Rich Depreciation Rewards for Richmond Investors
Once the heart of the Victoria’s industrial roots, Richmond has evolved into a coveted community enriched with culture, food, and sports. Dotted throughout the district are humble workers cottages, converted warehouses, and new apartment complexes and multimillion dollar properties. This hugely popular inner city suburb boasts a population of approximately 34,944 people. Richmond is ideal for property investors keen to take advantage of the area’s growing popularity with independent young adults.
A review of Richmond’s demographic profile shows 33.8 percent are classed as independent youths, and a further 23 percent comprise maturing and established independent people. The remainder of the suburb’s population is made up of couples, families, and the elderly.
The average two bedroom house costs $1,467,000 to buy and $670 per week to rent. A two bedroom apartment will cost on average from $625,000 and is leased at $420 per week. Demand for properties is extremely high with approximately 555 visits per property recorded.
Residential Investors can expect to receive an annual rental yield of 2.4% for houses and a rental yield of 3.5% for apartments/ units. Based on five years of sales, Richmond has seen a compound growth rate of 3.6% for houses and 2.2% for units. (Source Real Estate.com.au).
Our savvy clients sought to capitalise on the growth of Richmond when they purchased a two bedroom apartment as an investment in Church Street. The property is ideally located closed to shopping, entertainment, schools, and transport.
As our clients purchased the property as new, they are entitled to Depreciation allowances on the Building, and Plant & Equipment Assets (Divisions 43 & 40).
Our NBtax team inspected the apartment and found a total of $15,749 in eligible depreciation deductions for the first full financial year.
Our detailed depreciation scheduled showed the calculated values for typical depreciation deductions including:
- Air conditioners
- Kitchen appliances, dishwasher, oven, stove, range hood
- Fire control and alarm systems
- Security systems
- Vehicle control, equipment
Our NBtax team also included depreciation deductions of $362,333 for our clients over the next 40 years. They can claim these deductions to offset rental income and manage cash flow.
Savvy investors like our clients are considering the value of depreciation allowances when calculating their return on investment.
If you own an investment property, contact us to organise a comprehensive and accurate deprecation schedule.