A Tax Depreciation blog by Paul Bennion.
When Scottish playwright and novelist J.M. Barrie introduced the world to Peter Pan back in 1904, he would have had no idea that more than a century later his much loved character would be used to describe a new breed of property owners in Australia.
New research by the Commonwealth Bank has identified ten new social groups in society who will become a dominant force by 2030. Among these emerging social groups are the “Peter Pan’s”.
This social group were born between 1954 and 1965 and this generation of Baby Boomers will be aged between 65 and 76 in 2030.
Unlike previous generations in this age group, they will have no intention of retiring but will live independently as long as possible, enabled by the latest technology and medical advances.
The reality is that people are now living much longer and leading healthier lives will into late age.
This social change will have a huge impact on the property market moving forward and in particular the property investment market.
One impact on the property investment market is that we will see people investing in property at a much older age.
Because people are all living longer, we will need more money to carry us through our retirement years and superannuation alone will not be enough for most people.
At the same time, the Federal Government is restricting the government pension and these guidelines determining who receives the pension will become even more tougher as time goes on because of the growing number of people reaching retirement age at a time when Government is trying to cut its growing public debt.
Investing in property has proven to be a very sound way for ordinary people to fund their retirement and the rise of the “Peter Pans” will see older Australians starting to invest in property.
DEPPRO has already experienced this trend will our company now undertaking more tax depreciation schedules for investors aged in their sixties which ten years was a rarity.
Over time, we expect the number of older property investors to increase very strongly in line with our ageing population.
Top Tips for Peter Pan Property Investors
- Seek independent financial advice before making your first property investment.
- Take advantage of the generous tax benefits associated with property investment such as depreciation. These benefits can represent 60% of the total value of the property you plan to purchase.
- Take a wide approach to the geographic area where you want to investment because most people buy and investment property within a 15 kilometre radius of where they currently live and therefore can miss out on great investment opportunities in other areas.
- Research the potential rental income of the property before you buy. A good tip is to ask local property management companies what kind of properties are most in demand by renters and the typical rent that could be expected from the property you plan to purchase.
- Always get a property management company to look after tenant selection and the overall management of the property. These fees are tax deductible. Most people only ever buy one investment property because they choose the wrong tenant and this can lead to loss of rental income and damage to their investment property which is a big turn off for first time property investors.