As Melbourne Cup fever sweeps across the country, what better time to take a closer look at the suburb of Flemington VIC and its property investment opportunities.
Home to the race that stops the nation, Flemington is a trendy inner city suburb of Melbourne located just a few kilometres outside of the city centre. It has a vibrant night life and a distinct multicultural flavour, with local restaurant Laksa King topping lists as a Melbourne favourite.
The property landscape in Flemington was traditionally made up of older houses, terraces and small unit blocks. However, there has been a surge of new unit developments recently such as ONLY Flemington, an ultra-modern apartment complex with 400 one and two-bedroom apartments. BMT Tax Depreciation prepared tax depreciation schedules for close to 100 investors who purchased an investment property in the ONLY complex. Based on our estimate, the average three-bedroom apartment attracted a depreciation deduction of $17,155 in the first year alone. Owners of two-bedroom apartments were able to claim an average of $14,647 in the first full financial year.
Over the past two years, both residential and commercial investors in Flemington have engaged BMT to obtain tax depreciation schedules for their investment properties. Of these, 84.5 per cent of properties were units, 8.5 per cent were houses, 4.7 per cent were townhouses and 2.3 per cent were offices and retail premises.
Investing in Flemington
Flemington has a population just topping 7,500, with most residents being young professionals. Due to its proximity to Melbourne’s CBD, Flemington VIC is a desirable location for workers wanting to avoid a long commute to the city centre. The mix of location, demographics and culture make Flemington an attractive investment location.
Let’s take a look at the depreciation deductions investors are entitled to based on the average purchase price of a unit and three-bedroom house in Flemington.
Based on the figures in the above table, we can see that the owner of a brand new two-bedroom unit with a purchase price of $490,000 can claim $12,764 in depreciation in the first full financial year alone. This adds up to an impressive $55,501 in the first five years of ownership.
To compare, let’s look at the depreciation deductions available in a typical second hand, three-bedroom renovated house in Flemington, purchased in January 2018 with a purchase price of $1,105,000. In the first financial year, the owner can claim $6,850 in depreciation. Over the first five years, this figure increases to $34,250.
Considering investors can claim depreciation deductions over the life of the property (40 years), you can see how it can dramatically improve an investor’s cash flow and why it shouldn’t be overlooked.
If you have a property and aren’t already claiming depreciation, request a quote for a tax depreciation schedule today. Alternatively, if you have a depreciation schedule but want to check if you’re maximising your claim, contact the expert team at BMT Tax Depreciation on 1300 728 726.
View our previous Melbourne Cup Day related posts.