Have you been investing in real estate? Then you would be paying attention to major issues like rental income, capital gains, and perhaps looking at another real estate purchase. 

What is it that usually slips off your mind? Yes, tax depreciation. 

Isn’t it amusing that tax depreciation is one of the most easily implemented methods to enhance cash flow in your property portfolio? 

Then What Really Is a Tax Depreciation Schedule? 

Quite simply, it is a comprehensive assessment that tells you how much value your property has lost and how much of this loss can be claimed for tax purposes. 

Wear and tear occur on all property over time, through the aging of floors, the obsolescence of fixtures, and just the natural decline of building assets over the years. But, if these losses in value are to be claimed, the calculations must first be performed. 

This is why a tax depreciation schedule is so important. 

Not Limited to the Property Itself 

Many believe that depreciation is limited only to the actual physical property being used. However, there is far more to consider when doing an assessment. 

An efficiently prepared schedule will identify your assets by the following criteria: 

Capital Works (Building) – such as walls, roofs, and structural work. 

Plant & Equipment – including air conditioning, refrigerators, carpeting, blinds, and others. 

Since each one has its own useful life span and its own depreciation, this process will be very important for you, since leaving some components off may mean losing out financially. 

Reasons Why It Is Worth Doing Right the First Time Around 

This is not one that most investors will want to do themselves. 

A schedule that is produced by professional people—such as those provided by Leading BPI—will ensure that all bases are covered. It will cover the process of inspecting the building, recognizing all the qualified assets, and then applying the appropriate rates according to ATO rules. 

Once it has been completed, it can be kept by your accountant forever—possibly for many years into the future. 

As a result, there is no need to guess or to claim anything less than the maximum possible tax deduction. 

The Hidden Opportunity Most Investors Overlook 

Property owners either fail to receive a depreciation report altogether, or else their information is simply an estimate. 

And that almost always means just one thing—they are missing out on extra cash! 

Small amounts can make a big impact when added over a number of years. Sometimes, the sum of those savings could equal thousands in extra tax credits for many investors. 

An Important Strategy That Will Always Yield Rewards 

The great thing about a tax depreciation schedule is the fact that it’s a continual return on your investment. 

It doesn’t have to be redone each year. Instead, once you have one set up, you can start using it right away. In real estate, it’s all about making gains little by little. 

Conclusion 

In case you are a landlord who owns an investment property and has not yet explored depreciation, there are good chances that you need to review your approach to make things better. 

It doesn’t require you to indulge in any fancy techniques or take a huge risk. 

It’s simply about getting your rights.