Improving cash flow from an investment property

Pick your favourite property expert and check out their advice regarding the benefits of claiming depreciation on their investment properties.  Whether your a Margaret Lomas or Michael Yardney fan from way back, or you prefer Cam McLellan, or Jane Slack-Smith, whether you're a cash-flow positive only investor, or a negatively geared investor waiting for capital growth, experts are clear on the benefits of claiming for depreciation on investment properties old and new.  Claiming for depreciation improves cash flow and brings with it the opportunity to pay down debt or reinvest and grow your portfolio.  This is a key part of the strategy employed by experts around the country who continue to build their portfolio and their wealth year after year.

Depreciation is simply a tax deduction, allowable to investors to account for the ageing and wearing out of their investment property and it's assets over time. Learn more.

Understanding the impact of depreciation on cash flow is particularly useful when assessing the feasibility, or affordability, of an investment property. Investors need to know how it is going to affect their back pocket every week.

In the following example, where no depreciation is claimed, the cash-flow position of the property is negative $159.75 per month, or $1,917.00 per annum. This means the investor has to find $159.75 per month to make up the shortfall between the income generated by the investment property and the expenses incurred. By claiming depreciation, the post-tax cash flow of the property becomes positive $92.13 per month, or $1,105.56 per annum. Remember, this is post-tax, meaning the investor is better off $251.88 net, every month.

Effect of claiming depreciation on the cash-flow position of an investment property:

Tax Depreciation Table

If you own an investment property, the best way to ensure your depreciation deductions have been maximised is to use a depreciation schedule prepared by Capital Claims Tax Depreciation.  For an estimate of deductions you may be entitled to, or to have your current depreciation schedule reviewed free of charge, please don't hesitate to get in touch. 
If you own an investment property, the best way to ensure your depreciation deductions have been maximised is to use a depreciation schedule prepared by Capital Claims Tax Depreciation. For an estimate of deductions you may be entitled to, or to have your current depreciation schedule reviewed free of charge, please don't hesitate to get in touch.