Renting out a Brisbane CBD property is just like any investment, there are steps you can take to nurture your investment and ensure it has the best possible chance to perform!

Like the title ‘land-lord’ suggests you are the lord of the land which comes with certain responsibilities. Think of it like this, your CBD apartment is your business and the tenants are your employees. The better you treat them, the more respect you will gain and the harder they will work to look after you – and ultimately your investment.

After all, the aim of the game is to retain quality tenants, not work against them. The better the tenant, the less work for you. It is a simple equation. In laymen’s terms you need to be a good landlord. So how do you become the best ‘lord of the land’ you can possibly be and in turn, set your investment up to achieve the best performance possible?

Here are our three golden rules to help maximise the return on your inner-city rental:

1.     Communication is key

Like any solid relationship, communication is key; communication between yourself and the tenant (if you are self-managing the property), communication between you and your property managers (if you have appointed a firm to do this for you) and also, communication between that firm and your tenant.  

Make sure you are clear on all expectations when it comes to how you expect the property to be kept. It is also important to ensure all agreements are documented in writing so everyone is on the same page and there are no nasty surprises later on.

2.     Attract quality tenants

The ultimate aim is to attract good quality tenants who will treat your property as if it were their very own. A dream for any investor! Quality attracts quality. So, ensure your property is well presented and looks desirable, and of course don’t bypass any reference checks or you may regret it next time you do an inspection and find the tenants are not treating your property with the love and respect it deserves. 

Another key to attracting those good quality tenants is to buy in the right area.  Quality areas attract quality tenants so look for a property in a great location, close to cafes, restaurants, public transport and easy access to commercial centres like the CBD.

3.     Employ a property manager

This rule is not a must as you can opt to go it alone and manage your tenants without a property manager, but we do highly recommend employing a qualified property manager to act as a middle man. While it will cost you a percentage of your rent to hire a property manager, implementing their expertise is more likely to in fact maximise your rental returns.  They can save you quality time by minimising your responsibilities like taking care of all that nasty paperwork and managing inspections – also saving you money and headaches in the long run! The trick is to do your research and find a property manager that has a great reputation and solid experience when it comes to the Brisbane CBD market.  

For the ultimate in professional advice when it comes to purchasing the right investment property for you contact Hannah Schuhmann on 0419 782 133.

This week we have sought expert advice from our friends at BMT Tax Depreciation for tips on how to boost earning potential when it comes to your investments:

Property investors can claim thousands of extra dollars on a property by maximising depreciation deductions.

According to the Managing Director of BMT Tax Depreciation, Bradley Beer, research suggests 80% of property owners are missing out on thousands of dollars in property depreciation deductions which can mean the difference between turning a negative cash flow investment into a positively geared asset.

“When looking at units, an investor could potentially claim between $5,000 to $10,000 in depreciation deductions in the first full year,” says Bradley.

This is no small amount, so for an investor wondering what property depreciation is and how they can go about making a claim, we’ll explain.

Depreciation is a non-cash deduction that the Australian Taxation Office (ATO) allows the owner of any income producing property to claim due to the wear and tear over time to the building structure and the plant and equipment assets contained with the property. It is described as a non-cash deduction because the investor does not need to spend any money to be eligible to claim it.

“All investment property owners can claim depreciation, however higher depreciation deductions are usually available on newer properties,” said Bradley.

Owners of new properties are eligible to claim the full deduction on the entire cost of the building structure over forty years. Owners of properties which are not brand new can claim the remaining years.

There are also deductions available for the plant and equipment assets contained within the property, such as stoves, carpets, blinds and air-conditioning units. Deductions for these assets are not dependent on their age, rather the condition and quality of each asset. Plant and equipment assets depreciate based on an individual effective life set for each asset by the ATO.

“Including removable plant and equipment assets can substantially increase the depreciation deductions available for a property investor” said Bradley.

Units generally contain more depreciable plant and equipment. If a unit is new, these assets will generally have a higher value, which will increase the depreciation deductions that will be available for the owner.

In some states, owners of units can also claim a proportion of common property areas within the complex or development that are shared, such as driveways, pools, pool pumps, fire protection equipment and lifts.

To ensure depreciation deductions are maximised this end of financial year, investors are recommended to contact a specialist Quantity Surveyor such as BMT Tax Depreciation. They can compile a tax depreciation schedule outlining all of the deductions available for the life of the property (forty years).

As part of the process of completing this schedule, a depreciation expert will perform a site inspection and take photos of all plant and equipment to ensure no depreciable assets are missed. They will also use their expert knowledge of current depreciation legislation to select the best methods to calculate depreciation to maximise the claim for the owner.

The fee for a depreciation schedule is 100% tax deductible. Investors who arrange a depreciation schedule prior to the 30^th of June can also claim the cost of the schedule when they complete this year’s annual income tax assessment with their Accountant.

For a free over the phone assessment of the likely deductions for any investment property, please contact one of BMT’s professional staff on 1300 728 726.

Article provided by BMT Tax Depreciation.

Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Managing Director of BMT Tax Depreciation. Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia-wide service.

Once again Queensland has proven to remain one of the top destinations for Australians moving interstate. The proof is in the pudding, following on from the latest Bureau of Statistics figures which show that 3190 Australians moved to Queensland in the six months to September.

Comparatively, in that same period, New South Wales continued to lose big numbers interstate; we’re talking 2810 Australians who were looking for greener pastures – that’s almost the same number that moved to Queensland. Similarly, South Australia lost 1310 to moving interstate and, while a smaller number, Western Australia also remained in the negative losing 210 as well.

Looking at these figures it is obvious that Queensland remains to be one of the few Australian states that people flock to, which is (once again!) good news for our local investors. 

More significantly though, Australia’s younger population are the ones that continue to head up north; a strong demographic that Brisbane keeps attracting to its CBD. This consistent injection of youth is one of the main reasons Brisbane’s inner city apartments maintain such an attractive offering for investors now, and in the future.  

However, this isn’t anything new, Queensland has always been one of the leading destinations for Australians moving interstate. What’s new is that while other states reflect a loss in numbers, Queensland continues to grow in leaps and bounds - according to bureau projections, it believes that Queensland will have a population of 8.8 million by 2056.

Reflecting on this recent report, as more young people continue to make the move to Brisbane, it once again proves that CBD apartments are a very attractive  investment with fantastic growth potential. To get on the front foot and take advantage of new opportunities as they arise, contact Hannah Schuhmann on 0419 782 133.

Last week we looked at how observing certain statistics can help you to get the most benefit from your Brisbane CBD investment. We covered several stats worth monitoring, including: (1) median house prices, (2) time spent on the market and (3) what stock is available on the market – all of which play a vital role in understanding current (and historical) shifts in the real estate market.

However, while these are great, they’re not the only figures worth keeping a close eye on. To finish off, this week we are focusing on the following remaining stats; four indicators we feel are imminent when it comes to detecting a shift in the local Brisbane CBD real estate market.

Rental Yields

When it comes to following rental yield figures, it can be a rather interesting exercise. For example, if you witness a drop in apartment rental yields, while the median price for an apartment remains steady, then this may suggest that tenants aren’t paying as much rent. On the flipside, should rental yield figures start to increase this could be a clear indication that apartment stock is low in the CBD for numerous reasons – e.g. more owner-occupiers are entering the CBD market or there has been a rise in the number of people looking to rent in the city and consequently this had driven the price of rental apartments up.

Vacancy Rates

Following vacancy rates provides buyers valuable insight into better understanding the current demand for inner-city rental apartments and how new developments affect the local CBD market. To ensure you get the most accurate information pertaining to local CBD vacancy rate reports it’s really important you know your stuff. This means doing your homework on Brisbane’s CBD to familiarise yourself with seasonal shifts and changes. Doing so will help you understand the makeup of the local CBD area and your investment will be all the more beneficial for it.

Demographic Makeup

Insight into Brisbane’s CBD demographical makeup is certainly something to be aware of before purchasing an inner-city apartment. For example, CBD apartments offer the ideal living space for young professionals… with this information you now have the power to buy an apartment located somewhere in the CBD where young professionals are on the rise. Invaluable info when you think about it!  

Vendor Discounting

As the name suggests, vendor discounting is the amount a seller reduces the listed price of their apartment by. Typically a percentage figure, vendor discounting can tell you a lot about the local CBD market. For example, low vendor discount often indicates competition; put simply the market for CBD apartments is hot. In contrast, heavy vendor discounting is identifiable with a cold market and may suggest that further discounting is on the cards.

So there you have it. That completes our two-part article on How to Detect Market Changes. Hopefully we have provided you with some insight and best practices on how to predict shifts within the local CBD market – now and in the future. For more great tips and professional advice when it comes to Brisbane inner-city real estate, why not call 0419 782 133 and set up a one-on-one consult with Hannah Schuhmann.

When it comes to local real estate, the Brisbane CBD (like any inner-city space) is a fast moving market  - one which continuously experiences constant change to the landscape. For local buyers, this mean they always need to have their finger on the pulse in an effort to get the most benefit out of their investment.

Question is how? When investing in the Brisbane CBD, what is the best way to remain on the front foot? One of the most effective tools is observation; simply observing the market and increasing your awareness of statistics. But, where do you begin? Which stats carry more weight when it comes to detecting market changes? Good question! To help you, we have compiled a list of some of the most vital stats to observe; used collectively, they could certainly indicate a shift in the local Brisbane market.

However, as it’s a rather long list, we have broken it into two parts. Here is Part 1:

Median Price

A change in median CBD apartment prices can be quite indicative of market change. For example, a slight rise in the cost of apartments in the CBD may be signalling a forthcoming major shift when it comes to the local market and a period of high growth for investments. Consequently, a lower median price suggests that cheaper apartments have been built or sold, or that first home buyers are moving into the CBD. While monthly reports on median price changes are available, watching longer term trends (12 months up to 10 years) and figures can also prove quite revealing.

Market Stock

Like any area, how much stock is available in the CBD market is a quick indication as to whether it’s a buyers’ or sellers’ market. It also signals whether this has been shifting in recent times. For example, when fewer apartments are available it’s a sign that the market may be heating up. Alternatively, if more apartments are entering the market it perhaps indicates that buyers have more choice and that owners are cashing in on their capital gains.

Market Time

The length of time an apartment spends on the CBD sales market can also denote change. This figure is quite useful in gauging potential buyer demand for the apartment as well as indicating how long it may take to sell in the future. Typically the length of time on the market is reduced when the CBD market is hot or when large new apartment complexes launch strong marketing campaigns to push quick sales – whereas market time increases when the market is cold and slow-moving.

To be continued….

USEFUL TIPS

• In order to get the most from statistics it’s important to understand what is considered the ‘norm’ for the Brisbane CBD market. For example, being a fast paced market, you can expect the statistics to swing more.
• Take the time to understand statistical reliability  – it will pay off in the long run!
• Make sure you always look deeper to find what caused the changes. Was it a result of a small number of apartments as opposed to a CBD market trend?  Talk to us to explore this!

While these tips and statistics can help you predict possible changes in Brisbane’s CBD market, there is no greater benefit than speaking to a local real estate professional. That said, prior to purchasing an apartment within the Brisbane CBD or placing one on the market, we recommend you consult with Hannah Schuhmann – she understands Brisbane like the back of her hand. To set up an appointment call 0419 782 133.