Potential Returns in Property Investment

If you’re investing in property, you could be entitled to save on tax by claiming depreciation. In fact, some canny investors take depreciation into account before even putting in an offer on a property. Property has two types of potential returns. One is from rent paid by tenants and the other is from the property increasing in value called capital gain. Real estate or property investments are not considered to be ‘liquid’ because we can’t withdraw our investment quickly. To get money out we need to sell the property or increase the mortgage. This may not be easy and there can be extra costs such as valuation and real estate agent fees. People are investing in property Brisbane to make a long-term profit as prices rise. In the short term there may be little or no profit from rent after expenses like mortgage, insurance, rates and maintenance are taken into account. It is usually harder to borrow money for a rental property than for our own home. Some lenders may have lower lending limits for investment properties. As with ordinary home loans, lenders will look at what we can afford to repay when we're borrowing for investment property. Some lenders and mortgage brokers have particular expertise in lending for investment. An income property is a property bought or developed to earn income. Keep in mind that while there are many advantages of investing in real estate, there are also significant risk factors to consider. Then you decide to invest in an income property, you become your own boss. You choose what property to invest in, what tenant you will rent to, how much you will charge in rent and how you will manage and maintain the property as a whole. Assuming that you are investing in an income property to occupy it with tenants, you will be able to receive rental income. As a rental property owner, you are entitled to huge tax deductions. You can write-off interest on your mortgage or on any credit cards used to make purchases for the property. You can write-off your insurance, maintenance repairs, travel expenses, any legal and professional fees, and even your property taxes. On top of all of these deductions, the government also allows you to depreciate the purchase price of your property based on a set depreciation schedule, even if your property is actually appreciating in value.

Most investing in property Brisbane owners are entitled to claim some form of depreciation. That said, since new rules were brought in on 1 July 2017 investors who buy an established property can’t claim the depreciation on any assets included in their purchase until they sell. They can, however, still claim depreciation for capital works, as well as for any assets they replace in the property. If you buy a new property, buy through a company structure, or buy a commercial property, these changes won’t apply to you.  If the investment property you’ve bought, or are planning to buy, already has a few years on it, all is not lost. A qualified quantity surveyor will be able to tell you straight up what claims you can make for depreciation.