rental property benefits ???

[Guest guest569]

As some people are aware on here we have built a 4 bed 2 bathroom investment property. It has always been the plan to landscape and complete the house and then sell for a small taxable profit. Unfortunately the housing market is at a low so we are thinking of renting it out for 12 months unfurnished until the market picks up again. I know this will half the amount of tax i eventually pay.

Everyone i speak to tells how great it is to have a rental property. Tax deductions and depreciation ect ect ... but i have just spoken to an accountant and he tells me it will only give me roughly $6k tax annual income ( which would just be our annual contribution back )??? Does this sound about right to all the property people on here ???

[Guest Guest75]

As some people are aware on here we have built a 4 bed 2 bathroom investment property. It has always been the plan to landscape and complete the house and then sell for a small taxable profit. Unfortunately the housing market is at a low so we are thinking of renting it out for 12 months unfurnished until the market picks up again. I know this will half the amount of tax i eventually pay.

Everyone i speak to tells how great it is to have a rental property. Tax deductions and depreciation ect ect ... but i have just spoken to an accountant and he tells me it will only give me roughly $6k tax annual income ( which would just be our annual contribution back )??? Does this sound about right to all the property people on here ???

 

Yep,that's about right.

You will have maintenence and stuff to come off that perhaps.

 

It's great if you are earning loads and you can offset losses against tax paid.

 

So $6k is what is left after mortgage and stuff??

 

Not exactly an earner and what if property prices drop???

 

You need to think carefully about your next move Bob.

 

If you incur losses by any means you should be able to offest .

 

Good luck.

[Guest guest569]

but i will have to pay out around $6k to make up the difference in the rent to the mortgage so all i will get back is the same if i'm lucky ??? Is it really worth it ???

[Guest Guest75]

but i will have to pay out around $6k to make up the difference in the rent to the mortgage so all i will get back is the same if i'm lucky ??? Is it really worth it ???

 

Sorry I see what you mean now.

So running at a 6K loss??

That can be offset against your tax,which is negative gearing. The taxman pays it So you come out quits. Great in a rising property market as you make profit at the end when you sell.

 

You have to decide if you can manage with 6k coming out of your cash flow during the year though. You can't cut your nose to spite your face??

 

Tough call Bob.

[Guest guest569]

might just have to bite the bullet and furnish it for short term. Then become a millionaire like you Russ .

[Guest Guest75]

might just have to bite the bullet and furnish it for short term. Then become a millionaire like you Russ .

 

:biglaugh:Dunno about that mate,took a long time to build up.

 

Next week certainly not profitable - $1200 in repairs and renewals to do. That's on top of some pretty hefty service bills due to the cold weather.

 

You really need to think about your next move chief.

 

The first loss is the best loss if you decide to clear.But at least your family will be safe and you live to fight another day in a rising market.

 

 

I've had some stinkers over the years, Lost 50K GBP a few years ago on one property we cleared in the UK - but the exchange rate jumped for a few days and cleared the loss - was I lucky or what?

 

We had to clear a unit here a few years ago,some bad thing were happening there.

 

 

Seriously,you might need to forget pride and the work you have put in,the experience is invaluable.

 

Not being a smart arse - just my view.

[Guest guest569]

going to knock $10k off. Its priced to sell. if in a month no takers then i'll rent it for 12 months . Thanks for the tips Russ.

[Angela]

We met a financial advisor recently about rental property investments....good foot in the door for us, negative gearing & all that, but you do have to think about it as house sales are slowing down but if in the right area for the right rental return, for us a long term investment plan/super ann. its a start

PS good luck with the house sale

[Guest Nick11]

We bought a rental last year. After the initial outlay it's not been too bad financially at all. We have an excellent tenant, who pays on time and looks after the house , which is a god send. Initially we used an agent, but do it ourselves now, which saves a fortune. We decided right from the beginning we were in it for the long haul..so the property market and the predictions of boom and burst don't really bother us. It's what the property will be worth in 20 years time that concerns us.

The tax man has been very nice to us. We are now looking for another one...just got to find the right house in a good location whereby the rental returns are good compared to the mortgage outlay. Shouldn't be hard to find