When can I carry out work.

Still trying to sell my property and I did have a long conversation with the REA on why it isn't selling. (Not sure if am being told BS.)

I have decided if the unit is too hard to sell (which it seems to be) I will turn it into an investment property. So I am starting to think about how and what need to do before renting the unit.

The unit is over 20 years old and was a rental when I purchase the property. I had a tenant for about 6 weeks. The property was in bad shape after being rented by the onsite managers for years.

The unit needs new floors, a cooktop, blinds and a couple of other items. The kitchen counter could do with a refresh.

From my reading, the unit needs to be rented to claim these items. Is this correct?

Can I get stuff done a month into the lease? ( if the tenant consents)

Or can I do some of the changes now and if the unit doesn't sell claim the items on tax after the property is rented?

Ok - do I need a valuation? Anything else that I need to do for tax purposes?

Not sure if this is ok to ask. Does anyone have a good recommendation for a tax accountant who is good with property in QLD? I am happy to pay someone for advice and guidance.

 

All property can be sold. Its the condition, location and always the price that determines a sale.

Deductions for improvements are the least of your worries. If a property isnt appealling for sale its not going to appeal to a decent tenant. Sounds like it needs a new kitchen and appliances. Flooring etc. ALL of this would be depreciable and isnt deductible. The cost of such improvments adds to the costbase to reduce CGT then over time that erodes slowly as deductions are claimed to give you a reduced costbase. There would also likley be merits to getting a quantity surveyors report for the deduction benefits of the building allowances incl the common area you have a share in. The timing of the renovations may afect depreciation deductions if you add new appliances etc while you live there they arent eligible.

Doing the work during a tenancy doesnt make it deductible. These expenses are capital expenditure and pre-date the rental use although how long you have owned it isnt clear. Due to the initial tenancy a valuation is irrelevant as any CGT issues will be based on pro-rata based on taxable days as a % of total ownership.

 

I was about to do a 20k reno when I decided to sell. So I am aware of what needs to be fixed, renovated etc. I am asking the question to see if it is possible to get the floors redone and the kitchen before advertising the unit to rent. The current condition of the unit is still ok to attract a tenant.

I am currently not living at the property and all my stuff is in storage as I have moved out to care for a family member. My plan is to let the agent's agreement run its course. I plan to move into a rental after my carer duties finish. I plan to complete the renovation and advertise for a tenant when the agent agreement ends and finding a rental. Would this affect the depreciable deductions or do I need to do something officially on an ATO level?

Usually, when is the best time to do this survey?

I can't work out why the agent can't sell the property when he has zero issues with the property presentation (I asked). I even told the agent to remove the price off the property advertising but they refused because it would result in too many calls to their office about the property.....


Thanks for your help.

 

Usually the first day of ownership.
Sell, reno or rent it doesn't really matter to what you can claim, it's costing you far more sitting there empty !

 

Best time to get a new QS report done is after the works you do are finished and prior to a tenant. (Take decents pics if they cant immediately get there...They will guide this) They can incorporate your new work and the existing building. The QS will want details of your spend.

 

Would you spend the money on a QS report if you were only renovating to sell ?

 

No. The merits of a QS report are only available if the property produces assessable income. The duration of that period will be a consideration. I have seen people build new and intend to sell after 6mths and rent it for 6mths. In that case the annual deductions when adjusted for the period rented may still be a $5K deduction. However its is privately used there would be no reason to bother

 

They can't refuse. You are the client. So many things in this thread doesn't make sense.

You can sell with or without a reno. Price just needs to be adjusted. Maybe your expectations are too high. In any case selling a unit is not a complicated endeavour. Tbh I have no idea whether it's you or the agent hindering the sale.

 

Strange they say in same post the unit is in "bad shape" then indicate it doesnt need any / much work but also that it wont sell. The OP didnt mention the issues the agent discussed in the long conversation but I do question if they arent taking the guidance on board. If a property is in a poor state to sell then its in a worse state to lease.