10 | Tax Depreciation (Case Study)

By The Property Couch May 1, 2015 in Case Study

Here are the Case Studies mentioned in Episode 10 | Tax Depreciation!

Tax Depreciation Case Study 1

A $600,000 – $700,000 period home with a rental income of $22,880 per annum

An investor owns a period home purchased for between $600,000 and $700,000 with a rental income of $440 per week.

Expenses for their property such as interest, rates and management fees totaled to $40,950. A depreciation schedule from specialist Quantity Surveyors BMT Tax Depreciation found the investor would be entitled to claim $9,880 in depreciation in the first financial year. By claiming depreciation deductions, BMT was able to help the investor to turn their negative cash flow into a more positive one, reducing the costs involved in holding the property by $3,655.

The following scenario shows the investor’s cash flow with and without the depreciation claim:

This investor used property depreciation to reduce the costs of holding their property. Without depreciation, they were paying $219 per week. By taking advantage of tax legislation and making a depreciation claim, the weekly cost of holding the property is reduced to $149.

Tax Depreciation Case Study 2

A $400,000 – $500,000 older villa with a rental income of $21,060 per annum

An investor owns an older villa purchased for between $400,000 and $500,000 with a rental income of $405 per week.

Expenses for their property such as interest, rates and management fees totalled to $29,610. A depreciation schedule from specialist Quantity Surveyors BMT Tax Depreciation found the investor would be entitled to claim $7,930 in depreciation in the first financial year. By claiming depreciation deductions, BMT was able to help the investor turn their negative cash flow into a more positive one, reducing the costs involved in holding the property by $2,935.

The following scenario shows the investor’s cash flow with and without the depreciation claim:

This investor used property depreciation to reduce the costs of holding their property. Without depreciation, they were paying $104 per week. By taking advantage of tax legislation and making a depreciation claim, the weekly cost of holding the property is reduced to $47.

Case studies provided by BMT Tax Depreciation.
Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT Tax Depreciation.

10 | Tax Depreciation

By The Property Couch May 1, 2015 in Podcast, Property Investment

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If you were to ask an investor if they wanted to save $149 per week on a property, we can guarantee you that no one would say no…

BUT that’s exactly what too many folks are doing when they don’t use tax depreciation right! (Check out the case studies at the bottom if you don’t believe this number…)

Today we’re excited to be discussing this topic with the help of our good friend and first-ever guest to the show: Bradley Beer!

As the Managing Director of BMT Quantity Surveyors (experts at tax depreciation), Brad explains exactly what tax depreciation is and how and when you can use it!

Buying a property for its depreciation, however, should NEVER be your main reason for investing!

Instead, we unpack the important depreciation factors you should be looking at…

Like why 1985 and 1987 are very important years when it comes to tax depreciation.

We’ll also be explaining what quantity surveyors do and hearing some true stories from Bryce and Ben!

So tune in now for the gold on tax depreciation! (Yes, we say tax depreciation way too much in the episode too 😉)

Free Stuff Mentioned

- Just starting your property investing journey? Check out our FREE Binge Guide to the Foundations of Property, Finance and Money Management, which show you which episodes you need to understand the basics! Or fill in the form below and we’ll email it to you right away!

- Brad’s case studies that he has prepared for the podcast can be accessed here! The first is a $600,000 – $700,000 period home with a rental income of $22,880 per annum and the second is a $400,000 – $500,000 older villa with a rental income of $21,060 per annum.
- Interested in using BMT? Get the BMT Tax Depreciation Application Form here.

Here’s some of the gold we cover…

0:50 – Meet Brad Beer!
1:26 – What’s the benefit of a tax depreciation schedule?
2:00 – How Bryce’s friend benefited from one!
2:45 – Did you know you can get cash back?
4:00 – What do Quantity Surveyors do?
4:38 – Ben’s Franking Credit analogy
6:07 – WHY you should use tax depreciation
7:30 – This is why education is important!
8:09 – Why are 1985 and 1987 important dates?!
9:54 – So when do you get depreciation in a period home
10:55 – The challenge with depreciation is…
11:40 – Improving YOUR net yield
12:40 – The process to determine your tax depreciation!
14:50 – Renovation and depreciation
16:00 – The lump sum scrapping approach
17:49 – Why you shouldn’t do tax depreciation after renovations
18:20 – Learn from Ben’s story!
19:40 – WHY it’s worth it to use BMT
20:15 – Some gold tax depreciation case studies!

008 | Investment Stock vs. Investment Grade

By The Property Couch April 17, 2015 in Podcast, Property Investment, Real life stories

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Well folks, after eight long weeks of waiting, we’ve FINALLY reached our most anticipated topic yet…investment stock vs. investment grade properties!

Did you know…there’s a higher percentage of investors who’ve sold their property for less than their original purchase price than owner-occupied properties? 💸

Yep, that’s sadly true. That’s why in today’s episode, we’re diving deep into what investment stock actually is, how it differs from investment-grade properties…

...and how to know if YOU’RE being spruiked into buying stock!

We’re also examining the science behind investment grade properties, why depreciation shouldn’t be the end-all, and how becoming a borderless investor can benefit you!!

PLUS, guess what milestone we’ve just achieved…

A HUGE thank you to all our listeners and those who have left us a review! We love hearing from you so please keep those reviews and questions coming in!

Free Stuff Mentioned

Just starting your property investing journey?

Check out our FREE Binge Guide to the Foundations of Property, Finance and Money Management, which show you which episodes you need to understand the basics! Or fill in the form below and we’ll email it to you right away.

Here’s some of the gold we cover…

1:19 – What are some concerns for investors today?
2:10 – What is Investor Stock?
3:00 – Why Investor Stock can cause losses
4:50 – How to tell if your advisor has your best interests at heart
6:00 – The Enthusiastic Amateur (BE WARNED!)
7:43 – How to know you’re not being sold Investment Stock!
8:35 – Don’t invest in property for THESE perks!
9:06 – Why ________ shouldn’t be the end-all
10:07 – The science behind Investment Grade properties!
11:27 – How WE look for properties
14:00 – Why FOMO is an indicator NOT to buy!
16:33 – How to be a borderless investor
17:29 – Why investing is all about the ____!
18:22 – How you can stay educated on investing
19:20 – We’ve hit WHAT milestone?!

005 | Four Pillars of Mastery – Asset Selection

By The Property Couch March 27, 2015 in Podcast, Property Investment, Property Investment Formula

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We’re going to let you in on a secret for selecting great assets…

Look at the big picture BEFORE the property!

That’s right folks! We’ll be discussing this (and more) as part of the third episode – which focuses on A for Asset Selection in our ABCD Property Investment Formula.

And while most think they score an A+ in this area, we look at a couple of pitfalls that can cause people to score an F!

Bryce discusses why you should avoid being sold on “the bling!” (Think shiny taps and sparkling stainless steel…yep, he definitely fell for that one 😉)

…and instead, what other areas you should be focusing on when selecting an asset!

Is investing in new or old properties better? And how important is location and land value?

On top of that, we look at the big question on everyone’s mind: Who should you be taking property investing advice from anyway??

Tune in for all this and more in today’s episode!

✨ Plus don’t miss Ben’s golden return ratio which could completely change the way you select your assets! ✨

Free Stuff Mentioned

Just starting your property investing journey? Check out our FREE Binge Guide to the Foundations of Property, Finance and Money Management, which show you which episodes you need to understand the basics! Or fill in the form below and we’ll email it to you right away.

Here’s some of the gold we cover…

1:40 – The Big Picture of Asset Selection
2:33 – Folks, property is an emotional asset!!
3:00 – What is the growth story?
4:12 – A bit of gold for our listeners…
4:45 – Why are medium and high-density areas different to this golden rule?
6:00 – Why is asset location so important?
7:10 – Ben’s “ugly duckling to swan” property story!
8:15 – Using the telescope vs. microscope approach
9:25 – Bryce’s first property: Don’t be sold on the bling too!
10:10 – What is the buyer’s quadrant?
11:28 – First-time property investors – don’t be seduced by ____!
13:31 – How new properties are sold
15:15 – The generational difference: Apartments vs. houses
16:30 – It’s NOT about land content, it’s about…
18:00 – A good rule of thumb for land-to-asset ratio!
19:30 – WHO should you be taking advice from when buying an investment property?
22:00 – Send us your questions!

002 | Regulation vs Education

By The Property Couch March 6, 2015 in Podcast, Property Investment, Real life stories

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In a time of growing self-managed super funds and heated markets, what should we be valuing more: regulation or education??

In this episode, we’re unpacking the role regulation plays (especially in the wake of the Murray Review and changing limited recourse borrowing arrangements)

…and looking at why education is important for ALL!

That’s right folks, many marketeers and those giving the advice aren’t receiving the right training 🤯🤯🤯 – tune in to find out why!

We’ll also unpack Australia’s most heated markets right now, how YOU can break into those markets and why the property market is actually unfair to the everyday investor.

(Phew, that’s a lot of wisdom there!)

If you’re ready to get educated, tune in now! 😉

Free Stuff Mentioned

Replay “How to Master the Property Investment Formula that Works in Any Market?” Webinar:  Beginner’s Guide to Property Investment here!
Just starting your property investing journey? Check out our FREE Binge Guide to the Foundations of Property, Finance and Money Management, which show you which episodes you need to understand the basics! Or fill in the form below and we’ll email it to you right away!

Here’s some of the gold we cover…

0:46 – Self-managed super funds and borrowing today
2:19 – THIS is more important than regulation!
4:45 – Why consumers and marketeers need education
6:15 – The feedback cycle
7:21 – When it’s best to buy into the market!
7:58 – Ben’s message to Sydney and Melbourne property investors
10:25 – Which is better for investing: Established or new properties?
11:35 – A strategy for buying in heated markets
11:59 – HOW many more properties will be built by 2055?!?
12:30 – If you take away anything, LET IT BE THIS
12:50 – Why the property market is unfair!
15:02 – Our opinion on student accommodation
15:25 – Investment grade vs investment stock
16:45 – Send us your questions!

Tax Depreciation Case Study 1

A $600,000 – $700,000 period home with a rental income of $22,880 per annum

Tax Depreciation Case Study 2

A $400,000 – $500,000 older villa with a rental income of $21,060 per annum

Free Stuff Mentioned

Here’s some of the gold we cover…

Free Stuff Mentioned

Here’s some of the gold we cover…

Free Stuff Mentioned

Here’s some of the gold we cover…

Free Stuff Mentioned

Here’s some of the gold we cover…

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