Property managers who want to phone landlords with good news for a change have been advised to do a crash course on depreciation.
BMT Tax Depreciation chief executive Bradley Beer told the National Property Management Conference that a little knowledge of depreciation can make a big impression on landlords.
“Most of the time, the phone call I get from my property manager is about getting some money for repairs and service,” Mr Beer said. “What about a phone call that actually talks about a cash return?
“We're not here to just collect money all the time; we're here to add some value because we are managing what is probably one of the biggest investments a property investor will ever make.”
Mr Beer said one way to get a client’s attention during a phone call is to tell them: “I’m not the expert, but there might be some money there.”
Another line he suggested was: “You’re leaving your money on the ATO’s table.”
About 70 to 80 per cent of property investors aren’t claiming depreciation correctly, according to Mr Beer.
While investors want properties to appreciate in value, some assets depreciate – which means they can claim deductions similar to car depreciation.
“The amount you get to claim for depreciation on the building relates to the actual construction cost and the value of things in that building,” Mr Beer said.
He said even old properties can experience depreciation, thus offering potential savings to their owners.
Some landlords will assume their accountants must already be on top of depreciation, but that isn’t always the case, according to Mr Beer.
The way to overcome that objection, he suggested, is to say: “The quantity surveyor will work alongside your accountant as a specialist in depreciation only to see if you’re getting much as you can.”
[Related: How landlords can avoid an ATO crackdown]