What Is A Quantity Surveyor?

What is a quantity surveyor what do they do and why is it important to you as you're building your property portfolio helping new find positive cash flow properties and I wanted to teach you today about exactly what a quantity surveyor does and when it's going to be worth you hiring them now a quantity surveyor is someone who's a specialist in the measurement and the estimation of construction costs.

Now this means that quantity surveyors are really good at looking at plans of a property and working out okay how much concrete how much steel how many bricks what is going to go into this property and how much is it going to cost they're also specialists at looking at an existing property that's already been built maybe it was built years ago quantity surveyors can assess it and say okay they use likely this many bricks this much wood this many tiles.

And how much would that have cost years ago when that property was built so quantity surveyors can estimate the cost of a property that's going to be built quantity surveyors can also estimate the cost of a property that has already been built now why is this important to you it's important to you because when you're investing in property there's a valuable tool called depreciation depreciation is the lowering in value of an item so the easiest example that I can give is when you purchase a car brand new let's say you pay $, for a new car you know as soon as you drive that off the lot it has lost value.

And is now worth you know % less or something like that that loss in value is called depreciation and every year that car is going to get worth less and less and less and less and so a car that you might have paid $, for years ago isn't going to be worth , ten years time might be worth something like $, so there's a big difference between what you paid for it and what it's worth now and that difference in value it's what's called depreciation so bought ten years ago for grand has depreciated thirty thousand dollars and is now worth grand today.

And the reason this is important when you're investing in property is that the ATO allows you to offset these depreciations and count them as a loss on your property and with the current negative geared laws which may change in the future you can actually offset that against other taxable income that you're earning so this is why it's so valuable because if you're a high-income owner and you're paying a large percentage of tax over % high % maybe even over % if you can claim $, in depreciation there's the possibility that you could get some of that back from the government or you don't have to pay as much tax.

And so depreciation is very valuable because it can improve your cash flow because it lowers your cost one of your major costs and that is tax because you are claiming the loss in value of these items in the property it just means that the property on paper isn't making as much money because you've had all these depreciation losses so this can be very valuable in terms of cash flow and turns up giving you the extra cash that you need to be able to service more loans buy more properties pay for that next renovation etc so depreciations not to be overlooked I know there's a lot of investors out there who invest and don't do depreciation but this is generally due to the fact that quantity surveyors are uneducated about what depreciation is?

And why it's valuable to them so quantity surveyor is important because when it comes to depreciation you can't just do it yourself because the ATO the Australian Taxation Office won't actually accept your opinion as an estimation of the cost of things in your home so for example let's say that I had these lovely curtains here that quantity surveyor bought I think quantity surveyor paid like five dollars ten dollars for a set of these curtains what if I was to say that this was an investment property that I owned and I put these lovely curtains in and they are worth $, you know I've lost the receipt so I'm pretty sure there are thousand dollars.

So I'm going to claim depreciation against my thousand dollar curtains okay that's an extreme example but that's something that the ATO obviously wants to avoid because if I can claim depreciation on things that aren't actually worth what I'm claiming them for then I'm going to save a lot of tax which means they're going to miss a lot of tax and that's tax evasion so we're going to want to avoid that so quantity surveyors are experts in this and the Australian Taxation Office will take their estimate of what things are worth in your property as fact because these people work in the industry they're experts is estimating how much things are worth how much things cost etc.

So a quantity surveyor will go into your property and will estimate the cost of construction of the property itself and if your property is not too old then there may still be depreciation you can claim there and they'll also estimate the cost of the unfixed or the plant and equipment in your property so things like your thousand-dollar curtains or things like the carpet light fittings all this sort of stuff quantity surveyors will estimate the value of those as well and they'll then create what's called a depreciation schedule now everything depreciates at a different rate if I put tiles in a property they're probably not going to go down in value as quickly as carpet which is going to experience a lot more wear and tear curtains are going to wear out quicker than an oven that I put into my property.

So I believe that there are guidelines or there are rules about what percentage of things you can depreciate how long it takes to depreciate so I may be able to appreciate the full cost of these cones faster then I can depreciate the full cost of tiles or ovens or light fixtures or things like that so there's a lot of different rules and then there's extra rules that as things drop below a certain value quantity surveyors go into this low value pool and that has its own rules as well so it's very complex and very difficult to do by yourself.

So corn lease available to prepare a depreciation schedule for you you then take that depreciation schedule to your accountant and then quantity surveyors will use that depreciation schedule to claim depreciation for you when you go ahead and do your tax return so I say all of this and explain all of this to explain that accordingly surveyor is someone that assesses the value of your property the building itself as well as the things inside that property and then provide you with a depreciation schedule that you can take to your accountant and you can use to save tax or to claim that depreciation.

So a quantity surveyor is someone that is you know very important to building your property portfolio it's not someone that you're going to need to go and see every year like you need to see your accountant every single year and someone that you see once for the property and certainly if you make major changes or updates the property that you may need to go back to a quantity surveyor so the ideal time to get a quantity surveyor involved is at the very beginning of purchasing your investment property if you fail to claim depreciation.

I do believe you can claim backwards depreciation of about two years however it's very difficult to claim depreciation further back than that so if you've owned a property for five ten years you decide oh my gosh I missed out on ten years of potential tax savings I'm going to get a quantity surveyor and just fix that well no you can't necessarily do that so the best thing to do is to get a quantity surveyor in as soon as you purchase the property get them to assess it and so as soon as you're doing your first tax return then you've got a depreciation schedule you can start claiming tax straight away.

Now I do believe if you get a good quantity surveyor mixed with a good accountant that there are ways to claim this depreciation and get the cash flow benefits on an ongoing basis so rather than waiting until tax return time at the end of the year and getting tax back from the government of thousands of dollars you may be able to actually get that as a payment or you know as a tax saving that you don't have to pay throughout the year so that can really improve your cash flow.

So I hope that this has explained what a quantity surveyor is exactly what quantity surveyors do you know we talked a little bit about depreciation and then we talked about when is the best to get a quantity surveyor and that's when you first purchase a property or if you already own a property and you haven't had a quantity surveyor do a depreciation schedule for you then now's the time the longer you wait the less you can back claim because obviously time is always moving forward and it never moves back.

So hope that this has helped explain it to you I hope that you can find a good quantity surveyor to add to your arsenal of property experts that can help you I have previously interviewed quantity surveyors who are the largest in the country you can check them out calm a you they basically do everywhere all over the country they're not the cheapest but they are the biggest and they can Depreciation service everywhere and so look I haven't looked into it in detail and as to see whether they're excellent or not but you know Brad was a really nice guy really informative really understood what he was doing and so truthfully if it was me and I need to get a quantity surveyor would be the first people.

I would get to quote I probably get two other quotes but I go to first so you can check them out and if you're interested in investing in property and you need a little bit of help getting over the line maybe you want someone to help you find a good area to invest in or help you inspect a property or just help you to negotiate and purchase your first property if that's you and you're struggling to take that step and buy the property yourself you want someone to hold your hand then you may want to buy his agent and I'm working very closely with quantity surveyors from pumped on property who's my buyer's agent of choice.

And he is offering listeners of on property a free strategy session with him to set goals for yourself and to also try and analyze okay how can you potentially achieve those goals through investing in property and so if you're interested in a free strategy session to kick-start your property portfolio and you need that little bit of extra help then go to to book in and request a free strategy session over there.

Quantity Surveyor

Author:
mayur-bhatt

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