Short-term leasing has taken the property industry by storm in Australia. The industry witnessed a whopping growth of 47 percent. According to reports, 30,000 homes have been leased in the year 2018 alone on a short-term basis. As the short term rental market is becoming competitive, house owners can still capitalize on it. There are many benefits of leasing out a property on a short term basis. Everybody aims to generate some yield on investment property. If you plan to rent your property in such a way, you must remain ahead by focusing on quality. This will help you beat the competition prevailing in this segment.
Given below are some of the things that you must know about leasing your property for short term:
Boosts Rental Yields:
Renting your property on a short term basis can enhance your rental yields. If you want to boost your rental yields, the property must meet the requirement of location. All the locations cannot be the same. There are experts who will provide you with useful advice about your property and its location. Properties located at a famous location must be high in demand. Such properties can generate a handsome profit. So if you are planning to invest in a property, check its location on a priority basis and then make the investment. You must also find out the entire tax depreciation cost.
Depreciation on Short Term Rentals:
Short term rentals can lead to high deductions as you also provide the furniture. The original structure of the property will be eligible for division 43 deductions only if it was constructed after September 1987. The plant and equipment items in the property will be of great significance and not just the main assets like furniture it will also include other items in the property like blinds, AC, carpets, etc. However, furniture items do give you a strong edge as these items receive high rates of depreciation. Things have undergone a change in May 2017. If you purchased an investment property after May 2017, you will be eligible to claim for plant and equipment deductions. For this, you must purchase the property as brand new. You can seek the plant and equipment deductions for the furniture if you purchased the established property after the year 2017, May. You must generate the property depreciation reports in an effective manner.
Ways to Claim Plant and Equipment Deductions on Furniture if You Bought After May 2017?
All you have to do is just purchase the pieces of furniture in brand new condition and, get them installed at your income-generating property. As long as you fulfil this condition, you can claim plant and equipment deductions on the furniture.
It is time to tap the vast potential of the short term rental market. Do not deprive yourself from the immense benefits that you may receive from leasing your property on a short term basis. And, when you install new furniture in the property, you can avail some very worthwhile deductions by renting it out. Calculate the property tax depreciation and start the planning of renting your investment property.