roof & tenants

[neeko]

hey all.

just a quick Q im about to get the roof restored it'll cost roughly $3000, now im thinking

• should i pay for this
  • 
    or
  should it come out of the tenants rent?

?

i should pay for it, so i can keep getting the rent as an income else i have to fork cash out for the loan theres a leak in the roof that needs to be fixed.

do you get it under urgent repairs at all ?

can someone advise me what would be best.
Nick.

 

[mrsdawnrazor]

What do you mean - come out of the rent? You are the landlord so you are responsible for the upkeep of the property. Where the cash comes from to pay it is irrelevant.

If you mean should the tenants pay - then no.

 

[Ideo]

Ummm...

What? Do you mean take the money out of the rental cashflow you have, or make the tenant pay?

If the later, I really don't think you will have much luck with that.

 

[neeko]

so in theory the roofer will give me the bill then i'll pay for it correct? the roof is leaking, isnt that under a "urgent repair"?

 

[Ideo]

Yes. The roofer will give you a bill.

 

[Scott No Mates]

so in theory the roofer will give me the bill then i'll pay for it correct? the roof is leaking, isnt that under a "urgent repair"?

It isn't an urgent repair if you are already aware of it. As pointed out previously, you are responsible for the upkeep of the premises, if you don't the tenant may seek to break the lease.

If you decide that the tenant should call the roofer and have this fixed as an urgent repair, they are only able to fix the leak, not replace the roof. They will send the bill to you. If the tenant decides that they can't be bothered to arrange the repair the waterleak may cause other damage to your property which may not be covered by insurance as you have not sought to minimise the loss/damage.

 

[JacM]

Hi Nick

I suspect that you're either a relatively new landlord, or that you've not encountered repair bills before so the flow of money for paying for it is new to you.

As mentioned, it doesn't matter whether the money to pay for the roof comes from your bank account, or from the rent or elsewhere.

Generally your property manager can pay maintenance or repair bills from the rent - and pay you any leftover money on rent roll day. However, if the bill exceeds the rent proceeds that the property manager is holding for your property, they might ask you to pay the bill directly, or transfer the amount owing for the bill to the property manager so they can pay it on your behalf.

It doesn't particularly matter which option you choose. The only difference might be if the roof repairer takes credit card and you can get frequent flyer points by paying for the repair on your card.

The treatment of the bill from a taxation perspective will be the same regardless of which payment method you choose.

Hope this helps!

 

[jaspn]

Good post JacM. The question wasn't very clear but I think you identified what the op was asking and answered well.

 

[neeko]

Hi Nick

I suspect that you're either a relatively new landlord, or that you've not encountered repair bills before so the flow of money for paying for it is new to you.

As mentioned, it doesn't matter whether the money to pay for the roof comes from your bank account, or from the rent or elsewhere.

Generally your property manager can pay maintenance or repair bills from the rent - and pay you any leftover money on rent roll day. However, if the bill exceeds the rent proceeds that the property manager is holding for your property, they might ask you to pay the bill directly, or transfer the amount owing for the bill to the property manager so they can pay it on your behalf.

It doesn't particularly matter which option you choose. The only difference might be if the roof repairer takes credit card and you can get frequent flyer points by paying for the repair on your card.

The treatment of the bill from a taxation perspective will be the same regardless of which payment method you choose.

Hope this helps!

correct. i wasnt unsure how it works as its my first time being a landlord.

the roof has been restored now so i can breathe a little easier, as for tax time if i can claim it as it "needed" to be repaired mortar falling out of ridge capping and a leaking roof that would be sensational, but of course id have to speak to my accountant about that.

Nick

 

[Dazz]

....it'll cost roughly $3000....mortar falling out of ridge capping and a leaking roof......its my first time being a landlord

Yes, it sounds like it.

 

[james start]

Yes, it sounds like it.

These 2 aren't related to u dazz by any chance?

http://m.youtube.com/watch?v=010KyIQjkTk

 

[neeko]

Yes, it sounds like it.

blowing it out of perportion there......

 

[vaughan]

correct. i wasnt unsure how it works as its my first time being a landlord.

the roof has been restored now so i can breathe a little easier, as for tax time if i can claim it as it "needed" to be repaired mortar falling out of ridge capping and a leaking roof that would be sensational, but of course id have to speak to my accountant about that.

Nick

Since you've just purchased the property, this is more likely to be an "initial repair" so it goes onto the cost base, and is not an immediate deduction.

 

[Ideo]

blowing it out of perportion there......

Everyone has to start somewhere. A resource like this is a great place for questions. Unfortunately some members feel it is their right to sneer condescendingly at anyone who doesn't have a huge portfolio.

But, the vast majority are helpful.

Don't let that mentality put you off. My life would have been a whole simpler if I knew about this place when I started.

 

[neeko]

Since you've just purchased the property, this is more likely to be an "initial repair" so it goes onto the cost base, and is not an immediate deduction.

But it can cause structal damage to the house if not repaired....

 

[skater]

But it can cause structal damage to the house if not repaired....

It is still an initial repair though........

 

[neeko]

Ive owned the house for 2.5 years and i was informed about the leak. Then it was fixed then it started leaking again... To me thats an urgent repair even the roofer has written it to be a full repair cause its had that many patchup jobs.

to me thats an urgent repair.

 

[vaughan]

Ive owned the house for 2.5 years and i was informed about the leak. Then it was fixed then it started leaking again... To me thats an urgent repair even the roofer has written it to be a full repair cause its had that many patchup jobs.

to me thats an urgent repair.

It matters not whether or not it's urgent, for whatever meaning of urgent you want to use.

The deductibility of the repair depends on whether the repair to fix wear and tear caused WHILE generating an income. Not TO generate an income.

 

[neeko]

heres a email from an accountant

The Roof restoration is an interesting one, if it is a repair back to its original state then you can claim it usually, if it is a capital improvement then you have to depreciate the expenses. The other issue is the ATO does not like repairs within the first 12 months of a rental property as the tenant has not had time to break anything yet.