You’ve just purchased an investment property – what now?

Purchasing an investment property is an exciting time for investors with endless potential to generate passive income and build long-term wealth. However, it’s important that investors know what to do once the purchase stage is complete and how to prepare the property for tenants.

BMT Tax Depreciation explores what investors can do to best prepare their investment property and finances.

Secure insurance

Securing insurance is the first thing an investor should do; this will protect the property and financial interests of the investor if anything should go wrong.

Insurance policies include building insurance, landlord insurance and contents insurance if the property is furnished. Income protection should also be taken out to help ensure that financial obligations can be met in the case of a sudden loss of income due to illness or injury.

Hire a property manager

A property manager will manage the day-to-day responsibilities involved in an investment property including collecting rent and any arrears, advertising, screening and securing tenants, organising property maintenance, conducting routine inspections, property administration, communication with tenants and staying up to date with tenancy laws and other relevant information.

While hiring a property manager comes at a cost, many property investors find that the benefits outweigh the expenses.

Conduct necessary repairs and maintenance

Necessary repairs and maintenance should be carried out to help attract quality tenants and potentially reduce the likelihood of costly repairs down the track.  These repairs can include fixing any damage and ensuring all appliances are in working order.

Investors must keep in mind that repairs and maintenance costs are fully tax deductible, and remember to keep all records so it’s easier to claim at tax time. Although, for updates or renovations, investors should get in contact with a quantity surveyor before and after so their tax depreciation schedule can accurately display the available tax deductions for future years and any potential scrapping value.

Know which tax deductions you’re entitled to

Investment properties generate lucrative tax deductions for their owners including the interest on an investment loan, insurance premiums, body corporate fees, depreciation and more.

Loan interest is up the largest tax deduction for Australian property investors with a combined claim of over $21 billion in the 2019/20 financial year.

Depreciation is the second biggest deduction making up a combined claim of $6 billion in the 2019/20 financial year.

Depreciation is in a way more lucrative as investors don’t need to spend any money in order to claim it, unlike other deductions.

Depreciation is the natural wear and tear of an income-producing property and the assets within it. The Australian Taxation Office (ATO) allows owners of income-producing properties to claim this depreciation as a tax deduction.

Capital works deductions (Division 43) are claimable on the building’s structure and assets permanently fixed to the property. Plant and equipment depreciation (Division 40) is claimable on assets which are easily removable from the property or mechanical in nature. Investors can claim maximised deductions on all qualifying assets by ordering a tax depreciation schedule.

A BMT Tax depreciation schedule is a comprehensive report which outlines every available depreciation deduction over the forty-year life of the property. BMT conducts physical site inspections to ensure all schedules are maximised and fully compliant with current ATO rulings and regulations.

For more information on how investors can best take advantage of depreciation deductions within an investment property, get in touch with BMT on 1300 728 726 or Request a Quote.

 

 

 

Share:

More Posts

Strategies to get the most out of an investment property

Strategies to get the most out of an investment property   Maximise Depreciation Deductions: Maximising depreciation deductions is essential for property investors to significantly reduce taxable income, thereby lowering tax liabilities and increasing cash flow. Depreciation allows investors to deduct the cost of their property over its useful life, providing substantial tax benefits. By accurately assessing and maximising depreciation deductions,

Market Update | May 2024 Edition

Your May monthly update from Noel Jones, including the latest property market statistics and news from our team. Melbourne saw a relatively stable month during April, with many people taking time off during the Easter long weekend, school holidays and ANZAC Day break. Property prices remained stable for houses and units throughout the month, while industry-wide auction clearance rates held

Government Grants and Incentives for Melbourne’s Property Market in 2024

The Australian property market, particularly in major cities like Melbourne, has seen significant changes in recent years. While some government initiatives remain in place, new programs are less frequent. Let’s delve into the current landscape of government grants and incentives relevant to Melbourne’s property market. Existing Federal Government Initiatives: Home Guarantee Scheme (HGS): This ongoing program offers various guarantees for

Why Noel Jones Could Be Your Best Career Move

Are you passionate about the real estate industry and looking for a dynamic, supportive work environment? At Noel Jones we offer a unique blend of industry-leading training, cutting-edge technology, and a strong support system that sets us apart from the competition. Fuel Your Growth with Continuous Learning: At Noel Jones, we believe in empowering our team members to reach their

Send Us A Message

Good Job!

Thanks for taking the time to let me know about your needs.

I look forward to helping you find your new home.​

Buyer Requirements

Thank you!

I’ll be in touch soon with information on the suburb you’re buying in.

Find Out More