What I learnt ? Call Depreciator, always ask questions.

[Sasi]

Hi,
Have been a forum reader for many years now, intimidated by the wealth of knowledge so don?t post much at all.

However I did want to share my experience that may help someone else.

Recently we did a triplex development in Perth, first one, went well, all tenanted but still I am still recovering . Lessons learnt trying to project manage a Builder?that is a whole other post.

My biggest lesson in the build is to continuously ask questions. A prime example of this is my experience with the scrapping schedule.

We purchased a property with an older house that the previous owner had renovated. I contact Scott (the amazing) immediately as we were tenanting the property. He put together the Depreciation Schedule.

When we decided to go ahead with doing a development he informed me about the possibility of a Scrapping schedule (claiming the residual value in the capital works and assets being disposed of).

I got very excited! It was a significant amount.

Come tax time he wrote a supporting letter for me.

Our Accountant while extremely supportive and researched this intensely said it was not possible to claim this. While tax is most certainly not my area of knowledge and we definitely did not want to do anything that was not above board, the information I was getting was conflicting?so I kept asking questions.

I spoke to another amazing SS forum person (Paul at PFI ? thank you) and he also provided his opinion of which I passed to our Accountant.

End of day with the support of Scott, Paul and our Accountant, we were able to claim the scrapping schedule due to the property being rented before and after.

While I am unable to provide the tax details, the rulings etc, what I wanted to share was to always ask questions and to seek this advice BEFORE you commence anything if possible. In my case with this build it was ?you don?t know what you don?t know? and I just hope this may help someone else.

There are people on this forum that I wish to thank for all their assistance ? Scott at Depreciator ? you are a good soul ? thank you. Super mortgage broker Shahin ? thank you for trucking through everything. Three amazing Perth based woman who I wont mention names but you know who are ? I am in awe of you! One in particular, you made it happen and I am forever grateful.

 

[wylie]

Hi,
Have been a forum reader for many years now, intimidated by the wealth of knowledge so don?t post much at all.

However I did want to share my experience that may help someone else.

Recently we did a triplex development in Perth, first one, went well, all tenanted but still I am still recovering . Lessons learnt trying to project manage a Builder?that is a whole other post.

Don't be put off posting or asking questions by what you perceive as the wealth of knowledge here. We don't know what we don't know.

Personally, as we have lodged a DA to build four townhouses I would love you to put up a thread about your development. I waver between "too hard, just sell the land with the DA" and "I really want to do the build".

Hearing first hand of what worked, what didn't, lessons you learned would be a huge help for those of us who are contemplating dipping toes in unknown waters.

 

[Sasi]

Don't be put off posting or asking questions by what you perceive as the wealth of knowledge here. We don't know what we don't know.

Personally, as we have lodged a DA to build four townhouses I would love you to put up a thread about your development. I waver between "too hard, just sell the land with the DA" and "I really want to do the build".

Hearing first hand of what worked, what didn't, lessons you learned would be a huge help for those of us who are contemplating dipping toes in unknown waters.

Thank you Wylie,

It is indeed a big decision to "jump in". We have another site that is awaiting rezoning and after doing the first one, I am not closed to the idea of just selling once the changes are in place (in a way the first development and not knowing was good).

Over in the west coast, we don't have such a strong culture of selling with DA so that wasn't an option for us. For you, I would just say look at the numbers, if it is fairly close then it may not be worth the effort and sell with DA. If it is significantly different, then it is time to weigh up all the other factors like family, work etc.

I was very fortunate to have a great hubby that said "stop working in an environment that is making you crazy and go do what you want". Therefore that allowed me the time to keep asking questions and that would be the biggest thing I gained from the experience.

Another example is a Utility wanted to charge us approx $16000 more than what I thought it was going to cost. Yes, that much more. So again, I had the time to sit on the phone, bug them every day, challenge their calculations and we ended up saving that money.

Choose your Builder wisely if you go ahead. Again it is one of those things you don't know until you get into it. While happy with the end product, our Builder had taken on too much at the time. Unfortunately for me, I get extremely frustrated with constant lies and I can't tell you how many times I screamed on the inside but had to let them think I didnt know they were telling me stories so I could continue to work/ "assist" them moving to the end result. I had to be far more involved than I think is "normal".

Also - you cannot take enough photos if the site is in driving distance for you. At every stage! We had neighbour A threaten to take a sledgehammer to the site for denting his father's gutter....I saved the Builder time, money and court by having photos of the dent existing prior to demo and not changing through to brick work. Also I had to take neighbour C to court and I turned up with 70 photos - I didnt realise how important they were at the time.

The last big ones....Site survey .....for us it ended up being worthless. Obviously required for design however so many incorrect things on the survey cost us approx $12000 extra. I know you are past that stage now but look at all of the boundaries, what is on the neighbours property and if that is going to affect any boundary walls.

It is not all doom and gloom. I am very proud of what we have achieved. I love design so actually really enjoyed the selections process. Now we have very happy tenants in very glam villas while we are fixing leaking roofs, falling down ceilings and stumps in our old fibro house....all part of a long term plan to retire happy.

Keep us updated with your decision

 

[Richard Feynman]

"Always ask questions" is great advice.

It's good that your accountant was receptive to evidence. I take it they don't specialise in property stuff?

 

[Sasi]

"Always ask questions" is great advice.

It's good that your accountant was receptive to evidence. I take it they don't specialise in property stuff?

Hi Richard,

The Accountant doesn't specialise in property as such but is certainly instilling faith of his overall knowledge. It was our first year with him and he has done so much to "clean up" our books, set up correct structures etc.

Our previous Accountant was telling us things that again...from continuously asking questions, we were not comfortable with.

While sticking with the old Accountant would have been to our benefit, our research and instinct to ensure we are doing the right thing/accountable for our actions at all times led us to move.

When we raised the Scrapping Schedule with the new Accountant he went all out. Called on colleagues, paid for consultancy with others (didn't charge us) and tried to get there for us. He was always open to any further information I had. To have an Accountant that operates by the book and not ego is a good sign of things to come I hope. I agree with you - the fact he was so receptive to evidence was brilliant. The evidence people on this forum provided is ever appreciated.