The BMT Tax Depreciation 2019 investor survey revealed that 63 per cent of investors prefer to invest in second-hand property. While second-hand properties are a valuable and more affordable investment, it’s important to consider the additional benefits of buying brand-new property.
Increased tenant interest and low maintenance costs
When an investor buys a brand-new investment property, it’s usually ready to be advertised to potential tenants straight away.
Modern, brand-new properties tend to attract high tenant interest, strong rental returns and low vacancy rates depending on the market. Given that the structure and any relevant fixtures and fittings are also new, they are often more durable, requiring less maintenance and repairs.
Newer properties usually hold higher values than similar, second-hand properties in the same area. While there’s no knowing how the property market will perform, trends have proven that property values generally increase over time.
The common goals of owning an investment property are to make extra income, build equity and increase capital growth. Investors who own brand-new properties hold a head-start on the capital growth curve. Additionally, the high rental yields new properties can produce maximised cash flow and returns during ownership.
Higher deprecation benefits
Investors of brand-new investment properties are eligible to claim all deductions available on the structure and any fixed or mechanical assets.
Legislation changes made in 2017 mean owners of second-hand investment properties can’t claim depreciation on previously used plant and equipment assets. Brand-new properties aren’t affected by the 2017 legislation changes, allowing investors to claim all available deductions.
When a property is new it also allows the investor to claim all capital works deductions for the lifetime of the property (forty years), rather than just a part its lifetime. BMT Tax Depreciation find owners of brand-new investment properties an average of almost $12,000 in first full financial year deductions.
BMT Tax Depreciation has been the most trusted specialist in the industry for over 20 years. To help investors make informed decisions on the type of property they buy, BMT provides obligation-free depreciation estimates.
BMT’s tool, PropCalc, can help investors choose the best investment property for their situation. More than just a mortgage calculator, PropCalc is the essential cash flow calculator for any investor looking to buy a property. This complimentary tool allows owners to personalise data to reveal the true cost of owning any property.
To start claiming depreciation on your investment property, Request a Quote or contact the expert BMT team on 1300 728 726.
Article provided by BMT Tax Depreciation for Chan & Naylor
Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation.
Please contact 1300 728 726 or visit bmtqs.com.au for an Australia-wide service.
Chan & Naylor is Australia’s leading property, business, tax-accounting & wealth advisory group with offices nationwide.