A Finance blog by Paul Bennion.

It has been recently estimated that an average Australian wage earner would need to save up to 20% of their annual income and put it into superannuation for 45 years in order to achieve a comfortable retirement.

The reality is the vast majority of Australians would find it financially difficult to do this and that is why the average superannuation account balance is still very low. For example, the average superannuation account balance for males aged 60 to 65 is around $114,000 and $94,000 for females.

While superannuation has an important place in an overall retirements plan, the reality is that relying on it alone to fund a comfortable retirement may be unachievable for people with limited savings in their superannuation account.

That is why more and more Australians are deciding to invest in property to supplement their superannuation savings.

Investing in property is now a favoured path for a growing number of Australians to create wealth and fund a comfortable retirement.

This trend is highlighted by the fact that government figures show that around one in five Australian homeowners now own at least two properties.

Figures from the Australian Bureau of Statistics show that 21% or one in five households own a property other than their own home.

For these households, their equity in other property ($473,000) accounted for 31% of their average net worth ($1,544,000). When averaged across all Australian households, other property wealth ($100,000) represented 14% of average household wealth.

The reality is that most people dream of becoming personally wealthy and over recent years there have been an increasing number of people who have become financially independent through property investment.

This is particularly the case for property investors who hold real estate in the booing Sydney and Melbourne property markets.

This is underlined by DEPPRO’s own figures which show that a rising number of our clients own more than five investment properties as they build a successful property portfolio to fund their retirement.

The tax benefits associated with property investment is also encouraging this trend of multiple property ownership.

Property investing still allows people to claim generous tax benefits associated with negative gearing as well as depreciation.

The tax benefits associated with tax depreciation can be very signification with DEPPRO clients achieving tax benefits obtained through depreciation equivalent to 60% of the total purchase price of the property.

Many investors in Australia totally underestimate the number of items that can be depreciated for tax purposes and this comprehensive list can even include garden gnomes, cubby houses and if they own an apartment, then common areas such as car parking and recreational facilities.

To qualify for these legitimate tax deductions, an investor must have a fully compliant tax depreciation company undertake an onsite inspection of the property and then compile a depreciation report based on this inspection.

Property investors should therefore check that the company undertaking their tax depreciation schedule is a member of The Australian Institute of Quantity Surveyors (AIQS).

Employing a company who is a member of AIQS such as DEPPRO gives protection to consumers that their tax depreciation report complies is completed in a professional manner.