Newspaper article Gympie Times, The Qld.

Unwary Investors BEWARE

Newspaper article Gympie Times, The Qld.

Unwary Investors BEWARE

Article excerpt

BEING a landlord is not just a matter of sitting back while the money rolls in. There can be sizable problems for unwary investors a[pounds sterling] and no one should think that being a landlord means money for nothing.

Here, we run through some of the most common problems for landlords... and how to solve them.

Repairs/maintenance: Landlords can be hit with big bills at any time and these can reduce returns. If your rental property is a standalone house, the bills are your problem, though they are tax-deductible against your rental income.

Unit owners in strata premises have a centralised, pooled ownership structure, which means expenses are shared between owners.

But there are many cases in which major repairs have been needed to a strata premises and there has not been enough money in the sinking fund, requiring big extra contributions from all the owners.

aIf you are buying a strata property you need to check the repairs history for the building and look at how much money is in the sinking fund,a James Garnsey, of financial services firm Yellow Brick Road, said.

Mr Garnsey also warns about the potential for defects in modern apartment blocks and resulting problems in chasing developers or insurers for financial redress.

aIn a building I lived in, the body corporate had to wear the expenses of chasing the builder, who had gone bust,a Mr Garnsey said. aThe block was only built in 2001 but had serious problems and we had to pursue a damages claim for $1.2 million.

aIt took us nine years to get the money and cost us about $400,000 in legal fees.a

Land tax: Generally, if your land holdings have a total taxable value above a certain limit (excluding exempt land), you must pay land tax.

Your principal place of residence or land used for primary production is usually exempt. For example, if you bought investment properties in Victoria with a land value component of $1 million, you would be liable for a tax bill of $2975 each year.

Tenant disputes: If you are faced with a tenant more than 14 days in arrears, you are entitled to give them a notice to vacate, but to do so for such a short lapse would be inadvisable. …

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