A Finance blog by Paul Bennion.
The uncertainty in the stock market will have a silver lining for the property market as it will encourage more people to invest in property.
In recent weeks, the S&P/ASX 200 has fallen below the physiologically important 5,000 barrier which has weighted heavily on investors in the stock market.
While the performance of the stock market can be volatile, it is important to consider that over the long term, property tends to outperform the stock market in returns to investors.
For example a recent study over the last two decades found that investment in residential property returned a 9.9 per cent gain, beating both Australian shares at 8.7 per cent and global shares at 8.0 per cent.
However, despite the strong performance of property, first time investors still need to ensure that don’t make simple mistakes that will undermine the performance of their properties over the long term.
Anyone looking to invest in property during 2016 needs to be mindful of the most common and easily avoidable mistakes people make.
One of the best ways to ensure that you enjoy a smooth property transaction is to always engage the services of companies who belong to highly respected industry organisations whether it is a real estate office, settlement agency or pest inspection company.
If something goes wrong, then the consumer has added protection because companies that belong to a professional organisation have generally higher accountability standards than businesses that operate independently of any professional organisation.
This principle of using the services of a company that belongs to a professional organisation also applies to the tax depreciation which is a critical service for property investors.
To protect their interests and ensure that they select a company that is fully compliant with ATO rulings, property investors should select a company that is a member of The Australian Institute of Quantity Surveyors (AIQS).
AIQS is the professional standards body for quantity surveyors throughout Australia and enjoys a close working relationship with the ATO.
Over recent years AIQS has worked with the ATO on the review and revision of the requirements for investment/rental property depreciation reporting.
DEPPRO is an Associate Member of AIQS and uses systems that are fully compliant with ATO rulings.
Property investors should understand that tax depreciation is complicated like other areas of finance or tax and so it is essential that property investors get the right advice.
For depreciation professionals, having the appropriate training and qualifications and being a member of organisations such as the AIQS is critical in ensuring you can provide the best advice for your clients.
Without it, it is impossible to keep up-to-date with legislative requirements. Companies whose representatives are not members of AIQS are also not bound by any Code of Professional Conduct.
Property investors should be weary of companies who are not members of AIQS and who employ salesmen or women touting catch phrases and a more dubious approach to providing advice in relation to tax depreciation entitlements.