively geared rental property, the tax position is calculated as taxable salary plus rental income less the interest deduction.
According to Taxpayers Australia's Taxpayers' Guide, there is no limit to deductions allowed on interest on borrowings as long as the investment is classified as a passive investment, a category that includes property, shares and financial instruments.
In theory, investors can go for broke and use gearing to create large tax losses.
In practice, the decision whether to use negative or positive gearing depends on investors' cash flow position — whether they have plenty of income from other sources and can make use of the tax losses or they need the income from the investment property to live on.
A principal of Hudson Gore Financial Services in Sydney, Paul Hudson, says he always insists investors going into a negative-gearing strategy have some spare cash flow.
If cash is tight, negative gearing is not for them. The availability of redraw and line-of-credit facilities has complicated the deductibility issue a little.
If the borrower uses the redraw facility to finance the purchase of an asset that is not income-producing (such as a car), that part of the interest cannot be claimed.
Taxpayers
If the purpose of the redraw was to fund repairs to a rental property, then the extra interest could be claimed as a deduction.
Some rental property deductions, not related to the borrowing, that investors sometimes fail to claim are travel expenses involved in inspecting the property (one you own, not one you are considering), and costs involved in collecting rent, showing prospective tenants through the property and dealing with the agent.
Taxpayers
Another common mistake is claiming deductions for a rental property during periods when friends are using the property free of charge. Deductions are not allowed during periods of free occupation.
- Ashlee Murray & Joseph Lorriman