There’s never one, simple reason for investing in property. Buyers might want to add to an existing portfolio, start a renovation project, or have a home to rent out for holidays. Humans are only, well, human and emotions sometimes run high when it comes to property.
Avoiding emotions is difficult; you can’t shut them off completely. When you get something you want it’s natural to feel happiness, even elation. But the opposite is sadness and downright devastation. First-time investors and buyers are most susceptible to this because they lack experience in the area. The emotional burnout of hunting for properties and attempting to invest, only to get rejected, is severe.
Seasoned investors have gone through the initial roller-coaster of emotion and know that they’re investing in property for their potential tenants, not themselves. Investors have the experience to analyse properties with a near ‘clinical’ eye. They categorise the positives and the negatives of the home, whether it fits the profile of their ideal tenant, and if it will generate any income.
One way to deal with the emotions, and all the highs and lows that come with them, is developing a business mindset. Take the personal bias out of the equation and ask yourself: “what would an investor do?” Don’t go about investing in property because you hope to move into it one day or it fits the mould of your dream house. Your tastes, great as they are, don’t suit everyone.
Another way is to get the professionals on your side. The buyers agents and property specialists at your bank are unbiased and will honestly say if a particular home is a smart buy. When you’re looking at property for investment, you want to buy a place that generates income. It’s not pleasant when a depreciation specialist comes back with a report saying you basically purchased a money pit.
Emotions are fine, but emotional fall out is not. Avoid making irrational decisions by changing your mindset and getting the professionals on your side.
http://deppro.com.au/wp-content/uploads/2017/07/deppro-resize-6.jpg107190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2017-07-21 00:35:322017-07-06 00:41:40Avoid emotional fallout when investing in property with these tips
Investors and business owners order depreciation on investment property so they can efficiently handle expenses. Many investors, though, don’t know about depreciation and how it can make their lives easier. It absolutely pays off financially, and there’s other perks as well.
Most people don’t think about taxes everyday, but the professionals do. Ordering a depreciation report on investment property removes a lot of guesswork and takes the pressure off their minds. Thanks to the experts, they can make accurate deductions for the time they own the properties in their portfolios. Deppro’s reports last forty years, long enough to hold the property and sell it on.
Access to a depreciation schedule is easy for any investor, whether they’re just starting out or played the game for a while. Companies like Deppro exist to help people at any stage of their investment game. They’ll explain how the report works, how items are categorised, and what to do after the clients get the depreciation schedule in their hands. This makes life easier, especially for newcomers, because the experts are taking care of everything.
When you ask the experts for help with depreciation for investment property, you’re also getting an education. Deppro guides their clients through the process of ordering the report and how to use it to maximise deductions. You’ll also learn what a quantity surveyor does, and what items will fall under ‘capital works’ if you ever renovate your property.
When you get expert help for depreciation on investment property you’re making less work for yourself. You get a depreciation schedule that lasts for decades and saves you worrying about accurate numbers. The report, and the expert help that comes with it, is accessible to anyone at any stage of building a portfolio. You’ll also learn a few things along the way, like how to use the report for taxes, and whether you can claim the new carpet for the office as a deductible expense (yes, you can).
http://deppro.com.au/wp-content/uploads/2017/07/deppro-resize-5.jpg126190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2017-07-19 00:01:372017-07-06 00:32:53Depreciation on investment property makes life easier
There’s experts out there, like Deppro, who efficiently handle tax depreciation so their clients can get the best possible return. Seasoned property investors know about tax depreciation and how to claim deductions every year. This article is for the first-time investors wanting to get in the market, but not quite able to wrap their head around depreciation.
It’s a claimable expense
Tax depreciation is deductible from your income, giving you a greater tax return.
You need a depreciation schedule
This is absolutely necessary so investors and business owners can claim the maximum amount over time. Depreciation schedules begin from the settlement date and estimate the value of taxable items over their useful lifetime.
Getting a depreciation schedule takes the guesswork out of evaluating items in your property as the years pass. Quantity assessors, like those who work for Deppro, will do an inspection. The depreciation company uses these to write a report and a depreciation schedule. These are delivered to the client within the month. This often overlooked information helps investors significantly boost their returns.
You can buy more properties
The money earned back from tax depreciation lessens the debt investors take on when they buy property. It’s common for them to use the extra funds to expand their portfolio. Once they do, they repeat the process of getting a depreciation assessment.
The report isn’t an annual thing
The quantity surveyor will only need to visit the property once. They’ll take pictures and make notes before heading back to the office and drawing up the report, outlining the values of the items they see. If you do renovations on the home, though, you will need to update this report for an accurate schedule. You’ll get in trouble with the ATO if you make a claim with false information.
The depreciation schedule must come from a registered tax agent so that it complies with guidelines from the ATO. Deppro’s quantity surveyors are educated, accredited, and take pride in providing accurate reports.
http://deppro.com.au/wp-content/uploads/2017/07/deppro-resize-4.jpg126190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2017-07-14 00:01:462017-07-06 00:24:00What everybody ought to know about tax depreciation
Rental property depreciation is a bit of a mouthful but it’s an essential part of owning an investment property. Everyone makes mistakes when it comes to complicated tax matters, and that’s the reason why clients come to Deppro for professional help. We list a few common mistakes (plus more here) so you can avoid them.
People don’t depreciate. Ever.
80% of property investors neglect having their rental property assessed for depreciation. This mistake costs them thousands of dollars over the time they own the house, with the money they could earn going back into tax instead.
Deppro calculates that getting a depreciation report can earn investors back 60% of the property’s purchase price. These funds are often used to save for future properties.
Confusing the categories
The deprecation specialists place items of value into two categories: plant and equipment, and capital works.
Plant and equipment: The owners often move these into the house when they buy it, and they can be removed just as easily. Items in this category include:
Hot water systems
The other category is capital works. These items are built into the house. They include:
There’s more information from the ATO about assets eligible for depreciation in this PDF.
People overlook potential deductions
Investors make this mistake a lot because they don’t know what they can claim. This all adds up to a larger depreciation on the report the new owner receives. Claimable items include something as large as a swimming pool to something as innocuous as a smoke alarm. These potential deductions leave investors out of pocket when they’re not claimed.
If you’re an investor and don’t have a depreciation schedule, you’re missing out on thousands of dollars in returns every year. Those who do have a schedule are liable to make mistakes, like confusing what item goes into which category. To avoid mistakes like this, get an expert like Deppro on your side to take the guesswork out of rental property depreciation.
http://deppro.com.au/wp-content/uploads/2017/07/deppro-resize-3.jpg126190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2017-07-12 00:07:342017-07-06 00:12:31Rental property depreciation mistakes to avoid
Having a depreciation schedule isn’t anyone’s idea of a ‘must-have accessory’ but it pays off in more ways than one. Seasoned investors and business owners with several properties under their belts know well the bragging rights they’re afforded when they’ve got the depreciation schedule in their hands.
It’s less work
Tax time is the bane of most people’s existence . Organising account information, making sure expenses are correct and the like is a pain if you’re not organised. When you own investment properties, or brick-and-mortar stores, the amount of work increases substantially.
This is where the depreciation report comes in. After the quantity surveyor does their walk through and the company mails you the report, a large bulk of the tax reporting for those properties is complete. You don’t have to triple-check bills or receipts for a long time unless you do renovations.
It lasts for a LONG time
Ordering a depreciation report isn’t an annual task. It’s valid for the lifetime of the property. Companies like Deppro create reports that last forty years, so you’re set for life, or at least as long as you have the homes/shops in your portfolio.
This means, though, you must act quickly. As soon as you settle the deal with the real estate agent, get the depreciation experts in to assess. They prefer to see everything in the condition you bought it to make an accurate report. If the previous owners made renovations, then that’s a bonus as you’re eligible to claim their work in the report!
More (money) for you
The biggest bragging right of all? You’re paying less tax! Because you got the depreciation report done and passed off to your accountant in record time, there’s more money flowing back to you come tax time.
A depreciation report isn’t glamorous, but its benefits are worth their weight in the size of your tax return. You can feel a little smug having less work on your plate organising expenses. Your accountant has the report, and you have the time to run your business.
http://deppro.com.au/wp-content/uploads/2017/07/deppro-resize-1.jpg190190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2017-07-07 00:00:512017-07-06 00:07:01How your depreciation schedule give you bragging rights
Property depreciation is a crucial part of managing your taxes and rental property. If you don’t do it, you’re missing out on cash – lots of it. So how does one get on top of their tax depreciation?
First thing’s first: get an expert. Companies like Deppro prepare depreciation reports/schedules that are ATO compliant. Their staff evaluate items for their lifetime value and prepare the report, detailing how they will decrease in value over time. Things in and around the home fall into two categories: plant and equipment, or capital works
Second, get the expert to come as soon as you settle with the real estate agent. Quantity surveyors work best when they see the items in the condition you bought them. If the previous owner has done renovations, you can claim deductions on their work! The ATO will only accept a property depreciation report created by a quantity surveyor, not an accountant. This is because they’re the most qualified to do it. You wouldn’t expect someone who estimates material costs for a living to write your tax return.
That said, the third step is to get your accountant on your side. They help you with your tax return every year, making sure you’re not missing anything you’re eligible to claim. The accountant will treat the property and depreciable items as another asset to claim. They’ll need the property depreciation schedule to properly write out the returns over the years.
Another helpful way to get on top of property depreciation is to make sure you’re buying a property that will pay for itself over the years. A house or apartment that’s recently renovated and meets the criteria to generate high rental income is ideal.
Property depreciation is difficult to wrap your head around. To get on top of it, it’s absolutely necessary to call in experts like Deppro not long after your settlement. When you’ve got the depreciation schedule in hand, you’re set for life, or at least the next forty years.
http://deppro.com.au/wp-content/uploads/2017/07/deppro-resize-2.jpg124190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2017-07-05 00:01:092017-07-06 00:04:55How to get on top of property depreciation
In most capital cities of Australia, apart from Melbourne and Sydney, there are still a plentiful supply of properties priced for sale under $500,000. This includes Brisbane, Perth, Adelaide and Hobart. Major regional centres such as the Gold Coast in Queensland and Bunbury in Western Australia have this abundance of properties as well. In Perth, for example, it’s now an investors paradise. There’s many properties currently listed for sale under $500,000 located within a 20 kilometre radius of the CBD.
$500,000 is around half the median house price of Sydney. Properties in theses competitively priced capital cities offer a low risk entry into the property market. There’s added potential for capital growth moving forward. Yet, it’s important that first time investors take a cautious approach to their first property investment purchase. Realistically, they should focus on buying an investment property for under $500,000.
It’s an unfortunate fact that too many first-time investors financially over expose themselves. They buy an expensive investment property that limits their ability to purchase more in the future. This is especially the case if they purchase an expensive property in the wrong location. That could result in a financial nightmare. In contrast, buying a lower priced property that’s got the potential for strong capital growth is an important building block to creating a successful property portfolio.
Lower priced properties tend to have higher rental returns. This is important in a climate of rising interest rates, with the major banks increasing rates for investors over recent months.
Issues you should consider when buying a lower priced property include:
Spend time researching all aspects of property market before even looking for an investment property. First time property investors need to consider factors like negative or positive gearing, rental returns and depreciation.
Past trends in property values will generally indicate future trends. Therefore, it’s wise to examine the long-term capital growth rates of the suburb.
Take a broad approach to buying an investment property. Most first-time property investors buy a property in their local neighbourhood because they’re familiar with the area. By taking a narrow approach to the location of the investment property, first time investors severely limit their options.
Target suburbs in lower priced areas that have a higher number of properties for sale. A simple tip is to check the internet and weekend papers. This helps investors discover areas with a larger number of property ads.
When you have selected a suburb, don’t make an emotional decision when choosing a specific home. Most first-time investors purchase a property they’d like to live in. It’s important to remember that the investment property must appeal to a tenant who’ll be paying the rent.
Check out any planning changes proposed for the suburb. Many local governments are undertaking reviews of zoning that potentially have a major impact on property values. For example, a property that was purchased for a single residential use and then rezoned by the local council, as a triplex site. The property in turn notably increases in value. The planning department of a local government can inform first time investors of any proposed zoning changes.
Check out any planned infrastructure changes in an area you’re interested in buying. For example, an upgrade of a local shopping centre or a new railway station will make a major impact on local property values.
Make sure that there are tenants prepared to rent your property. Rental income is a key factor in serving the loan. If you can’t find a tenant, then you’ll have problems keeping the investment property over the longer term.
Check your finances before you consider buying anything. If you have pre-approval finance it will allow you to move more quickly to secure the right investment property.
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http://deppro.com.au/wp-content/uploads/2017/03/moneybig_0.jpg127190adminhttps://deppro.com.au/wp-content/uploads/2017/04/logo-deppro-final-300x140.pngadmin2015-07-14 10:02:002017-05-25 04:29:43Record slow down in rental growth highlights needs for investors to boost cashflow through claiming their depreciation benefits.