purchasing or renting furniture?

[MFG]

hi,

i have an IP ready for rent in a few weeks. i want to furnish the property. here is my question

should i buy them or rent them?

if i buy them say for $1000, my cost will just be $1000 and i get depreciation over that $1000 of furniture of the life span.

with rental furniture, since it is a monthly incurred cost say $100 each month over 12 months, during tax time, i will be claiming $100 x 12mths = $1200, all in the same financial year. with the rental furniture, am i still able to do depreciation over the $1000 worth of furniture? plus, if i have the option to puchased these rental furniture after the 12th month of renting at a cost of additional $100, how will the depreciation be, $100 or $1000?

thanks
Scott

 

[RumpledElf]

I wouldn't rent. There's a minimum term of a year for most rental places, so you've have to be in it for that time and if you skip out earlier you still need to pay out that full year.

Have a good read of the terms and conditions at the various rental places first, find out how it works when the person doing the renting isn't the person who is using the stuff. How does insurance cover damage? Theft?

I'll be renting out a furnished house soon and we'll be buying everything. Mainly because it is such a huge order of magnitude cheaper and we're actually trying to make money here

Have you seen what they charge for furniture rental!!

 

[Ed Barton]

last time i looked renting worked out a lot more expensive and if you want to buy the rental furniture at the end it's not really much cheaper than buying new.

 

[marg4000]

If you rent furniture and claim the rental costs, you certainly won't be able to claim depreciation as well as you don't own the asset and it would be double dipping.

Should you then purchase the furniture for $100, that amount will be depreciable.

I would do thorough research before renting furniture or buying furniture to make sure that there is a demand for a furnished IP of the type and location of yours.
Marg

 

[MFG]

thank you all,
quick conclusion here... no rental.

cheers,
Scott

 

[reeco]

Bit of creative thinking required.

How abouts purchasing the items then renting them to yourself?? I work on Barrow Island and thats what the big companies do. They setup shell company and rent(at exorbant rates) back to themselves. Its slightly on the sly but it works.