We are about to commence the process of commissioning a buyers agent to seek us an investment property (house & land) in Brisbane.
Should we instruct the BA to only look for properties that have been built since July 1985 in order to claim structural depreciation?…….or do other investors think that it is not important?
I would be interested in everyones thoughts here.
What I think is not necessary is the BA, but it’s your money, and who am I to tell you how to spend it????
If you intend to buy other properties, my advice would be, wherever possible, do the homework yourself; you will learn something and save money.
Jo
I never really factor depreciation entitlements into purchase decisions. Of course, they’re at the back of mind. As a ‘non cash deduction’, depreciation is a bit of ‘cream’. I think ideally a purchase needs to stack up pretty well without depreciation. And bear in mind Tax Depreciation Schedules are all we do.
ScottPost 1985/1987 properties are important for me (and particularly post-1983 houses after what i’ve been hearing about asbestos). but re the depreciable properties- it is definitely a factor for me. If you can pick and choose qualities you’re looking for, and make a wish list, then it might be an idea to factor it in. it depends on budget really. If you’re looking for cheapy CF+ places, then it’s increasingly harder to get post-1987 places.
One of my first questions to a RE agent, is the year of the building, for depreciation purposes.
kay henry
In my opinion, the newer the place the less ‘value’ you will be likely to get. After all, buildings depreciate,(not meaning tax strategy – meaning, get older, need maintenance, get worn out, get outdated, go down in value) land appreciates (that is the thing that makes your property go up in value, not the dwelling itself.)
Two identical properties land-wise and pretty close rent wise, but one is 1988 and one is 1978.
Both need 8 k redecorating and updating. but the 1988 is selling for XYZk more because it’s newer and investors (like you perhaps) believe it’s a better deal cause they can depreciate.But if both properties have the same land area and location and if both properties could rent for the same amount if you painted, new carpet, spotlights, new kitchen cupboards etc, then I reckon the one that will be a better deal is evident after working out whether the money you save on price buying the cheaper one is more than the tax discount if you buy the more expensive one.
I bet the older property will turn out to be the best deal.So you have to work out if you are ‘going broke saving money’ or really saving.
cheers-
Minijoy to the world
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