Choosing which horse to back on Melbourne Cup day is like being a property investor.
To assist punters, we’ve put together our tips to help you be a winner in property and also on the track this afternoon.
Make sure you have a budget in mind
When planning on purchasing an investment property, the very first thing most investors do is sit down with their Accountant or a Financial Planner to work out what they want to spend. An investor is also likely to organise a meeting with a Mortgage Broker or their bank to discuss their borrowing capacity and get a pre-loan approval.
Before deciding which horse to place your money on for the Melbourne Cup, set a budget limit for the day, so as not to buy out all of the office sweeps or over extend by having so many trifecta options that the bets you make will outweigh your winnings.
As property investors, we at BMT like to plan and spend our money wisely.
Improve your odds
When applying for a loan on any property, a specialist Quantity Surveyor can help by providing a tax depreciation estimate. This estimate will help an investor to work out their after tax position once a property has been purchased and is income producing. Lenders will often take into consideration all future income earned from a property when approving a loan.
Like applying for a loan for a property, a punter on the Melbourne Cup should do their research when deciding where to place their bets. While the form guide or the odds at the TAB might not provide as accurate a prediction of the future cash flow you will receive from your winnings as our handy tax depreciation calculator can for your investment property, it definitely helps to do your research before making a decision.
Location, location, location
Some might say this is the most important factor to consider when purchasing a property.
An investor will usually consider a property’s location in proximity to schools local transport and shops, while a Melbourne Cup punter might decide on a horse based on whether it is born locally or internationally.
For those who look to purchase locally, the Australian horse in the cup this year is Sertorius. If you’re looking a little further from home, there are plenty of international horses. Perhaps a Trip to Paris is on the cards or The United States will bring it home.
If you are really all about location as we at BMT think you could be, why not choose Bondi Beach, the popular suburb has a horse named after it in the cup this year.
It’s all in the numbers
Few property investors will choose a property based on its street number, but you’ll definitely find the odd punter out there who is particularly superstitious when it comes to choosing a horse by its number.
As Quantity Surveyors, we have an affinity for numbers, particularly as we spend much of our day looking at figures while calculating deductions for your investment properties.
It’s worth noting that Chinese investors like to buy properties on the eight day of the month, as this number has particular significance in their culture. If you choose to follow this path, perhaps number eight, Max Dynamite will win the Melbourne Cup this year?
Does it appeal to the eye?
Once you’ve purchased a property and plan to list it for rent, it’s important to ensure it is appealing to potential tenants.
A simple lick of paint to the walls can make the world of difference when it comes to attracting the right tenant to your property, but choosing a paint colour for a house is very different to choosing the silk colour of a Melbourne Cup winner.
Usually white is the most attractive colour to paint walls when trying to attract a tenant, so you could go with Hokko Brave. His rider, Craig Williams, is wearing the most white on his silks this year.
At BMT we might recommend choosing from our logo colour blue. According to statistics from the ABC news, horses with riders wearing blue silks have dominated the cup. Forty horses wearing this colour have won, followed by black with thirty three and yellow and gold with thirty. Some of the horses with riders wearing predominantly blue this year are Hartnell, Sky Hunter, The Offer, Almoonquith and Kingfisher.
Get a depreciation schedule
Every investor should be aware of how important it is to get a tax depreciation schedule for a property, but will this help for picking a horse winner for the Melbourne Cup?
Believe it or not, race horses are listed as a depreciable asset by the Australian Taxation Office.
So what happens when you try to discover the Melbourne Cup winner by estimating the remaining depreciable value? We’ve done our research and found the purchase price of some of the horses racing in the Melbourne Cup this year. Below are our calculations based on these values, from which we’ve picked a favourite to win.
While our calculations suggest a different horse will win the race than that predicted by the bookmaker’s odds, our analysis suggests that Preferment will be the winner this afternoon.
Pick a winning team
Some punters like to choose their horses by the jockey. Damian Oliver has been a race winner and favourite jockey for many Australian’s to put their money on. This year, he’s riding The Offer if you think the teamwork between jockey and horse is what to go on.
When it comes to winning in property investment on the other hand, you can’t go past having an expert team surrounding you for advice. It’s recommended to seek the advice of a Real Estate Agent when purchasing the best property for your portfolio, a Property Manager to find the right tenant and an Accountant and a specialist Quantity Surveyor to help you maximise the return you will see from you investment.