Investing in property and companies can be very rewarding, but it involves the following key risks:


1. Loss of Capital

Property prices can go down as well as up and different property types or those in different areas may be more or less susceptible to reduced or negative growth. By investing in property through Property Moose, there is a risk that you may not get back what you put in if property prices fall. You should not invest more money through the platform than you can afford to lose without altering your standard of living.


2. Illiquidity

Any investment you make through the platform will be highly illiquid. This means that you are unlikely to be able to sell your shares until and unless the investee company is sold or the property is sold at the end of the investment term. The securities you purchase through the platform are not listed on any exchange.


3. Rarity of Dividends

If a property receives rent this will be paid to the investors as a dividend net of any fees, costs and expenses. However, should a property not produce rent, or the rent be insufficient to cover the costs and expenses of operating the property, no dividends will be paid and you will be unlikely to see any return on your investment until the property is sold.


4. Diversification

Investing in property and unlisted shares should only be done as part of a diversified portfolio. This means that you should invest relatively small amounts in multiple businesses rather than a lot in one or two businesses. It also means that you should invest only a small proportion of your investable capital in startups as an asset class, with the majority of your investable capital invested in safer, more liquid assets.


5. Tax

You will be responsible for the payment of your own tax which may include capital gains and/or income tax. We do not provide tax advice and you should seek independent tax advice before investing if you are unsure of your position. It is still your responsibility to ensure that your tax return is correct and is filed by the deadline and any tax owing is paid on time. If you are unsure how this investment will effect your tax status you must seek professional advice before you invest. Each company you invest in will be liable for, and pay, corporation tax and any returns you receive will be paid to you net of any corporation tax due.


6. Advice

Property Moose does not give investment advice or provide analysis or recommendations regarding investment opportunities. Investments can only be made by members of Property Moose on the basis of information provided. Property Moose takes no responsibility for this information or for any recommendations, opinions or predictions.


7. Past Performance

Past performance is not a reliable indicator of future results. You should not rely on any past performance as a guarantee of future investment performance.


8. Future performance

Any projections of future performance are based on the internal calculations and opinions of Property Moose and are subject to change at any time. Forecasts are not a reliable indicator of future results and should not be relied on.


9. Financial Services Compensation Scheme

Investing through Property Moose is not covered by the Financial Services Compensation Scheme.


10. Client Classification

Before being allowed to invest, you will need to be classified as an investor type. You will need to provide the relevant information to us, which you warrant to be truthful and accurate, in order that we can classify you. Please follow the steps when signing up to complete this process. If you no longer fall into at least one of the categories of investor available, you will give immediate written notice to Property Moose and you will not access, or try to access the service unless and until you fall into one or more of these categories again.


11. Jurisdiction

The information and services provided on the Site are not provided to, and may not be used by, any person or entity in any jurisdiction where the provision or use thereof would be contrary to applicable laws, rules or regulations of any governmental authority or where Property Moose is not authorised to provide such information or services. Some products and services described in the Site may not be available in all jurisdictions or to all clients.

This list of risk factors does not necessarily outline all possible risks involved. Prospective investors should read the Property Moose terms and conditions in their entirety and consult with their own advisers before deciding whether to invest. If you are unsure about any aspect of the information provided by the company, you should seek advice from an independent financial adviser.


The residential investment property market is under stress. It has desperately needed a new product, and major revamp, for some time.

Out of this adversity the Property Collect team are preparing to snap up great buys in strategic areas for investors to profit.

Property Collect has their residential investment trust registered with ASIC and their responsible entity and other compliance structures in place. They are ready.

“I think Property Collect will revolutionise the residential investment property market,” veteran property director and Property Collect founder Tim Wright said.

“Our BuyPower and BuildPower products are innovative, simple and the way of the future.”

With the Banking Royal Commission putting pressure on residential housing prices and APRA’s lending curbs stymying investor loans – the time is ripe for Property Collect.

When the right properties are uncovered, Property Collect wants to be “poised to strike”.

“We are all about research and value for our investors,” Wright said.

The Property Collect team has a mission to raise Australian investment property ownership from the current 1.9 million people today to 2.5 million people over a 5-year period.

“In this financial climate, residential property investors need to look at property in a whole new way.

“With record levels of personal debt and the financial burden now placed on property investors, it is becoming increasingly difficult for first time and repeat property investors to get into the market.”

Wright says the new “collective investment” model has strategic advantages over traditional property syndicates.

“With lower barriers to entry, safer exit structures, improved investor liquidity and a refined investment formula for returns, the Property Collect syndication program will be the first of its kind in Australia.”

“There is no longer any reason smaller investors should be left out of the property market.”

Wright says that the pool of residential property investors in Australia with cash availability between $20,000 to $80,000 was far larger than those who had more than the $90,000-plus required to purchase their investment property, and hence an alternative “bricks and mortar” investment solution was necessary to allow people to experience the benefit of residential property investment.

Property investors interested in making the most of their deductions may not be aware investment in new properties can hold almost $9,000 of tax deductions, according to Bradley Beer, CEO of BMT Tax Depreciation

“I would be surprised if thousands of investors couldn’t make claims exceeding $10,000 after owning a new investment property for a year,” Mr Beer said.

Investors are allowed to claim deductions on general property aging wear and tear and internal items breaking down, which is referred to as depreciation.

The first step on claiming depreciation, according to BMT Tax Depreciation, is on capital works deductions on a property’s structure and items permanently connected to the property, which can total $5,065 for one year.

This can then be repeated for the next 40 years, starting from the construction of the property.

Investors can also claim depreciation on removable plant and equipment assets.

These include:

  • Carpets (for $1,285);
  • Blinds (for $829);
  • Ovens (for $354);
  • Hot water systems (for $331);
  • Garbage bins (for $296);
  • Smoke alarms (for $268);
  • Cooktops (for $176);
  • Door closers (for $167); and
  • Exhaust fans (for $122).

Hanging onto a property for two years can result in even higher depreciation values, as Mr Beer noted many items depreciate at a higher rate in the second year.

Renovations can not only add value to a property, but also allow investors to find even more deductions to claim.

“Renovations can also be especially lucrative for property investors so they would be wise to review the depreciation value of different items before deciding on their final renovation strategy, as they may be able to offset some of the cost of the upgrade by being clever with what they purchase and how they renovate,” Mr Beer said.

While this is all applicable for new properties, Mr Beer mentioned second-hand properties are only applicable if contracts were exchanged before 7.30pm, 9 May 2017.

Investing in property and companies can be very rewarding, but it involves the following key risks:


1. Loss of Capital

Property prices can go down as well as up and different property types or those in different areas may be more or less susceptible to reduced or negative growth. By investing in property through Property Moose, there is a risk that you may not get back what you put in if property prices fall. You should not invest more money through the platform than you can afford to lose without altering your standard of living.


2. Illiquidity

Any investment you make through the platform will be highly illiquid. This means that you are unlikely to be able to sell your shares until and unless the investee company is sold or the property is sold at the end of the investment term. The securities you purchase through the platform are not listed on any exchange.


3. Rarity of Dividends

If a property receives rent this will be paid to the investors as a dividend net of any fees, costs and expenses. However, should a property not produce rent, or the rent be insufficient to cover the costs and expenses of operating the property, no dividends will be paid and you will be unlikely to see any return on your investment until the property is sold.


4. Diversification

Investing in property and unlisted shares should only be done as part of a diversified portfolio. This means that you should invest relatively small amounts in multiple businesses rather than a lot in one or two businesses. It also means that you should invest only a small proportion of your investable capital in startups as an asset class, with the majority of your investable capital invested in safer, more liquid assets.


5. Tax

You will be responsible for the payment of your own tax which may include capital gains and/or income tax. We do not provide tax advice and you should seek independent tax advice before investing if you are unsure of your position. It is still your responsibility to ensure that your tax return is correct and is filed by the deadline and any tax owing is paid on time. If you are unsure how this investment will effect your tax status you must seek professional advice before you invest. Each company you invest in will be liable for, and pay, corporation tax and any returns you receive will be paid to you net of any corporation tax due.


6. Advice

Property Moose does not give investment advice or provide analysis or recommendations regarding investment opportunities. Investments can only be made by members of Property Moose on the basis of information provided. Property Moose takes no responsibility for this information or for any recommendations, opinions or predictions.


7. Past Performance

Past performance is not a reliable indicator of future results. You should not rely on any past performance as a guarantee of future investment performance.


8. Future performance

Any projections of future performance are based on the internal calculations and opinions of Property Moose and are subject to change at any time. Forecasts are not a reliable indicator of future results and should not be relied on.


9. Financial Services Compensation Scheme

Investing through Property Moose is not covered by the Financial Services Compensation Scheme.


10. Client Classification

Before being allowed to invest, you will need to be classified as an investor type. You will need to provide the relevant information to us, which you warrant to be truthful and accurate, in order that we can classify you. Please follow the steps when signing up to complete this process. If you no longer fall into at least one of the categories of investor available, you will give immediate written notice to Property Moose and you will not access, or try to access the service unless and until you fall into one or more of these categories again.


11. Jurisdiction

The information and services provided on the Site are not provided to, and may not be used by, any person or entity in any jurisdiction where the provision or use thereof would be contrary to applicable laws, rules or regulations of any governmental authority or where Property Moose is not authorised to provide such information or services. Some products and services described in the Site may not be available in all jurisdictions or to all clients.

This list of risk factors does not necessarily outline all possible risks involved. Prospective investors should read the Property Moose terms and conditions in their entirety and consult with their own advisers before deciding whether to invest. If you are unsure about any aspect of the information provided by the company, you should seek advice from an independent financial adviser.

This is a guest post written by Ann Carr. The views expressed in this article are not necessarily shared by Property Moose or DFI Financial Services. 

With house prices rising year on year, many people are finding it harder than ever to buy their first home.

Knowing this is a problem that has been around for a long time, in December 2015 the UK government announced the launch of the help to buy ISA, a special ISA designed to help savers get on the property ladder sooner by boosting their house deposit funds with government money.

The Help to Buy ISA

A Help to Buy ISA is a specialist government savings scheme specifically designed to help people buy their first home. It’s an account designed to speed up the time it takes you to save up your deposit.

There are criteria for you to qualify for the Help to Buy ISA though…

  • You must be classified as a first time buyer.
  • You cannot own a property anywhere else in the world.
  • You must be aged 16 or over.
  • You can use it to buy any home worth up to £250,000 (£450,000 in London).
  • You can use a Help to Buy ISA with any mortgage; you’re not restricted to a Help to Buy mortgage.

Like any other ISA, the help to buy ISA is a tax-free savings account. The difference here is that the government will boost your savings by 25%, up to a maximum value of £3,000 when you save £12,000.

The minimum amount you can save to qualify for the 25% government bonus is £1600, which will give you £400.

If you take advantage to of the scheme fully, you’ll be able to turn your £12,000 deposit into a £15,000 one!

How Do I Get The Money?

You don’t. Your solicitor or conveyancer will apply for the money when your offer on a new home has been accepted. It has to be done at this point – you can’t apply for the money afterwards as it is too late.

When the money is received it will be added to the total deposit you are putting towards your first home. The lender will then calculate your mortgage based on the deposit plus the additional money the government are contributing.

Maximum Contributions

The maximum monthly contribution you can make to the ISA is £200 per month, meaning you can save £2,400 per year.

You can still save other money in separate accounts, but the Help to Buy ISA is limited to £200 per month.

When Can I Open a Help to Buy ISA?

Any time you like, but the sooner the better! The scheme will remain open until 30th November 2019, so as long as you apply before that date you’ll be able to save in the account.

The government bonus is available until 2030 at present, so as long as it is claimed by then you’ll still have access to the money.

How Can I Open a Help to Buy ISA?

All of the major banks and building societies will offer a Help to Buy ISA. Their rate of interest will vary of course, but they will be easy to set up.

If you already have an ISA, you can transfer the money into your Help to Buy ISA, giving it a nice little boost to start with!

For the best rates on Help to Buy ISA’s, you can always check out Money Supermarket, where you’ll find the best rates available on the market.

Who Can’t Have a Help to Buy ISA?

There are certain exclusion criteria for the Help to Buy ISA, so check that none of the following apply to you before you try to open one….

  • You can’t use a Help to Buy ISA if you’re going to rent out the property as an investment.
  • You can’t use a Help to Buy ISA to buy an overseas property.
  • You can’t have more than one Help to Buy ISA.
  • You can’t open a Help to Buy ISA and a normal Cash ISA in the same tax year. You can transfer your cash ISA balance into your Help to Buy ISA however.

Once you have checked that the inclusion and exclusion criteria make you eligible for a Help to Buy ISA, either apply in store or online and start saving!

If you are in the position to take advantage, it’s certainly worth your while doing so – the government bonus on your cash is significantly better than any interest rate you’d get on most savings products in the market.

Anwyl Homes are a leading house builder with developments across North England and Wales. For more information on how you can apply for help to buy a new build house contact their team.

 

 

Many are speculating that stagnant wages and rising house prices have caused the housing market to hit an affordability ceiling point as price growth fell from 3.4% to 3.2% in September for residential property sales.

Whilst residential property sales begin to decline, commercial property is beginning to boom.

Simon Bath, CEO of digital conveyancing platform, When You Move, commented: “The House Price Index shows a north-south divide: housing markets in London and the South-East have slowed. London still remains the most expensive region in the country to purchase a home and therefore, the financial commitment of buying in London can be off-putting for both domestic and international investors and first-time buyers.

“Housing markets in London and the south-east have slowed: prices in London fell 0.7 per cent in the year to June, according to the ONS, coupled with transaction levels in the capital down by 20 per cent year on year. The prices are heftier, the commitment is more taxing, equally, the number of homes being placed on the market for £2m or more was down 25 per cent in the third quarter of 2018 compared with a year before.”

Commercial property lending increased by 27% in the first half of 2018 according to Cass Business School’s latest UK Commercial Real Estate Lending Report.

From January to June, £22.5 billion worth of lending in commercial real estate was enjoyed; a 27% rise on the same time last year.

Although investment was down 2% based on 2017 figures, the £25.4 billion worth of investment highlights a real appetite for commercial property in the uncertain property market.

53% of the agreed lending in the opening six months of 2018 came from acquisition finance and 14% of loans went towards financing property portfolios.

Whilst residential buyers are struggling to buy in London or put off by the potential property affordability ceiling point, 61 per cent of newly originated loans have targeted London and South East England.

Ion Fletcher, Director of Finance Policy at the British Property Federation, said: “The UK’s commercial property lending market was “in fairly good shape,” particularly in light of ongoing political uncertainties surrounding Brexit.”

Neil Odom-Haslett, President of the Association of Property Lenders, added: “Overall the headwinds have got a little bit stronger and its testament to the current lending culture that as a real estate lending community we are managing them appropriately.”

Have you noticed an increase in commercial property transactions? Is this positive for the property market?

Investing in property and companies can be very rewarding, but it involves the following key risks:


1. Loss of Capital

Property prices can go down as well as up and different property types or those in different areas may be more or less susceptible to reduced or negative growth. By investing in property through Property Moose, there is a risk that you may not get back what you put in if property prices fall. You should not invest more money through the platform than you can afford to lose without altering your standard of living.


2. Illiquidity

Any investment you make through the platform will be highly illiquid. This means that you are unlikely to be able to sell your shares until and unless the investee company is sold or the property is sold at the end of the investment term. The securities you purchase through the platform are not listed on any exchange.


3. Rarity of Dividends

If a property receives rent this will be paid to the investors as a dividend net of any fees, costs and expenses. However, should a property not produce rent, or the rent be insufficient to cover the costs and expenses of operating the property, no dividends will be paid and you will be unlikely to see any return on your investment until the property is sold.


4. Diversification

Investing in property and unlisted shares should only be done as part of a diversified portfolio. This means that you should invest relatively small amounts in multiple businesses rather than a lot in one or two businesses. It also means that you should invest only a small proportion of your investable capital in startups as an asset class, with the majority of your investable capital invested in safer, more liquid assets.


5. Tax

You will be responsible for the payment of your own tax which may include capital gains and/or income tax. We do not provide tax advice and you should seek independent tax advice before investing if you are unsure of your position. It is still your responsibility to ensure that your tax return is correct and is filed by the deadline and any tax owing is paid on time. If you are unsure how this investment will effect your tax status you must seek professional advice before you invest. Each company you invest in will be liable for, and pay, corporation tax and any returns you receive will be paid to you net of any corporation tax due.


6. Advice

Property Moose does not give investment advice or provide analysis or recommendations regarding investment opportunities. Investments can only be made by members of Property Moose on the basis of information provided. Property Moose takes no responsibility for this information or for any recommendations, opinions or predictions.


7. Past Performance

Past performance is not a reliable indicator of future results. You should not rely on any past performance as a guarantee of future investment performance.


8. Future performance

Any projections of future performance are based on the internal calculations and opinions of Property Moose and are subject to change at any time. Forecasts are not a reliable indicator of future results and should not be relied on.


9. Financial Services Compensation Scheme

Investing through Property Moose is not covered by the Financial Services Compensation Scheme.


10. Client Classification

Before being allowed to invest, you will need to be classified as an investor type. You will need to provide the relevant information to us, which you warrant to be truthful and accurate, in order that we can classify you. Please follow the steps when signing up to complete this process. If you no longer fall into at least one of the categories of investor available, you will give immediate written notice to Property Moose and you will not access, or try to access the service unless and until you fall into one or more of these categories again.


11. Jurisdiction

The information and services provided on the Site are not provided to, and may not be used by, any person or entity in any jurisdiction where the provision or use thereof would be contrary to applicable laws, rules or regulations of any governmental authority or where Property Moose is not authorised to provide such information or services. Some products and services described in the Site may not be available in all jurisdictions or to all clients.

This list of risk factors does not necessarily outline all possible risks involved. Prospective investors should read the Property Moose terms and conditions in their entirety and consult with their own advisers before deciding whether to invest. If you are unsure about any aspect of the information provided by the company, you should seek advice from an independent financial adviser.

Apart from holding multiple residential and commercial properties, including caravan parks and motels across multiple states, Property Alchemy’s Penelope Valentine also provides property management services for her fellow investors, particularly in the Northern Beaches, South Coast and eastern and western suburbs of New South Wales.

As an investor and a property professional, Ms Valentine works to understand the fluctuations that have been happening in most major property markets in the country, particularly in Sydney and Melbourne, which continuously see value declines following the end of the property boom.

However, despite the negative headlines in the media, she remains positive about the assets that she holds and manages in the capital cities.

According to Ms Valentine: “I think there’s so much hype in the media but the media needs hype to sell, right? Actually, we’re just going through a market cycle. I don’t know whether people remember, but these cycles happen.”

Right now, it’s business as usual, and the investors who are able to thrive in the current market are those who continue to make logical decisions, as usual.

“Properties may take a week longer to lease, but there’s things you can do to lease a property, and it’s not just all about dropping the rent. It’s price presentation and positioning, too. We can always find great tenants if we make sure to listen to what’s going on in the market react quickly.”

“You can’t just keep doing the same thing and expect a different result. You have to be proactive and you need to have a great database. You’ve got to do a bit more hustle—that’s what it’s about,” the investor and property manager highlighted.

Being able to hold and maintain assets for the long-term has become more critical to property investment success as the Australian property market continue to go through a softening phase.

As such, identifying the right property manager could spell the difference between thriving in the market and delaying a wealth-creation journey. Ms Valentine believes that every investor must understand the process of the property manager before ultimately getting them onboard.

“A lot of people just go to an agency and then get given a property manager. They don’t know if that property manager just started their career a couple months ago or if they’re on their way out or they’re aspiring to be a sales agent or if they’ve been trained properly,” she said.

Ms Valentine strongly encouraged investors to take the time to conduct a few interviews in order to get acquainted with their entire process and understand how it can fit into your broader investment strategy.

At the end of the day, it’s going to be a relationship between the investor and the property manager and as such, understanding is key to fruitful collaborations moving forward.

“Understand who’s going to be communicating with you and how do they operate, what do they do differently from other property managers,” she said.

Finally, Ms Valentine stressed the importance of tenure in order to avoid the hassle of having to ‘start from the bottom’. According to her, the average tenure of good property managers is 18 months.

According to her: “If you start building a relationship with a property manager and they know everything about one of your properties, then they leave and you get someone new coming in, you have to educate this person again on what’s happening with your property, what happened with the last tenant. It’s a lot of work for an investor. When you choose to give your investment property to an agency or property manager, understand how they operate.”

In today’s market, the resilience and discipline of property professionals are becoming more important for investors who want to continue to thrive in the business of creating wealth.

By making sure that they got the best managers, investors can continue riding the waves of the property market and ultimately maximise the wealth-creation potential of their portfolio, Ms Valentine highlighted.

 

Tune in to Penelope Valentine’s episode on The Smart Property Investment Show to know more about her secrets to thriving in the current property market of Australia.

Have you wondered what is depreciation and how a depreciation schedule can save you money?

Depreciation is a powerful tool to help investors maximise their cashflow, minimise the holding costs associated with investing and minimise their tax.

A lot has been written about various nuances within tax legislation and construction estimating.

So I wanted to take a moment to get back to the basics and things that everyone should know about a depreciation schedule, so here goes.

depreciation schedule

 

1. WHAT IS DEPRECIATION?
1. WHAT IS DEPRECIATION?

 

In essence depreciation is a reduction in value of an asset over time.

Property Invest


Under
income tax law, you are allowed to claim certain deductions for expenditure incurred in gaining or producing assessable income, for example, in carrying on a business such as property investment.

Since the value of some assets decline over their effective life you may be able to claim a deduction for the depreciating cost of that asset.

Just like you claim wear and tear on a car purchased for income producing purposes, or for a computer used for business, you can also claim the depreciation of your investment property against your taxable income.

 

2. WHAT IS A DEPRECIATION SCHEDULE?
2. WHAT IS A DEPRECIATION SCHEDULE?

 

A depreciation schedule is simply a report that shows you the deductions you’re able to claim on your investment property each year, based on the decline in value of the structure and assets within (where they qualify).

Depreciation is not available to your principal place of residence; remember the property must be income producing.

 

3. WHAT IS A DEPRECIATION SCHEDULE FOR?
3. WHAT IS A DEPRECIATION SCHEDULE FOR?

 

Its only real job is to save you paying extra tax.

Money Back


The way it works is like any other tax deduction you might be familiar with.

Say you are a Doctor and you need to pay membership fees to your institute, that is normally a tax-deductible payment.

Any tax deductions you claim comes off your taxable income.

To put this another way, if you earn $100,000 a year and you have $10,000 worth of deductions in that year, the tax office now sees you as only earning $90,000 a year and that’s what you’re paying tax on.

 

4. WHAT SORT OF DEDUCTIONS CAN I GET?
4. WHAT SORT OF DEDUCTIONS CAN I GET?

 

Unfortunately, that question isn’t as easy to answer as it once was.

With the depreciation rules being changed in May 2017, it depends a lot on when you purchased, whether you ever occupied the property, whether it’s new or old and several other issues.

In general there are two types of allowances available:

  • Depreciation on Plant and Equipment, which refers to items within the building
  • Depreciation on Building, which refers to construction costs of the building itself.

Both these costs can be offset against your assessable income.

 

5. WHAT ARE THE NEW DEPRECIATION RULES?
5. WHAT ARE THE NEW DEPRECIATION RULES?

 

This could get messy, but I’ll try keep it short.

Depresiation34


Essentially if you purchase after the 9
th of May 2017 you can only claim plant and equipment items if you bought the property brand new, or installed those assets yourself, such as adding new carpet.

Plant and equipment items are generally the internal assets like blinds, kitchen appliances, air conditioning etc.

What hasn’t changed is the division 43 deductions, which consists of the structure of the building including timber, concrete, tiling, kitchen cupboards an the like.

You can still claim those deductions as per the old rules.

 

6. WHAT ABOUT QUALIFICATION DATES?
6. WHAT ABOUT QUALIFICATION DATES?

 

The property needs to have been constructed after the 16th of September 1987 to qualify for depreciation claims on the original building structure.

Tax Time Papers


If it’s built prior to that date, then only the renovations or improvements will attract deductions.

This might be things like extensions, kitchen and bathroom renovations, painting and the like.

There’s no simple rule that guarantees a report won’t be worthwhile based on the date of construction because of these renovations creating deductions.

However, if the property was built after the 16th of September 1987, the report is going to be worthwhile under normal circumstances.

 

7. Should I get a Depreciation Schedule and how much does it cost?
7. SHOULD I GET A DEPRECIATION SCHEDULE AND HOW MUCH DOES IT COST?

 

Depreciation schedule costs are around the $600-$800 mark and I wouldn’t consider going any cheaper, though cheaper options are available.

Call Information House


Any less than that range will necessarily involve corner cutting on the inspection or the time taken to fully maximise and tailor a schedule to the client.

As for whether you should get one, quantity surveyors should be analysing that for you.

Simply give one a call or share an online link to photos and some basic information like the age, history, purchase date and they will tell you whether the report is worthwhile.

Worthwhile normally means they’ll find at least double their fee worth of deductions within the first full year of claim.

Personally, if there’s no value to the client, we’ll never recommend having a schedule done.

I hope that helps to give an executive summary on what depreciation is and how it works.

Property managment 570x292

Speaking with Smart Property Investment, Ben Handler, CEO of the Buyer’s Agent Institute, said there were two aspects of buying a property investment that can stump unwary property investors.

The first was being sure to undertake due diligence, something that Mr Handler has identified a lot of people ignore from working as a buyer’s agent for eight years.

When buying for his own personal portfolio, Mr Handler added he always is careful to do his due diligence.

“There’s been times where unfortunately I’ve ordered a strata report and the health of the sinking fund and some critical elements around how the building is maintained or issues that have been in the building before and how they’ve been rectified has concerned me,” Mr Handler said.

“It just showed me it could be a risk buying into this building, so that has steered me away in apartments.”

The second aspect that he sees stumping property investors was forgetting real estate agents are not trying to help you buy a property, but are trying to sell a vendor’s property.

“When you’re communicating and corresponding with them, … you have to be mindful that they’re always representing their vendor,” Mr Handler said.

“So, what you’re hearing from them, how many contracts are out, has there been another offer and [how] you need to increase your offer; you’ve got to be very mindful and skeptical and just conscious around what they’re telling you.

“How you’re dealing with a real estate agent is really important, and I think just knowing when to … walk away from a property; … setting that boundary of that threshold of what you’re prepared to go to.”

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