Be realistic and objective – Don’t let your heart rule your head. This is business. Property valuers are a strange mix of scientist and psychologists. They deal with facts and analysis to find a single answer to a question for which there is, in fact, no forgone sharp-end-of-the-stick conclusion. After methodically processing information to assess a figure, they will sit back and ask themselves objectively “Do these figures fit what I know about the market?” So while the difference between a good and a great valuer is often depth of experience, the steps each will take to arrive at their numbers are generally the same.
How To Think Like A Valuer
Property valuers spend years acquiring the skills necessary to accurately assess value in their area of expertise, but there are a few simple principles they employ that can assist anyone in assessing what their next investment might be worth.
Property assessment is not a science beyond the realms of the average investor and while valuers make it their business to know the ins and outs of their markets, a few simple principles can help you ensure that you’re on your way to paying the right price for the right property – right from the get go.
Ways To Boost Your Cash Flow
- Lease options
Essentially what this means is that the landlord is financing the tenant who has agreed to buy the rented property at a price that is agreed upon by both parties. The landlord can then charge rent at a higher than market rate. This rent is then counted as payments toward the purchase of the property. A fee of about $3000 is also charged to the tenant as compensation for a deposit.
Ways To Boost Your Cash Flow
- Buy, subdivide, sell
If the house you buy is on a piece of land that is big enough, you can legally subdivide the land either once or several times depending on the size of the land. You then would look to sell the vacant land for a profit. Having made a profit on the sale you would then use that profit to help pay the loan. This would, in turn, reduce the interest payments and increase cash flow.
Ways To Boost Your Cash Flow
- Raise the rent
Many landlords resist raising the rent in fear that they will lose their tenant. The trick to raising rent is to offer the tenant something that will benefit them as well as yourself.
Depreciation 101
11. I bought my property three years ago. Can I still make a claim?
Yes, you can. Your accountant can amend your previous tax returns up to two years back. There are some exceptions so please contact your tax agent or the ATO for clarification.
Depreciation 101
10. How long will it take to complete my schedule?
Your depreciation schedule will take approximately two to three weeks to complete, as long as the quantity surveyor can inspect your property without delay.
Depreciation 101
9. How much tax will I save?
Each property is different and many varying factors must be considered when preparing a property depreciation schedule. There are several depreciation calculators on the market. I suggest you Google ‘depreciation calculator’ to find one. I wouldn’t bother paying for a property depreciation estimate – the best ones on the market are free in my opinion.
Depreciation 101
8. How much will my property depreciation schedule cost?
The cost of preparing a tax depreciation schedule varies according to the type of property you’ve purchased, its location, size and numerous other factors.
Generally, you will find most of the leading quantity surveying companies offer a money-back guarantee that says you will save twice your fee in the first year or they give you the report for free. Quantity surveyors’ fees are also 100% tax deductible.
Depreciation 101
7. My property is renovated. Can I still claim?
Yes. We will need to know how much you spent on renovations. This is an ATO obligation. If the previous owner completed the renovations you are still entitled to claim depreciation. In either case, where the cost of renovation is unknown, a quantity surveyor has been identified by the ATO as being appropriately qualified to make that estimation.