Looking at furnishing unit

[want2bewealthy]

Im looking to furnish a 2br unit with 'flash' kinda furniture for high rental and good depreciation benefits, Im wanting to know if receipts for all the goods will be good enough for my accountant? as I already paid to have a dep report done up

Im thinking all new, nice bedroom 5 piece setting, couch, 32" LCD television, dining setting, all that kinda stuff

I figure it would up the rent from $350p/w to around $430 per week so thats an extra 3k per annum after PM fees and would make the property positively geared so guess Im saving in the long run, not sure how much Id receive back from depreciation?

Any thoughts or words of wisdom? apart from Im responsible for repairs to TV or fridge should they die would be greatly appreciated, thanks y'all.

 

[Propertunity]

Im looking to furnish a 2br unit with 'flash' kinda furniture for high rental and good depreciation benefits, Im wanting to know if receipts for all the goods will be good enough for my accountant? as I already paid to have a dep report done up

Receipts are fine. You will be replacing this stuff frequently as it gets knocked around - so you normally wouldn't get a QS report evertime you do new furniture anyways.

not sure how much Id receive back from depreciation?

This stuff will get written off reasonably quickly by comparison to say the building. Check the ATO web-site for how much %.

Any thoughts or words of wisdom?

Furnished does get you more rent and more depn. More of the latter because it gets knocked around. Furnished also restricts your tenant pool because most have their own furniture. It also attracts shorter term tenancies - so lots of moving in & moving out - knocking your house/unit about too.

apart from Im responsible for repairs to TV or fridge should they die would be greatly appreciated

Yes, you are going to be responsible for everthing you supply. When the fridge makes a 'funny noise' or the remote for the TV does not work or the reception is a bit fuzzy or the video plug came out or the leg falls off the chair etc etc.

 

[Pushka]

We decided to furnish 2 bedroom apartment and all we used was receipts. If jointly held, you can write off $300 each - so washing machines etc were written off in first year. All up, I think we spent around $14,000 using leather couches, LCD TV, sound system, clock radios, microwave, all kitchen implements, etc etc. Basically I tried to recall everything you would get in a holiday apartment.
Most things, being brand new were covered under warranty. It does change your market somewhat so you need to really think about that.

 

[boomtown]

You can do it for cheaper if you are very aggressive on price in the furniture stores.

Go in and ask them for what they are having trouble moving - what do they want to get rid of etc. I have picked up plasma TVs for $400 this way.

 

[vbplease]

If jointly held, you can write off $300 each - so washing machines etc were written off in first year.

Pushka, can you explain that a bit more?
Not sure what is held jointly, where $300 comes from, and how a washing machine valued at say $500/600 can be written off over a year?
Cheers.

 

[Pushka]

Individuals can write off $300 per year per item (unless it is a set, like dining chairs). If two people own a property, then any item is split between the two owners. So a washing machine of $600 = $300 each in the claim = full write off in the one year. The same concept also applies to the Low Value Pool, which means you can write those off quicker too.

As Boomtown suggests, if you go to the same electrical supply for all appliances you can bargain relentlessly. From the shop price, buying a Fridge, TV, washing machine/dryer, vacuum, kettle, microwave, dvd home theatre etc, the price reduction I got meant that LCD TV was basically free. They also threw in free delivery and everything was delivered at once!

 

[MIZBUF]

I have had the following experiences in renting furnished apartments. First was absolute high end in Sydney centre, Agent questioned my not supplying t.v, DVD- I replied 'not included" and suggested Tenant can hire electronics and obtain what suited him personally. had no trouble getting a tenant-Have just rented another - smaller apt -inner city Sydney- which I self manage Here too I did not include electronic goods - no probs obtaining a tenant . You might save yourself the hassle of dealing with electronic repairs and adjustments by just hangin tough if rest of apt looks good as I did.Furniture is "designer" but bought smart- These lettings usually go to someone who has been T/fered to work here from O.S. trust all goes well 4u

 

[The Judge]

A good tip is to buy crockery that can always be replaced one peice at a time when the tenants break it. The best brand I find for this is Maxwell and Williams white basics.

 

[vbplease]

So a washing machine of $600 = $300 each in the claim = full write off in the one year. The same concept also applies to the Low Value Pool, which means you can write those off quicker too.

Interesting, I didn't know they could be depreciated so quickly

Another point - I was told when doing the deprec. schedule for an apartment, the common areas such as gym, pool, lobby etc can be included as well? Can anybody confirm this?

 

[Pushka]

Another point - I was told when doing the deprec. schedule for an apartment, the common areas such as gym, pool, lobby etc can be included as well? Can anybody confirm this?

Absolutely, also the lift, - anything to do with 'common ground'. A good depreciation report will always contain these.

 

[Buzz]

I looked into renting out a terrace funrnished in Inner West.

I offered it furnished with the plan that if anyone wanted it I would go get the furniture, no-one did. However I decided if I was going to do it with white goods and electronics then the safest way would be if the tenant rented in their name. A benefit was if it broke down radio rentals would replace and I would not have to respond to fridge noises questions.

The reason for this- I could not get with any conviction a comment from any insurer that if someone used a toaster bought and owned by me and electrocuted themselves would I be liabile.

Hence in the end it was good the decision was taken out of my hands.

Anyone consider this as a risk?

Jane

 

[boomtown]

From my Suncorp "Investor Home and Contents Insurance" PDS:

"when you insure your Contents in a unit we cover your legal liability to pay compensation for death or bodily injury to other people or loss or damage to their property resulting from an incident which happens in connection with you owning the unit at the insured address and in the unit or in the common areas of the home unit building"

Thats good enough for me.

 

[Pushka]

Thanks Boomtown for checking. It made me think for a bit.