Hotspotting

Depreciation Impact


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The report we call The Pulse provides critical intelligence for property investors because it shows how you can get both a high rental yield and excellent capital growth if you choose your location well.

Recent editions of The Pulse have featured locations where rents have grown 10-15-20% in a year, but so have property values – providing the ultimate win-win-win situation for property investors.

Hotspotting produces this report in association with leading national experts on property depreciation, Washington Brown – who provide additional key elements to the data in this report.

The figures from Washington Brown show that intelligent application of depreciation tax benefits can create a significant increase in the rental yield of your property.

It depends on a number of factors, including the tax bracket you are in, but typical depreciation benefits for an investment property can lift a 6.3% gross rental yield to 6.75%.

A 6.4% yield can improve to 6.8% or 6.9%.

Tyron Hyde, the CEO of Washington Brown says that “Depreciation is the secret sauce when it comes to property investing - and can turn a good, positively geared property into an even greater property! 

“Better yet, depreciation can turn a negatively geared property into a positively geared scenario.”

Tyron Hyde reminds us that property investors are able to claim the wear and tear of a property against their taxable income, which should be factored into the yield of a property.

Depreciation is a non-cash deduction, which means, unlike all other expenses on your property, you don’t have to pay for it. 

The depreciation amount you can claim is built into your property when you buy it; you just need a Quantity Surveyor like Washington Brown to calculate the number.

So, if you get a copy of The Pulse, you can learn a number of key things for property investors: 50 locations which are affordable, where you get above average rental yields, and which have good potential for capital growth – and the important data from Washington Brown which shows how depreciation benefits can turn a good rental yield into a great rental yield.

 

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HotspottingBy Terry Ryder & Tim Graham


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