BMT Tax Depreciation’s app, BMT Resi Rates, helps property managers and landlords find out the effective life and depreciation rate of any plant and equipment asset within a residential property.
Plant and equipment assets are easily removable or mechanical fixtures and fittings. Each plant and equipment asset has its own rate of depreciation and effective life. These include items such as carpet, hot water systems, air-conditioners, blinds and even less obvious items such as garbage bins, exhaust fans and door closers.
The BMT Resi Rates app assists property managers to search and find the effective life and depreciation rate for any of the depreciable fixtures and fittings a residential investment property is likely to contain. This helps resolve disputes over damaged assets and maintenance or replacement scheduling.
Let’s look at an example of how Resi Rates helped a property manager resolve a dispute between a landlord and their tenant.
A property manager conducted an exit inspection on their client’s rental property. Unfortunately, they found that the carpet had been substantially damaged and required full replacement.
A dispute arose between the tenant and landlord over whether the cost of the damage should be covered by the tenant and if so, how much should they be required to pay.
The property manager did a search on Resi Rates to find out the effective life of the carpet. From this search, they found that the carpet in a residential property has an effective life of eight years, that depreciates at a rate of 12.5 per cent using the prime cost method.
The owner had paid $4,000 for the new carpet six years ago.
From this information, the property manager was able to calculate that based on the eight year effective life of carpet, there was still 25 per cent of the value left at the time the carpet needed replacing, which was $1,000.
The information gathered from Resi Rates allowed the property manager to form a strong case, deeming the tenants responsible for paying the remaining $1,000 as damages.
Download the free BMT Resi Rates app for either iPhone, iPad or Android devices. Property managers can also visit Rate Finder online to search for the depreciation rate and effective life of any plant and equipment asset from their desktop computer.
For more information on depreciation and other services offered by BMT, contact the team on 1300 728 726 or Request a Quote.