Property Depreciation: The Key To Increasing Your Cash Flow

Property Depreciation: The Key To Increasing Your Cash Flow

Are you struggling to service one or multiple negatively geared investment properties?

Would you like to increase your cash flow?

Did you know owners of properties which generate an income are eligible for significant taxation benefits?

Research shows that 80% of property investors are failing to take full advantage of property depreciation and are missing out on thousands of dollars in their pockets.

Depreciation is often missed because it is a non-cash deduction. The investor does not need to spend money to claim it. As a building gets older, items wear out – they depreciate. The Australian Taxation Office (ATO) allows property owners to claim this depreciation as a deduction.

Depreciation Example: An investor profile

An investor has purchased a property for $420,000 and is receiving $490 per week in rent for a total income of $25,480 per annum. The estimated expenses for the property include interest, rates and management fees, which total $32,000 per annum. The following scenario shows the investor’s cash flow with and without depreciation. A typical $420,000 unit will depreciate by around $11,500 in the first full financial year.

Tax Depreciation- www.pumpedonproperty.com

In this example the investor uses property depreciation to go from a negative cash flow scenario, paying out $79 per week, to a positive cash flow scenario, earning $3 per week on the property. By claiming depreciation this investor will save $4,255 for the year.

To learn more about property depreciation, visit the BMT Tax Depreciation page for investors here.

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About

Brad has over 15 years experience in the property depreciation, building and construction industry and became the Director of BMT in 2002. As a result he has substantial knowledge and specialist experience in property tax depreciation and construction cost consulting. Brad is actively involved in educating property investors about the importance of tax depreciation and is regularly featured on the Sky News Business Channel.