{"id":7130,"date":"2016-02-17T10:52:47","date_gmt":"2016-02-16T23:52:47","guid":{"rendered":"http:\/\/www.realestatetalk.com.au\/?p=7130"},"modified":"2016-02-17T10:52:47","modified_gmt":"2016-02-16T23:52:47","slug":"want-the-secret-to-future-cash-flow-success","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/want-the-secret-to-future-cash-flow-success\/","title":{"rendered":"Want the secret to future cash flow success?"},"content":{"rendered":"

Calculate depreciation deductions before purchasing your next property<\/strong>
\nInvestors often question the ongoing costs associated with a potential purchase. When considering the purchase it is important to ensure there will be a maximum cash return.
\nThere\u2019s a myriad of expert advice available and every investor has their list of essential property inclusions.
\nAstute investors consider the potential rental return of the property, the property\u2019s location in proximity to local services and facilities, local employment drivers and historical growth of properties within the area. Meanwhile, other investors limit their options by only looking at properties within close proximity to their home.
\nTo get a true calculation of a property\u2019s ongoing cost, investors should calculate the tax deductible costs and other deductions available, such as property management fees, rates, interest, repairs and maintenance and property depreciation.
\nThese deductions add to the investor\u2019s net cash return and every deductible dollar is returned to the owner at their marginal tax rate.
\nThe amount of depreciation available varies significantly from property to property and can be difficult to estimate. For this reason, investors often fail to consider the financial benefit of claiming depreciation prior to making their purchase. By incorporating depreciation calculations prior to making a purchase, an investor may find the property to be more affordable.
\nCase study<\/strong>
\nVanessa and Greg have been looking to buy a townhouse as an investment. A property they have recently seen listed, a two bedroom townhouse on offer for $495,650, is in great proximity to schools, shops, public transport and a park.
\nBefore making an offer, Vanessa and Greg have completed some preliminary research by asking their Property Manager for a rental appraisal of the property. This appraisal found the property to have an expected rental income of $505 per week, or $26,260 per annum.
\nVanessa and Greg also estimated the costs involved in owning the property should they decide to go ahead with the purchase. These costs totalled $35,639 and included interest, property management fees, rates, repairs and maintenance.
\nVanessa and Greg were aware that once the property became income producing they would be entitled to claim depreciation deductions for both the building structure and the plant and equipment assets. They contacted a Quantity Surveyor for a depreciation estimate, who found that they would be able to claim approximately $9,500 in depreciation deductions in the first full year.
\n\"bmt\"
\nThis example shows how including depreciation in the calculations prior to making a purchase can really assist the buyer in making an informed decision.
\nWithout depreciation, the property investor would experience a loss of $114 per week during the first year of owning the property. By claiming depreciation, this cost is reduced to $46, saving them $68 per week or $3,536 in the first year of ownership.
\nOnce an investor has made their purchase and the property becomes income producing, the income earned from depreciation can make a big difference to the owner\u2019s cash flow.
\n\"bmtArticle provided by BMT Tax Depreciation.<\/strong>
\nBradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT Tax Depreciation.<\/strong>
\nBradley joined BMT in 1998 and as such he has substantial knowledge about property investment supported by expertise in property depreciation and the construction industry.<\/strong>
\nBradley is a regular keynote speaker and presenter covering depreciation services on television, radio, at conferences and exhibitions Australia-wide. Please contact 1300 728 726 or visit www.bmtqs.com.au<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Calculate depreciation deductions before purchasing your next property Investors often question the ongoing costs associated with a potential purchase. When considering the purchase it is important to ensure there will be a maximum cash return. There\u2019s a myriad of expert advice available and every investor…<\/p>\n","protected":false},"author":176692471,"featured_media":5106,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,34,17,25],"tags":[],"class_list":["post-7130","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bmt","category-finance-topic","category-property-investment","category-sponsored-channels"],"yoast_head":"\nWant the secret to future cash flow success? - 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\/want-the-secret-to-future-cash-flow-success\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Want the secret to future cash flow success? - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"Calculate depreciation deductions before purchasing your next property Investors often question the ongoing costs associated with a potential purchase. 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