Short term rentals have emerged as an ideal way to enhance your rental income. However, the property must meet the requirement of a location as all locations cannot be termed as equal. Deppro QLD professionals have achieved specialization in offering advice on whether your property is going to be an ideal fit or not. You should be aware of the steps for making an investment property available on a short-term rental basis. There are some key deductions available on short-term rentals.
Here are some vital tips pertaining to renting your investment property on a short term basis:
List of Things You Need to Prepare
You will be able to manage the leasing component without any external assistance. It may appear quite an exciting thing for you as you have the bright potential of becoming a short-term rental billionaire. You must be prepared to field some vital questions. You must handle guest inquiries related to bookings. You need to examine the guests to ensure they are well-behaved. During this process, you must confirm bookings and gather lodging payment and security deposits upfront. You have to organize the check-ins and check-outs as per the dates. Make sure you carry out property maintenance effectively. Carry out professional cleaning after every check-out. And, you can consider all these aspects while calculating depreciation for property.
Depreciation & Short Term Rentals
Short-term rentals have got stunning deductions as a result of the furniture provided. And, the original structure will get qualified for division 43 deductions in case the property was constructed after September 1987. Plant and equipment items will play a crucial role. It is not only loose assets such as furniture but it will also include items such as carpets, blinds, AC units, etc. But, due to increased rates of depreciation on furniture items, they can give you a major boost. Meanwhile, you may not find it that easy. It is because in May 2017 things underwent a change. If you bought your investment property after that date, you can claim the plant and equipment deductions in case you purchased the property new. You can also get those plant and equipment deductions for the furniture in case you purchased an established property post May 2017. You may hire Deppro quantity surveyors to identify your depreciating assets.
How to Claim Plant & Equipment Deductions on Furniture Bought After May 2017?
You can get them by way of installing the furniture on your own. Technically speaking, you must purchase the items brand new and install or get them installed at your income generating property. As long as you are doing this, you will be able to claim plant and equipment deductions on the furniture almost in the same manner as you did before 2017. You should be aware of the income-generating property. If you install new furniture in your property, you must ensure that you don’t throw away the deductions by residing in the property.
You must know that you may mess it up if you begin to live in the property and you install the furniture before you move out. You may kill the deductions if you happen to stay in the property on your own in a manner that ATO believes more than incidental or occasional use. You must consider this aspect if you are depreciating assets for tax purposes. ATO has clearly specified holiday homes. It is spending a weekend in a holiday home or permitting relatives to live for one weekend in a holiday home free of cost that is generally used for rent would be defined as occasional use.