maintenance $$$
- Thread starter voodoo
- Start date
The answer is that "it depends"
It depends on the age of the house - older houses might need more maintaince.
It depends on the repairs - if you hire tradespeople, they can cost a lot.
Does the deal still work for you with that size maintence? If so, don't worry. If not, worry.
So long as you have accurate records for all the things that where done, don't fret over the ATO. Accurate records mean the audit trail is clear.
Jas
It depends on the age of the house - older houses might need more maintaince.
It depends on the repairs - if you hire tradespeople, they can cost a lot.
Does the deal still work for you with that size maintence? If so, don't worry. If not, worry.
So long as you have accurate records for all the things that where done, don't fret over the ATO. Accurate records mean the audit trail is clear.
Jas
Voodoo,
I have 7 IP's, the longest held one is 7 years as a rental, next longest is 2 years, the rest are between a few weeks and 2 years.
My experience is in relation to how much, is that rough as guts if you allow the same amount as your rates bill, this is not a bad amount to allocate on average.
Some IP's have been more than that, and some less, so it is not a bad average. Remember to allow some years will be lean and others fat with maintenance costs.
In terms of allowable claims, I dont know the ruling on this - have to check with ATO or others on this site might know. It would seem logical that from an audit point of view if you maintain excellent records and can demonstrate that any maintenance costs are directly related to the proper and adequate ongoing functionality of the property to maintain it as in reasonable condition then I cant see how limits would apply (unless it is an improvement.
ANy other ideas out there?
Cheers,
Tim
I have 7 IP's, the longest held one is 7 years as a rental, next longest is 2 years, the rest are between a few weeks and 2 years.
My experience is in relation to how much, is that rough as guts if you allow the same amount as your rates bill, this is not a bad amount to allocate on average.
Some IP's have been more than that, and some less, so it is not a bad average. Remember to allow some years will be lean and others fat with maintenance costs.
In terms of allowable claims, I dont know the ruling on this - have to check with ATO or others on this site might know. It would seem logical that from an audit point of view if you maintain excellent records and can demonstrate that any maintenance costs are directly related to the proper and adequate ongoing functionality of the property to maintain it as in reasonable condition then I cant see how limits would apply (unless it is an improvement.
ANy other ideas out there?
Cheers,
Tim
Naturally it depends on the age and condition of the house and the level of wear-and-tear created by the tenants. However I calculate 1% of the value of the house (not the land) for a new house and 2% for a older house as reasonable.
Thus if your house is older 10 years and its a 3br house worth about $120K to rebuild then $2400-$2500/year would be average. Expect that in any one year to be less, but some years you will be unlucky and the HWS, aircon, pool heater, dishwasher and stove all will breakdown !
For a newish unit worth $100K (not the land) then $1000year would be reasonable.
In the cash-flow positive vs negative gearing debate we need to also consider that it costs about the same to maintain a 3br Brick house in Artamon (expensive-ish Sydney north shore area) as it does for the same kind of house in Dubbo. So if we considering the holding costs of $1M of IP, repair and maintenance will be much more going down the high yeild path...(because a high % of the $1M will be in the "not-land" buildings and plant ).
Thus if your house is older 10 years and its a 3br house worth about $120K to rebuild then $2400-$2500/year would be average. Expect that in any one year to be less, but some years you will be unlucky and the HWS, aircon, pool heater, dishwasher and stove all will breakdown !
For a newish unit worth $100K (not the land) then $1000year would be reasonable.
In the cash-flow positive vs negative gearing debate we need to also consider that it costs about the same to maintain a 3br Brick house in Artamon (expensive-ish Sydney north shore area) as it does for the same kind of house in Dubbo. So if we considering the holding costs of $1M of IP, repair and maintenance will be much more going down the high yeild path...(because a high % of the $1M will be in the "not-land" buildings and plant ).
