Before you buy an investment home, it is always wise to become familiar with all aspects concerning not only the rental side of things, but how you can benefit by knowing about taxation benefits that are available during the term of the investment as well. Lack of knowledge has led to many people missing out on gaining the benefits of deductions they are entitled to claim. This could amount to a substantial sum. It has most likely taken years to achieve this asset and incurred a lot of financial planning to do so. This being the case, it would be silly to throw money away through ignorance of entitlements.
An investment home being income producing is classed as a business venture, and therefore entitles the owner to claim on depreciation of said property and fixtures therein. Claims can be made on fixtures that must be replaced because of storm damage, and also to necessary structural repairs resulting from storm damage. Insurance cover or lack of it has a bearing on the amount that can be written off in regards to residual value of the investment. The annual amount of depreciation depends on the age and price of the real estate Sydney investment, and whether you choose to have it long or short term.
In the early stages of the investment it can be beneficial to choose the Diminishing (short term) plan as the depreciation is a higher sum, and can help to get a foothold financially a lot faster in some cases. Many investors who plan to hold onto their real estate Campbelltown investment for longer will also choose this term because of the higher sum. If however there is no need to worry about the amount of depreciation being higher, the Prime (long term) plan would be the path to take. This method has lower benefits at the start of the investment, but is spread more evenly over the years. Choices usually are determined by the investors needs involving their financial situation.
The best course to take, and the wisest, is to discuss your investment with an accountant. He will be able to advise you as to the best way of handling it. Also make sure you insure the property before having it put on the market as a rental premises. Another excellent choice is having a property manager to handle the rental side of the investment for you. They are worth every cent you pay them for the time and worry they save you.
