The Time has Finally come!

Hi All

About to finally make the move from Owner Occupied to IP on our First Property.
I'm trying to come up with an accurate in and out of the costs involved / Processes involved.
Here's my list of things sofar.

1. Depreciation Schedule ( 900 from depreciator.com.au)
2. Accountant consultation fees for Basic Structuring moving forward( have no good accountant yet, can anyone recommend some-one Brisbane West)
3. Property Management Fee's ( Filled out Pure-rentals online request but haven't heard back, is a flat fee Property management as good as it sounds?)
4.Body Corp/Council Rates, have just read that Water can be charged back to tenant if the Unit is inspected and certified?
5.Landlord Insurance( looking at EBM for this, any idea's how much 3 bed 2 bath west Brisbane would cost?) Do I need any other forms of insurance?


I'd like to get as much right now as I've found things are always harder to change down the track.

Also what sort of Deposits are required for a second IP.
The Current IP purchase cost was 380k we owe 320k on the loan, so if property hasn't devalued would the bank consider 60k equity?
How would we be able to use as little deposit as possible without cross collateralization
Thanks :)
 
Hi Zimby

Accountants are great for structuring tax wise but are not legally allowed to offer advice on structuring for things like asset protection. I can't think of anyone on the forum who is in Brisbane off the top of my head but it has been a crazy week and I might be having a caffeine mind blank. There are a wealth of interstate property savvy accounting guys on here.

I have attached what we charge and what's included in our structuring packages so that you can get an idea, I don't check out others prices per se but I think they are fair, they are definitely discounted from our hourly rate anyway.

Recommend that you find accountants and lawyers that have done property developing and investing themselves, I can tell you from the law side at least, what they teach you at uni is really only the nitty gritty contract law and they don't even cover the the commercial, financial side of things.

The great thing is that you are getting the right advice at the start, it is very hard and expensive to fix things later. Good luck and if you have any questions ask away

D
 

Attachments

  • Property Bundle Kits.pdf
    374.7 KB · Views: 294
Also what sort of Deposits are required for a second IP.
The Current IP purchase cost was 380k we owe 320k on the loan, so if property hasn't devalued would the bank consider 60k equity?
How would we be able to use as little deposit as possible without cross collateralization
Thanks :)

General rule is 10% deposit needed + stamp duty as a minimum.

You may have 60k equity but the banks won't lend you 60k, not even close. They may lend you 90% of your property's value. So minus what you currently owe that would give you about 20k out. Of course if the valuation is better than $380,000 then you can get more out.
 
Agree with Wandering, you need to get a valuation before you move out. And the rest of the list looks good.

Probably should deal with one property at a time and get through the first one as I am sure it will be a learning experience for you!

Good luck!
 
Wow, thanks all for the quick responses.
Lots to Think about.
Is it best to organise a bank Valuation or an independent valuation?
Is it worthwhile getting income protection?
If the first property is renting and CF neutral How will the banks treat this, IE will I require the same sort of Income to finance the property as the original.
 
Is it best to organise a bank Valuation or an independent valuation?..

If the first property is renting and CF neutral How will the banks treat this, IE will I require the same sort of Income to finance the property as the original.

A bank valuation is done by a licensed valuer anyway so two birds with one stone.

As for what the banks say you can afford, hard to say without knowing your entire situation as it depends on the lender etc.
 
Hi All

3. Property Management Fee's ( Filled out Pure-rentals online request but haven't heard back, is a flat fee Property management as good as it sounds?)

I am not one to speak specifically about businesses, but in general, cheapest is not always best.

4.Body Corp/Council Rates, have just read that Water can be charged back to tenant if the Unit is inspected and certified?

Your council rates may increase - in Brisbane, the rate charged can change if the property become an investment. It goes up, not down.

Full water consumption can be charged to the tenants if the property meets criteria - most importantly it must be separately metered - if the back of the bill says anything about share meter or 'your share of consumption' - then you cannot charge the tenants.

If it is separately metered - all fixtures and outlets must be water efficient. Most newer properties comply automatically, but you generally would be best to get a plumber to do this. Many companies specialise in these waterwise tune-ups


5.Landlord Insurance( looking at EBM for this, any idea's how much 3 bed 2 bath west Brisbane would cost?) Do I need any other forms of insurance?

I would also consider Terri Scheer. Their premiums are $299 p/a per property. It is not dependent on the type of property, area (it is by state, but not postcode), or number of claims. I am fairly sure EBM is similar, but our office has not used EBM for several years so things may have changed.

Also Consider:

Smoke Alarms - There is another thread going right now about this. Please pay Smoke Alarm Solutions the $79 annual fee to ensure your property continues to comply with the smoke alarm legislation in QLD.

Maintenance - I generally recommend budgeting around 3-5% of gross rent for maintenance and repairs. You will not of course have to outlay this amount each year - but eventually your oven/air conditioner/hot water system/dishwasher will pack it in - and the best tenants and Property Manager can't change that.
 
Hi All

About to finally make the move from Owner Occupied to IP on our First Property.
I'm trying to come up with an accurate in and out of the costs involved / Processes involved.
Here's my list of things sofar.

1. Depreciation Schedule ( 900 from depreciator.com.au)
2. Accountant consultation fees for Basic Structuring moving forward( have no good accountant yet, can anyone recommend some-one Brisbane West)
3. Property Management Fee's ( Filled out Pure-rentals online request but haven't heard back, is a flat fee Property management as good as it sounds?)
4.Body Corp/Council Rates, have just read that Water can be charged back to tenant if the Unit is inspected and certified?
5.Landlord Insurance( looking at EBM for this, any idea's how much 3 bed 2 bath west Brisbane would cost?) Do I need any other forms of insurance?


I'd like to get as much right now as I've found things are always harder to change down the track.

Also what sort of Deposits are required for a second IP.
The Current IP purchase cost was 380k we owe 320k on the loan, so if property hasn't devalued would the bank consider 60k equity?
How would we be able to use as little deposit as possible without cross collateralization
Thanks :)

Hi Zimby

The cost of the insurance will depend on whether it is a house (needing building, contents and landlords), or simply a unit/townhouse (needing contents/landlords). To get a quote you can go to http://www.rentcover.com.au/application/index.php and it will ask you a few relevant questions, takes less than 2 minutes.

Any questions feel free to let me know.
 
5.Landlord Insurance( looking at EBM for this, any idea's how much 3 bed 2 bath west Brisbane would cost?) Do I need any other forms of insurance?

I would also consider Terri Scheer. Their premiums are $299 p/a per property. It is not dependent on the type of property, area (it is by state, but not postcode), or number of claims. I am fairly sure EBM is similar, but our office has not used EBM for several years so things may have changed.

The $299 you are referring to is providing it is a unit/townhouse and therefore not requiring building insurance. The comparable EBM product is RentCoverUltra and would be $285 in Queensland.
 
Wow, Never Expected so many Replies.
Just by Posting this I stand to save Over $1000 from reccomendations.
Also hope to Support Local Small business where possible :)
 
Hi Zumby

I can highly recommend Depreciator for depreciation schedules, I have used them for my four properties and updating the schedules is also very easy.

I use Budget Smoke Alarms as they charge $49 per annum.

You don't say where your property is located but I use Lu Bracher from Property Management HQ to manage my properties and she does an excellent job. She covers from Caboolture to Pimpama and out west, check her website to see if your property is in her area.

For property maintenance I highly recommend Ken Maguire of Hire A Hubby Beenleigh but if your property isn't near Beenleigh I would try the local Hire A Hubby out.

I am in the process of changing my Landlord Insurance but EBM look the best. Be careful as some insurance companies advertise it is Landlord insurance but the cover is because you are a landlord but doesnt cover loss of rent or damage.
 
Scott has done all my depreciation reports also. Very good.
You can only claim water usage if the unit is individually metered (not usually the case).
 
Back
Top