Investors tend to show a keen interest in a property as there are enormous benefits when they file their tax return in Australia. Investors are keen to get a share in the profit of the growing real estate market.
Here are some of the reasons why childcare centres are becoming so attractive for investors:
1. Increase in depreciation schedule:
There has been a rise of 67% in tax depreciation schedules for childcare centres. The depreciation schedule has been rising consistently every year as there is a surging demand for these properties as an investment. The industry has witnessed robust growth in recent years. The fast growth of the industry has presented numerous opportunities for investors.
2. High demand for childcare centres:
There has been a high demand for childcare centres in the last few years. The main factors responsible for the sharp demand include strong rental yields and profitable depreciation deductions. However, some feel that there is an oversupply in the industry. Childcare centres have emerged to be a profitable investment. The hotspots may include suburban areas that have become famous among families. Additionally, these centres are becoming a famous option for proactive investors searching for the next asset to add to their portfolio. Among social factors, high birth rates and surging need for flexibility have contributed to the rising demand.
3. Long term agreement:
Childcare centres are largely leased out by tenants on a long term basis agreement that may last between five to ten years. In this period, the centres offer positive rental incomes and remain a profitable asset to an investor’s portfolio. Investors can enhance their cash flow by taking benefit of the several depreciation deductions available from the many childcare centres. Childcare centres offer attractive yield on investment property that investors must not miss.
4. Huge deductions:
Reports suggest that when several depreciation schedules were prepared for childcare centres, it uncovered huge deductions over the life of the property. Owners can claim several depreciable items such as artificial grass, kitchen equipment, etc. And, tenants can seek advantage of the available depreciation deduction of their furniture, toys, and play equipment, among others. It is worth noting that owners of childcare centre have many plant and equipment assets. And, all of them offer some depreciable value.
Childcare centres offer immense benefits to investors and help in lessening their tax burden. If you face any confusion while preparing the property report, you may seek the help of experts. According to a case study, owners get the opportunity of claiming $25,475 worth of depreciation deductions for plant and equipment. And, in the cumulative five years of securing the investment, the depreciation claim will total approximately $71,670.