Cash Flow Positive Investment Properties

Benefits

Grow your investment portfolio faster. A cash flow positive property can reduce your

debt faster reducing interest paid.Negatively geared properties require the weekly

loss to be paid by the investor.

How to identify a Cash Flow Positive investment property?

If the property was constructed after 18th July 1985 the owner may claim depreciation for the building. In addition, depreciation may be claimed for the fixtures and fittings.

The ATO allow you to claim 2.5 per cent of the original property value each year for 40 years.

Depreciation Example

A residential investment purchased for $300,000 in 2005 is likely to have an annual depreciation allowance of $5000 for the first 10 years. MyProp.com.au has a free Depreciation Calculator for your property. You can also add the depreciation values for the fixtures and fittings which have varying rates of depreciation.

The Result

By adding the tax refund on deprecation to the property income it may become cash flow positive to make it work for you. Remember, you will need a comprehensive depreciation schedule to maximise tax savings on your investment property.