Landscaping

[clk0]

Hello there,

Just a quick question whether this is a deduction or or for depreciation, details as below:

I have a house tenanted for a few years now. The couple has a young child and have requested to put in artificial grass (it's very bare -the grass "died") in the small back yard (softer landing for the child) and they are happy to stay for another couple of years. I guess - it's considered as landscaping. However, it costs $5,000. The tenant is willing to do it them selves (labour), so that would cost us $2,500.

Your input is appreciated!
Thanks


Jas

 

[Jonathon]

Depreciate over 5 years.

Cheers
Jonathon

 

[Belu]

hmmm not too sure on this one, what would the rent be going up by?

 

[clk0]

I think it is due to our rent increase by $15-$20 last month, they put in this request.....

 

[Belu]

is $15/20 a week reasonable for the market? You do not have to adhear to their requests such as this.

If you look at it from this point of view:
$5,000 over 5 years = $19.23/week

So if you have put the rent up by $20 and do this then after 5 years you are no better off - so why do it?

My recommendation would be to write if off over 2 years as they only want to stay "another couple of years". (By write off i mean against what benefit it gives you, not in a tax way) And add a bit more on.

So lets say $3,000 over 2 years and they need to do the labour, and $6,000 over 2 years if you get it done properly.

That is $28.84/week - make it $30 to account for PM fees for them to do it; and
$57.69 or $60/week inclusive of PM fees to get it done properly.

So my response would be "We are happy to attend to your request but require a slight increase in rent to cover the cost of the faux grass, resulting in the following options for lease renewal:

- $50/week increase in rent with the landlord providing the materials and the tennant installing the faux grass to a satisfactory level. The tenant will not retain any rights over the faux grass due to installation

- $80/week increase in rent which will include the landlord purchasing and professionally installing faux grass in the back-yard

- $20/week increase in rent to continueing leasing the property as is.

-------

Remember - this is a business you are running - you cannot ensure you will get an increase in rent due to the faux grass out the back after these tenants so do not bank on it, get them to pay for it in installments plus a small fee for your paying for it upfront and don't forget to factor in PM fees.

Hope this helps

 

[Chatto]

Did you have something included in the terms of the lease for maintaining the back yard?
What about a small water tank instead?
Do the tenants have any experience installing astro turf?

 

[weg]

Not quite answering your Q but...

That's a big outlay of $$ for an IP that probably won't reap you much back especially as all it takes is for one pet of a future tenant to dig through it after your tenant leaves (saying they're staying for 2 years doesn't mean they will).

Who killed the lawn? And why are you concerned about having a soft landing? If they were they wouldn't have taken on the place to start with.

If the lawn had died before they moved in then lay some rollout and let the tenant water and establish it for you. Much much cheaper and some of that extra rent ends up in your pocket.

 

[clk0]

Thank you guys.... you have raised a few great points that I have not considered.

 

[sue78]

that's too expensive. just re-turf it or even better, pave/concrete the whole area. less maintenance and adds value. astro turf adds no value.

if the turf died whilst they were renting then they're responsible. if the turf was dead when they agreed to rent it then it's not your problem either. fact is tenants don't like to do gardening and usually leave the gardens is a mess.

how big is the area? we decked an area of about 30sqm for less than $1k in hours and it looks great.

 

[want2bewealthy]

Maybe create a bit of a mini golf thing while youre at it, you could have spinning windmills and all sortsa stuff!

I put that in my yard last year and it all deteriorated within this time, leaves rot it up pretty quickly, real grass is the go.