3 underestimated real estate tools you need to up your game

Real estate is a game that’s brutal if you don’t know how to play it. Some investors are naturals, others learn from their mistakes and go on to build a successful portfolio. There’s plenty of different strategies and tools out there at your disposal. Here we list three that you’re maybe not taking advantage of, but very well should be.

 

  • Depreciation schedule

It’s said up to 80% of investors don’t know they can increase their income through depreciation. This is hundreds of thousands of dollars that’s not in your bank account, rather, it’s going to the government through tax.

Deppro’s depreciation specialists will survey the real estate you’ve bought and get back to you with a schedule that’s got a 40-year lifespan. You probably won’t have the property for that long, but it’s long enough for you to start seeing return on your investment. Our tax depreciation services are helpful to investors in residential and commercial property. If you’re a business owner, this means you can expand, or find a larger office space, sooner!

 

  • Property manager

These guys handle the daily tasks surrounding your properties so you don’t have to. Lots of investors also take on the role of ‘landlord’, but this doesn’t always work out well. Think of the problems that come with difficult tenants and knowing how best to set the rent.

Property managers don’t have to worry about ‘emotional investment’ like the owners of the properties do. They take a critical approach to screening tenants, how to set the rent (and adjust it), handling leases, and evicting troublemakers. You’ll find managers specialising in many areas of real estate, from commercial offices to apartments and homes.

 

  • Investment companies

These companies are made by investors for investors. They offer support services like educational seminars and specialised searches for real estate and property managers.

Property Club is an example of an investment company that encourages support, rather than competition. Of course, real estate is a competitive game but investment companies will have your back through your journey. Property Club has exciting events like property tours, access to expos, and other events like research and education seminars. There’s a further subset of clubs that members can join when they meet certain criteria.

These three tools are often overlooked but extremely beneficial. They save investors time, money, and emotional burnout. They’ll certainly make your investment game a lot stronger.

Rental property depreciation mistakes to avoid

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
  • Air-con units
  • Furniture
  • Whitegoods
  • Curtains

The other category is capital works. These items are built into the house. They include:

  • Cupboards
  • Clotheslines
  • Fences
  • Timber (decking)
  • Bathroom fixtures

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.