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16 August, 2016

Why Aire West Perth is perfect for investors

Investors are always looking for the next good deal and property has long been a favourite option. But what are the reasons “bricks and mortar” investments are so popular?

Let’s take a look at two major benefits of property investment in Australia.

Tax Depreciation

When you own an investment property in Australia you are able to claim the “wear and tear” on that property against your taxable income. That means if you need to replace the oven or the air conditioner, for example, you can claim the costs against your assessable income.

You can also claim depreciation on the property structure itself. It doesn’t actually matter if the property was physically built by someone else, you can still claim the “wear and tear” on the building for up to 40 years after it was built.

These “allowances”, as they are called, from the Australian Tax Office are larger on taller buildings (like high-rise apartments) because the high-rises have additional shared services like intercoms and security systems.

Aire - Ground Floor

Negative Gearing

Negative gearing is another kind of tax benefit. If your borrowing costs on a property are higher than the money you’ve made from it, those losses can be claimed against your total tax return. This can easily add up to thousands of extra dollars back in your own pocket every year.

You need an Australian taxable income to be able to negatively gear your loss against. The higher your income, the greater the benefit of negative gearing as it will decrease your taxable income.

Let’s have a look at just how big a difference these tax benefits can make to your monthly income.

Benefit Analysis

Here’s a depreciation benefit analysis on the first year of ownership on a one-bedroom* apartment at Aire West Perth, prepared by quantity surveyors Washington Brown. In this example it assumes your rental income is $400 a week.

And here’s the benefit analysis on the first year of ownership of a two-bedroom** apartment at Aire West Perth, if your rental income were $550 a week. 

Why Aire West Perth?

When it comes to investing in property there is obviously much more to consider than just tax breaks. Finding the right property is key. That involves carefully considering the property’s location, quality, size, amenities, price, rental potential and myriad other factors.

So why consider Aire West Perth?

West Perth is a very desirable area, close to the city centre, but with its own character and vibrancy. It’s becoming increasingly popular with the upwardly mobile urban professionals attracted to the area’s cafés, restaurants, good public transport links and central location.

It also makes economic sense. Apartments in West Perth are far more affordable than a house. In the 12 months prior to August 2015, the median house price in West Perth was $515,000 — exceeding the median unit price by $213,000. Apartments also produce a higher gross rental yield than houses of 1.1 per cent (in September 2015).

Whether you’re taking your first opportunity on the property investment ladder or looking for the perfect next property to add to your portfolio, there are plenty of good reasons to take a close look at Aire West Perth. For more information, contact an exclusive selling agent today.

 

 

Note:

This analysis is provided to illustrate the benefits of claiming tax depreciation benefits on an investment property only, and should not be seen as financial advice.

Assumes:

  • 90% Loan Value Ratio (LVR).
  • 5% interest rate on mortgage.
  • Rental income estimated by Realestate 88 at $400 per week.
  • Finbar Group Limited provided estimates of rental income and outgoings.
  • Entry and exit costs are excluded (e.g.,Stamp duty and Legal fees).
  • Washington Brown provided Tax Depreciation Estimates.

**Assumes:

  • 90% LVR.
  • 5% interest rate on mortgage.
  • Rental income estimated by Realestate 88 at $550 per week.
  • Finbar Group Limited provided estimates of rental income and outgoings.
  • Entry and exit costs are excluded (e.g.,Stamp duty and Legal fees).
  • Washington Brown provided Tax Depreciation Estimates.