2013 Autumn

Refurbishing Properties
Are you the owner of an investment property that has seen
better days? It may be time to think about refurbishing your
property to maximise your potential income.
Refurbishing your investment property has many benefits
beyond the pure cosmetic. A well designed, well maintained
refurbishment can increase the immediate rental value of
the property, impact the quality of tenants you attract, and
influence the value of the property if you decide to sell.
Whilst refurbishing may seem daunting, with large upfront
expenses, it doesn’t have to cost a fortune. Simple changes
such as new light fittings, carpet or a fresh coat of paint, are
affordable and are the best ways to add quick value to your
property. Similarly, giving your kitchen or bathroom a quick
facelift with new doors and handles can drastically change
the look of a room.
In addition to increasing the rental value of your property,
a well presented & well maintained property will not only
increase the your rental value, more importantly it will
impact on the quality of applicants you receive and also can
eliminate lengthy vacancy periods between tenancies.
Regardless of the size of your refurbishment project, any
expenses relating to updating your investment property not
only increase the property’s value, but also increase your
depreciation allowances, meaning that you can claim back
on expenses in the future.
Before
Jessica Brincat
Property Consultant
Tower & London
After
Depreciation
Almost 80% of property investors (www.bmtqs.com.au)
are missing out on thousands of dollars in depreciation
deduction from their rental property. In the current
economic climate, it is important for the investors to obtain
the greatest return from their investment property.
There is a common misconception that only new properties
are eligible for depreciation. This is not the case. Whilst
it is true that new properties attract higher returns
of depreciation, older properties can produce attractive
returns also. In fact, in 99% of cases (www.austtaxonline.
com.au), a deduction of some tangible value is attainable.
As a building gets older and items within it wear out, they
depreciate in value. The ATO allows Property Investors
to claim a deduction related to the building and plant and
equipment items it contains. This deduction essentially
reduces the investment property owner’s taxable income
– they pay less tax!
All ATO specified plant and equipment items as well
as building write-off allowance (where the building qualifies)
can be claimed. Plant and equipment items are basically
items that can be ‘easily’ removed from the property
as opposed to items that are permanently fixed to the
structure of the building. Plant items include mechanically
or electronically operated assets, even though they may
be fixed to the structure of the building. Some examples of plant
and equipment items include: hot water systems, carpets,
blinds, ovens, cooktops, rangehood, garage door motors,
air conditioning, and free standing furniture. The building
write-off allowance is based on historical building costs
of the building and includes the bricks, mortar, walls,
flooring, wiring etc. From the date of construction
completion, the ATO has determined that any building
eligible to claim depreciation has a maximum effective life
of 40 years. Therefore, investors can claim up to 40 years
depreciation on a brand new building, whereas the balance
of the 40 year period from construction completion
is claimable on an older property.
Sophie Wang
Accountant
Tower & London
What can Tower & London do for you?
Executive Leasing
The main thrust of the business is its leasing department. The majority of the residential leases are negotiated
to company executives, general managers and diplomats. The properties leased are middle level to exclusive
apartments, most with prime harbour views. Many major Australian and international companies have entered
into leases with Tower & London.
Property Sales
Apart from considerable private treaty and auction experience Tower & London assist in decorating the property
for sale or auction in order to realise the highest possible sale price. The sale price often exceeds their valuation.
Tower & London have sold every property listed within the exclusive agency period.
Property Management
Our property management team is focused on delivering the highest quality of customer service and in turn
ensuring our clients’ interests are a top priority. At Tower & London we have a full time Trust Account who is
dedicated to ensuring our clients financial matters are given the attention they deserve.
Property Refurbishment
Tower & London manage small refurbishment projects. Often apartments in prime locations require upgrading
in order to maximise returns and increase owner’s equity. Over the years, Tower & London have accumulated an
efficient team of tradespersons to undertake such projects with high quality and care.
Valuations
Property valuations for any purpose are prepared within 48 hours. Expert advice is provided on many technical
issues concerning property values. Comprehensive feasibilty studies and Discounted Cash Flow analysis (DCF)
are conducted on small to medium developments and refurbishment projects.
Commercial Sales and Leasing
Tower & London has a dedicated commercial department specialising in sales, leasing and management of
commercial offices, industrial and retail premises. Our clients love the prompt efficient service they receive as
we treat them like a big fish in a small school. No property is too big or too small, from small office suites to large
industrial facilities. John Wood can tailor a sales or leasing campaign to put the focus on your property.
6 7