How To Use A Property Depreciation Calculator

  • Posted 19 Dec

How To Use A Property Depreciation Calculator

If you’re a home or property investor, there’s something you need to think seriously about: Depreciation.  Most investors make the mistake of thinking about this factor AFTER they’ve made the purchase on their property.

If you want to make the best investment, you want to think about this information before you make your purchase, as it can allow you to make a better decision as to which particular property to purchase.

To make this assessment, you’ll need to know how to use a depreciation calculator.

Property depreciation is a tax deduction that can reduce your taxes as an investor significantly. By using a property depreciation calculator, you can come up with informed estimates regarding the potential tax depreciation benefits that might be available to you on a particular investment property.

If you use a calculator with regard to a range of potential properties you are thinking about investing in, you’ll get a fairly accurate estimate that can help you in making your final investment decision.

1. A Property Depreciation Calculator CAN Save You Money

A Property Depreciation Calculator (PDC) can provide invaluable information as to the likely deductions you might face at the end of the tax year. It’s an invaluable tool in this way. By thinking about your potential tax savings before you make the actual purchase, you’ll have a much broader sense of the value your potential property investment has.

If you use a calculator with regard to a range of potential properties you are thinking about investing in, you’ll get a fairly accurate estimate that can help you make informed decisions, based solely on returns rather than other factors.

2. Using a PDC

There are numerous PDC applications available online, or as applications you can download to your smartphone. You don’t need to buy one – there are enough free options out there.

Once you have found one that suits your needs, enter the variable of the property to get the estimated property depreciation.  Here are some of these variables:

  • Purchase Price of the Property
  • Nearest capital city to the property
  • Standard of the finishes on the property
  • Type-residential, commercial, industrial

When you’ve finished entering the necessary information, press, “calculate”. The PDC will search for similar types of properties in the area, and show depreciation schedules based on the information you’ve entered.

3. You CAN claim Depreciation on an Older Property

Many investors are unaware of this fact. It is true that if a property was built before July 1985 you can only claim certain depreciations, but you can, in many cases, still save a lot of money through other ways. The PDC will show the benefits tax-wise on older properties as well.

All properties are different, so no result from a PDC will be totally accurate, but using the PDC will give you the most reasonable estimate you can get.

If you use a PDC correctly, you’ll be using the same information and tools as professional property investor’s. Using this important tool from the start will allow you to discover how much you can save on your investment.

Still not sure what to do or how you can save money on your property investments? Call our team today to find out how we can help you navigate the investment property market.

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