{"id":6486,"date":"2015-11-29T01:00:33","date_gmt":"2015-11-28T14:00:33","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=6486"},"modified":"2015-11-29T01:00:33","modified_gmt":"2015-11-28T14:00:33","slug":"how-to-make-money-from-property-investment","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/how-to-make-money-from-property-investment\/","title":{"rendered":"How to make money from property investment – Brad Beer"},"content":{"rendered":"

 
\nThe goal of an investment property is to make money. The good news is, there are more ways to profit than just collecting rent. Brad Beer<\/a><\/strong>,\u00a0from BMT Tax Depreciation, explains.
\n <\/p>\n

Transcript:<\/h4>\n

Kevin<\/b>:\u00a0 There\u2019s an old saying in life, \u201cHappy wife, happy life.\u201d But there\u2019s another one, too, that you should bear in mind, and that is, \u201cHappy tenant is going to make you a very happy landlord.\u201d
\nOne great way to keep your tenants happy is to look at renovating your property, continually improving it, and making it a better place to live. That\u2019s the subject of this conversation I\u2019m about to have with Brad Beer from BMT Tax Depreciation.
\nOne might wonder where tax depreciation works in with renovation, Brad, but it really does have a place to play, doesn\u2019t it?
\nBrad<\/b>:\u00a0 Yes, it does. I have a few properties myself. I\u2019ve done a lot of renovations, and it always gives you a bit more choice of tenants and helps you sometimes to get that little bit of premium out of that property. Renovating the properties has always worked pretty well for me.
\nNow, the claims. You buy more things within an investment property. You spend money on capital works. There\u2019s more depreciation to claim. Definitely, you\u2019re putting your things in there, they have value, and they\u2019re starting to depreciate as soon as they\u2019re in there, so there\u2019s claims there for either the plant and equipment or those capital works that have been done.
\nKevin<\/b>:\u00a0 What are some of the big-ticket items that you can claim depreciation on that are actually going to turn the tenants on in your experience, Brad?
\nBrad<\/b>:\u00a0 People walk into a house and they look at kitchens and bathrooms straightaway and go, \u201cThat\u2019s a nice kitchen. I can see myself cooking there. Nice bathroom.\u201d After that, if there\u2019s paint coming off the walls or the carpet is really old or things like that, anything within a property that just makes it look old and tired or smelly or anything like that.
\nEven if you don\u2019t do kitchens and bathrooms, a carpet or floating timber boards. These days they have some things that are less expensive than they use to be, and they\u2019re also depreciable quicker. Tidying those things up and the paint really freshens a property up really easily and inexpensively.
\nKevin<\/b>:\u00a0 Yes. The lifespan of some of these items, too, like a new kitchen\u2026 For instance, if we spent $15,000 putting a new kitchen into a property, what kind of benefit can I expect over what period, Brad?
\nBrad<\/b>:\u00a0 The kitchen itself is seen as a capital works deduction that must be claimed, so kitchen benches, tops, and cupboards have actually got a 40-year life, which is a long time. The things like the stove or carpets \u2013 obviously, carpets aren\u2019t in kitchens very often \u2013 but things that are plant and equipment \u2013 range hoods \u2013 that don\u2019t last as long, you get to claim a fair bit quicker.
\nYour actual kitchen itself is a fairly slow claim. However, putting a new kitchen in is also about happy tenants, better tenants who\u2019ll pay a premium for those, and also making the house more valuable, so you have equity gain on that property.
\nDepreciation is not the reason to replace a new kitchen; it\u2019s a benefit at the back end of it.
\nKevin<\/b>:\u00a0 Yes. Anything that\u2019s going to keep the house in good repair is going to be good for its ongoing value. Interesting we talk here about renovations, Brad, because another part that I want to touch on, as well, and that is something you should do before the renovation, and that is work out about scrapping deductions. Tell me how they work?
\nBrad<\/b>:\u00a0 The most important thing is to make sure you have the depreciation and things worked out before you rip it apart. Renovators call the quantity surveyor first.
\nScrapping: when you decide to do some renovations, there are things within that property that probably still had some value from a depreciation aspect. Now we\u2019ve said old properties still get deductions, so we\u2019ll find out whether there are things there that could be claimed. Now any value that\u2019s left, if you throw them away, instead of continuing to depreciate them, they\u2019re an instant deduction in the year that you throw that away.
\nI\u2019ve done some renovations where I\u2019ve had $10,000 scrapping deductions before. These were things that still had value that I would have been claiming over the next five years or however long, but because I threw them away, I got an instant deduction in that year.
\nThe important thing is to look at it before you rip it apart.
\nKevin<\/b>:\u00a0 Gee, there must be a lot of renovators or investors who just don\u2019t understand that that money is sitting there, and they just totally waste it, Brad.
\nBrad<\/b>:\u00a0 Scrapping is not the tax office term; it\u2019s just an easy thing to understand. If we talk about claiming the residual value of items, people start to maybe fall asleep a little bit more. But if I say, \u201cDon\u2019t scrap and lose your money,\u201d scrapping is an easy word to understand.
\nKevin<\/b>:\u00a0 Yes. It is, indeed. It\u2019s always good talking to you, Brad Beer from BMT Tax Depreciation. Contact the guys through our website, of course. He is there to help you.
\nBrad, thanks for your time.
\nBrad<\/b>:\u00a0 Thanks, Kevin. It\u2019s always a pleasure.<\/p>\n","protected":false},"excerpt":{"rendered":"

  The goal of an investment property is to make money. The good news is, there are more ways to profit than just collecting rent. Brad Beer,\u00a0from BMT Tax Depreciation, explains.   Transcript: Kevin:\u00a0 There\u2019s an old saying in life, \u201cHappy wife, happy life.\u201d But…<\/p>\n","protected":false},"author":176692471,"featured_media":6487,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,11,13,17,18,25],"tags":[101],"class_list":["post-6486","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment","category-property-management-topic","category-sponsored-channels","tag-podcast"],"yoast_head":"\nHow to make money from property investment - Brad Beer - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/how-to-make-money-from-property-investment\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to make money from property investment - Brad Beer - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"  The goal of an investment property is to make money. The good news is, there are more ways to profit than just collecting rent. 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