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Thanks for listening to Mike on the Elephant in the Room Podcast

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As promised, we're sharing the key data from the episode, and we've left the data shared from the first interview down the bottom.
To download your copy of the MCG 1000 Assets Report you can click here

We're also pleased to be able to offer a free review on the potential depreciation deductions for a property that you own already, or are looking at purchasing. If you have a property you'd like to have a depreciation schedule prepared on, you're entitled to a $100 discount on the standard fee. Please contact us via our request a quote button and mention the code ELEPHANTINTHEROOM2020.

On the show Veronica asked the average post purchase renovation spend on houses vs units. Here's what we found:

New HousesEstablished HousesNew UnitsEstablished Units
Average Post Purchase

Renovation Value

$15,338.16$65,506.87$5,078.94$27,404.81

Some of the data mentioned on the show:

Percentage of investors buying a new dwelling: 49.6% (up from 23.9% in 2016/17)

Investorys occupying their property prior to rental: 25.7%

Investor puchase types 2019:
House 37.5% (down from 43.2% in 16/17)
Units 33.7% (down from 47.2% in 16/17)
Townhouses 13.6% (up from 6.3% in 16/17

Average Development sizes:
2016 – 61.53 units
2017 – 70.59 units
2018 – 96.91 units
2019 – 83.26 units (Opal Towers Dec 2018, June 2019 Mascot Towers)
2020 – 72.38 units

Buying New:
49.6% of people bought a brand new dwelling in the April 2019 to Dec 2019 period – So new dwellings are certainly popular with investors
71.5% bought OR built a new dwelling in the same period (28.5) established – A lot of investors build a new investment property, so the numbers are quite high for “brand new”

You can download the complete report here


 

The data we shared from our first 1000 sample on the previous episode is below:

From our analysis of 1,000 of our residential reports:

Type of residential investment
1              43.1% of investors buy/build a house
2              8.5% townhouse or duplex
3              47.3% a unit
4              38.2% of all investors buy brand new

Units
1              68 is the ave. number of units in the development for investors that purchase a unit
2              Ave purchase price is $539,570
3              43% are bought new (204/473) compared to 26.2% for new houses (drops to 7.3% if we exclude properties where the client engages the builder directly)

Depreciation Deductions
1              Ave first year deductions $9,415
2              over first 5 years it's $38,388
3              ave total deductions over 40 years $192,159

Let's get real
With Ave deductions of $9,415 here's what you'd get back in your pocket (source: ATO Calculator)
On an income of 200k you'll get $4,237 back in your pocket
150k is $3,484 in your pocket
100k is the same
50k is $3,060 in your pocket

Budget Changes (9/5/2017)
38.2 % of schedules are on brand new properties*
69.9% of the properties were built after div43 cut-off date 16/9/1987
Of all pre 87 properties, 63.8% have been renovated to an ave value of $39,191
83.9% of investors would still have been recommended a schedule from our modelling

Div 40 vs Div 43
Post budget we analysed 100 schedules, ave value of 1st year deductions was $11,628
the div 40 component was $6,870, div 43 is $4,758
investors lose 59% of first year deductions from the budget changes

Talk to one of our tax depreciation experts today
on 1300 795 170 to ensure you have a professional
maximising your tax depreciation deductions.