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Purchasing a newer investment property has numerous advantages over old properties. There are many who would consider old properties to be wiser investments and may even cite some tax deductions that can be claimed on such properties. However, when you do the math, you would observe the returns on your investment including the tax deductibles and that shall show you how much you can benefit with a newer investment property.
The most noteworthy benefit of a newer investment property is that it would be in an area, in a condition and with features that people desire at the moment. Most people are moving away from the suburbs to stay at inner city neighbourhoods. People want the urban facilities and perks of living in a cityscape. Being distant from the city is not convenient or desirable anymore. You are likely to find a newer investment property at premium addresses. This immediately increases your chances of getting the best tenants who would also be willing to pay premium rents. After all, seeking tax advantages is a way to save more money. A newer investment property is a way to make more money.
A swanky new property is likely to cost more than an old property. There would be no need of repairs but you can always personalise it a bit. With a pricier mortgage or home loan, you would pay a higher interest. Thus, you can claim a higher deductible. The costs of personalisation of the newer investment property can also go into the deductibles.
The most noticeable savings you can make on taxes of a newer investment property is by virtue of its depreciation. An old property is perhaps already depreciated, completely. Or, there can be a slim room of claiming some depreciation after you have purchased it. With a newer investment property, the entire depreciation is for you to claim. You can work with a tax expert to strategize the tax deductible pertaining to this depreciation. It is possible to claim a massive depreciation from the second year to the fifth year or so. This saving is so huge that it can be the difference between profiting with a rental property and running into losses.
A newer investment property will be more eco friendly, more energy efficient, it would have lower vacancy rates and very low maintenance costs. Making money is the ultimate objective of considering an investment property and a new one will satiate the quest, partly by reducing your tax obligation.
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