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The Block 2022 depreciation schedules

BMT team — Thu, 10 Nov 2022 00:58:15 +0000

The Block 2022 was like nothing audiences – or crew – have experienced before. From the charming location and impressive renovations to the jaw-dropping depreciation deductions and unexpected auction outcome, this season has been the most extraordinary yet. Generating a record-winning profit of $1,586,666.666, Omar and Oz have won The Block 2022 selling their property at auction for $5,666,666.666 to serial Block buyer Danny Wallis. Danny Wallis also purchased the following two properties sold on auction day including Tom and Sarah-Jane’s House 1 which sold for $4,100,000.99, generating a profit of only $20,000.99, and Rachel and Ryan’s House 2, which sold for $4,249,000.50 post-auction generating a profit of $169,000.50. The Block 2022 is located in picturesque Gisborne South within the Victorian Macedon Ranges. Only a forty-five-minute drive from Melbourne, Gisborne is known for its sprawling country homesteads, tree-lined streets, comfy cafés and restaurants with beautiful wineries and olive groves. The location hits this year’s theme of ‘tree change’ spot on. The teams were assigned with renovating their properties into homestead-style houses plus host Scott Cam renovated a house of his own. All houses contain five bedrooms, three bathrooms and spacious living and dining areas with luxurious butler’s pantries, walk-in wardrobes and mudrooms. For the first time, contestants were also tasked with planning the landscaping for more than 700 square meters. BMT Tax Depreciation was asked to estimate the depreciation deductions available on this season’s properties on The Block. Below we outline the deductions found and just how advantageous they could be for an investor buyer. Jaw-dropping numbers Because of the substantial renovations completed and brand-new assets installed the houses are brimming with depreciation deductions. The table below demonstrates the depreciation deductions BMT found on The Block 2022. Ankur and Sharon’s house (House 3) generated the highest deductions with a total of $5,840,166, more than $100,000 higher than house two in second place. The other houses don’t fall far behind with an average total of $5,292,597 in depreciation deductions and an average of $203,340 in the first full financial year. There was a total of $31,755,586 in depreciation deductions found across all six houses for the life of the properties. To break this down the total capital works deductions (Division 43) were calculated at $28,911,186 and the plant and equipment (Division 40) deductions totaled $2,844,400. The Block auction which was held on Saturday 5 November was no doubt discouraging for the other two teams, but this isn’t game over for properties that failed to sell on auction day. Nine will “continue to negotiate with interested buyers to sell these homes, which are still on the market”, Scott Cam revealed. These properties still have the potential to fetch well over the reserve. While the auction didn’t go according to expectations, The Block properties hold the greatest deductions than ever before making it an enticing purchase for investors. Bradley Beer, Chief Executive Officer of BMT, said that savvy investors will take these lucrative deductions into account when considering any Block purchases as these deductions have the potential to significantly improve an investor’s cash flow. The houses on The Block undergo extensive renovations including new flooring, new roofing, new shelving and cabinets, new kitchens and bathrooms and even new rooms constructed. These upgrades make for attractive deductions. The houses are essentially stripped down to their structural component and built back up. Substantial renovations boost an investor’s eligibility for depreciation deductions. With over thirty million dollars in depreciation deductions, the houses on The Block are a property investor’s goldmine. They’re filled with brand new assets, have strong tenant appeal, low to no maintenance (as they’re newly renovated) resulting in fewer annual expenses and offer significant depreciation benefits. The appliances on The Block alone generated strong deductions. For instance, Omar and Oz’s kitchen features $250,000 in top-end appliances. Even if the furniture and other assets are removed for future tenants, the fixtures and fittings alone such as light fittings, kitchen and laundry appliances, blinds and curtains and more hold profitable deductions. Claiming depreciation is an essential step to not only optimising cash flow but also building and maintaining a successful property portfolio. This applies to all types of property investors. With over twenty years’ experience BMT Tax Depreciation are the industry’s leading experts in property depreciation. To learn more about the depreciation available in substantially renovated properties or depreciation in general contact BMT on 1300 728 726 or Request a Quote.

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Discover just how much potential investors can claim from The Block 2021 backyards

BMT team — Wed, 27 Oct 2021 05:27:06 +0000

While Kirsty and Jesse took out The Block’s backyard week, the staggering depreciation figures show that the ultimate winners will be any investor that becomes the owner of every one of these yards. The numbers BMT Tax Depreciation has been preparing depreciation reports for The Block properties since 2016. Depreciation is the natural wear and tear of property and assets over time. Owners of income-producing property, including investors, can claim this depreciation as a tax deduction for up to forty years. These deductions can reach the hundreds of thousands, or even millions, of dollars, and The Block properties prove this. The maximum total depreciation deductions for the properties range between $3 and $3.6 million. This includes the indoor and outdoor areas, along with all the assets such as furnishings and appliances. Meanwhile, we have estimated that the total maximum deduction from The Block backyards range between $167,000 and $256,000 alone. Not only did Kirsty and Jesse take the week’s win, but their backyard also generates the most deductions. It’s estimated that this space will produce a total maximum depreciation deduction of around $259,000. The drama surrounding the battle of the pools also proved beneficial for any future investor-owner. Our depreciation estimates revealed that the pools alone generate total depreciation deductions between $30,000 and $53,000. In fact, all of the backyards produce robust depreciation deductions over their lifetimes. The table below breaks down the minimum and maximum total depreciation deductions. Claiming depreciation on landscaped areas These figures may come as a surprise to some as many investors automatically rule out claiming depreciation on the outdoor areas of rental properties. This is due to the fact that natural landscaping, like plants and real turf, are ineligible for depreciation deductions. Despite this, backyards can still produce massive tax deductions based on the assets and works completed. The Block 2021 proves this, with depreciation deductions available on not only the pools, but fences, furniture, BBQS, outdoor lighting and much, much more. This is just one reason why talking to a specialist about tax depreciation is an essential piece to claiming maximum depreciation deductions compliantly. An expert will know what to look for when assessing a property and determine what indoor and outdoor assets or works will be eligible for these lucrative deductions. When an investor orders a tax depreciation schedule from BMT, one of their specialist site inspectors will physically attend the property to conduct a site inspection. The information they gather will be used by the team as they prepare a comprehensive schedule that will last the depreciable lifetime of the property (up to forty years). Now that you understand just how much depreciation is out there to claim, contact BMT on 1300 728 726 or Request a Quote to learn more.

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BMT and The Block’s record-breaking history

BMT team — Mon, 14 Dec 2020 04:12:04 +0000

The latest season of The Block is hard to forget, with winners Jimmy and Tam taking out the title with $1.06 million dollars. Meanwhile, the buyer advocates were left behind when IT entrepreneur, Danny Wallis, dominated the auction and took home three of the five properties. The Block 2020 produced a combined auction-winning profit of over $3.2 million dollars, a result never seen before. As the dust settles, let’s take a depreciation-style trip down memory lane and reflect on the BMT and Block record-breaking history. We completed our first depreciation estimate during season seven of The Block. Since then, we haven’t missed a season. Over the years, auction results haven’t always gone the contestants’ way, however we have still found millions in depreciation deductions from all luxury properties. From rundown hotels to century old houses The Block 2018, 2019 and now 2020 has taken the contestants to renovating rundown hotels like the Oslo and Gatwick, to renovating old weatherboard houses, some of which were over 100 years old. These three seasons alone produced almost $50 million in total depreciation deductions across all fifteen properties! The 2020 winners, Jimmy and Tam also came out on top with the highest estimated depreciation deduction average of over $2.9 million, and potential maximum for the property of over $3.2 million. When completing the estimates for all properties on this season, we found over $14 million in potential depreciation deductions. The 2019 season also saw significant depreciation deductions, with couple Jesse and Mel’s property holding an estimated total of over $3.67 million in depreciation deductions. Meanwhile, the 2018 season depreciation winners were Kerrie and Spence, with their property holding an estimated total of over $4.1 million. If the lucky owners that came out on top at auction day choose to use the properties as investments, they’d be claiming these deductions for up to forty years. Depreciation highlights There are some items on The Block that stay in our minds more than others. These prove not only to be memorable but also hold significant depreciation deductions. Just one example is Sticks and Wombat’s shipping container pool from season13. This unique pool had a cumulative five-year depreciation deduction of over $4,000. The pool is classed as a capital works asset as it is structural in nature, which means it will produce lucrative deductions for up to forty years. Hayden and Sara’s gold bath from season 14 is another that is hard to forget, partially due to the drama surrounding it. The cumulative five-year depreciation deduction that this bathtub produced was estimated to be $1,000. How BMT find millions in depreciation deductions These types of depreciation estimates are found by completing our physical inspections. We leave no stone unturned to ensure no deduction is missed. We identify every depreciable item possible, from the easy-to-spot structural walls and floors, to the not so obvious smoke alarms, door fixtures and small furnishings. With over twenty years of experience, we can maximise depreciation deductions compliantly on any type of investment property or commercial premises. To learn more about depreciation, Request a Quote or contact our team on 1300 728 726.

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The Block 2020 unlocks millions in depreciation deductions

BMT team — Tue, 10 Nov 2020 22:43:33 +0000

The Block 2020 has taken the popular show through several firsts. The site experienced a pandemic-induced shutdown, heritage charm from eras such as the 1910s was mixed with modern renovations, and this season also featured the first father-daughter team. BMT Tax Depreciation work with The Block each year to estimate depreciation deductions for the luxurious properties. Like the ones that came before, this season of The Block produced millions in deductions. Contents: A short history of 360 New Street, Brighton Block 2020 depreciation highlights How BMT finds millions in depreciation deductions A short history of 360 New Street, Brighton 360 New Street is in the affluent bayside suburb of Brighton, Victoria. This location has gone through quite a journey before becoming the site for The Block 2020. It was previously a private aged care home that was sold to a property developer. Planning permits on public record show that 360 New Street was originally going to be an estate that held thirteen luxury two-story town houses. However, the property developer sold the site to the Nine Network for close to $15 million before construction took place. Before the contestants arrived, Nine subdivided the block of land and transported five old, run-down homes from different decades to the site. The teams were challenged with the task of renovating the houses to be luxurious, modern properties while keeping elements of the original eras. Block 2020 depreciation highlights BMT Tax Depreciation always finds millions in deductions from The Block properties, and this year was no different. By estimating depreciation on the capital works and plant and equipment assets, BMT show potential investor-buyers what they could claim if successful on auction day. BMT found more than a whopping $14 million dollars in estimated depreciation deductions from this year’s Block properties. The average total depreciation claim for each property is estimated to be almost $2.9 million. Serial challenge winners, Jimmy and Tam, renovated the 1950’s property at 360A New Street. Their property holds the biggest estimated depreciation deductions. BMT has estimated that the maximum total depreciation deductions available from this property would be over $3.2 million. While in the first year alone, it is estimated that an investor could claim a maximum deduction of more than $146,000. Fan favourites, George and Sarah, came in close second with their property fetching an estimated maximum total depreciation deduction of $3.19 million. The major selling point for investors is that they can take advantage of the millions of dollars in depreciation deductions for forty years. How BMT finds millions in depreciation deductions BMT truly leaves no stone unturned. With over twenty years of experience, BMT knows what to look for when completing every type of tax depreciation schedule. During a site inspection, BMT’s specialist staff identify every depreciable asset possible to ensure the owner claims every dollar they are entitled to. When estimating depreciation for The Block properties, BMT looked at everything from the structure, to all assets from the high-end kitchen appliances to furniture and light fixtures. As a specialist quantity surveyor, BMT can estimate the construction costs of the property for depreciation purposes to ensure depreciation claims are maximised and compliant. To learn more about depreciation or get a free estimate of likely deductions from your investment property, Request a Quote or contact BMT on 1300 728 726.

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Tess and Luke’s self-contained studio lured bidders

BMT team — Tue, 12 Nov 2019 00:06:15 +0000

Series underdogs Tess and Luke shocked the nation when they pocketed an eye-watering $730,000 for their renovation efforts on The Block. The Cairns couple sold their luxury St Kilda terrace at auction for $3.62 million, a staggering $630,000 over the reserve price. The terrace was championed for its exceptional design and first-class craftsmanship, both of which created a home with an exclusive edge. With three living and dining areas, four bedrooms, state-of-the-art kitchen, and four bathrooms, the property was bound to attract buyers from far and wide. But there was one clever feature that set the winning property apart from its neighbouring terraces. Tess and Luke’s winning feature The winning property featured its own self-contained studio, a design clearly favoured by bidders at auction. It should come as no surprise as savvy buyers often look for property with investment potential. A self-contained studio offers just that, especially when considering the lucrative depreciation benefits. The Australian Taxation Office (ATO) allows owners of income producing properties to claim deductions for the wear and tear that occurs as a building gets older and items within it wear out. These deductions can be claimed under two categories – capital works deductions and plant and equipment depreciation. Capital works deductions refer to the building’s structure and items considered to be permanently fixed to the property such as kitchen cupboards, doors and sinks. Plant and equipment assets are items which are easily removable from the property such as carpet, hot water systems and blinds. These assets have a limited effective life as set out by the ATO and can generally be depreciated over time. A BMT Tax Depreciation assessment showed that Tess and Luke’s entire terrace has $3.61 million in depreciation deductions claimable over the lifetime of the property should the buyer decide to use it as an investment. If the buyer lives in the property as their primary place of residence, they can still utilise the self-contained studio as an income generator. Investment opportunities for a self-contained studio An investor can lease or holiday let a self-contained studio. Both options offer an attractive income stream for the owner, particularly in metropolitan areas where affordable property is in demand. Whether it be a listing on Airbnb or an advertised rental property, when a self-contained studio is income-producing the owner is also entitled to substantial depreciation deductions, even if they are currently occupying the primary residence on the property. Eligible assets within the studio such as flooring can be depreciated based on their effective life which is set by the ATO and updated regularly through tax rulings. Capital works can also be claimed for the building’s structure and any permanently fixed items. Owners can claim these deductions for the period the studio is rented or genuinely available for rent. That is, the property is given broad exposure to potential tenants and considering all the circumstances tenants are reasonably likely to rent the property. The best way to ensure you claim maximum depreciation deductions is to arrange a tax depreciation schedule. A BMT Tax Depreciation Schedule covers all deductions available over the lifetime of a property and is 100 per cent tax deductible. During the FY 2018/19, we found residential property investors an average first year deduction of almost $9,000. For more information, simply Request A Quote or speak with one of the expert team at BMT Tax Depreciation on 1300 728 726.

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Why savvy investors love these 5 properties from The Block

BMT team — Thu, 07 Nov 2019 00:32:58 +0000

Each year The Block contestants battle against time to complete lavish renovations before auction day. While time management, styling and functionality all play a part in determining who wins the TV series, there’s another hidden feature that attracts savvy investors to the high-end properties. It’s called depreciation. The Australian Taxation Office allows owners of income producing properties to claim depreciation deductions for the wear and tear that occurs as a building gets older and items within it wear out. Each property is unique and holds different depreciable value, sometimes in the millions. BMT Tax Depreciation has worked with The Block to provide depreciation assessments for more than ten years. Now, we’re revealing the top properties with the highest depreciation deductions available from the past five seasons. 1. Jesse and Mel – 2019 Jesse and Mel’s property on this year’s season of The Block holds nearly $3.68 million in tax deductions for the future buyer should they decide to rent the property out. In the first year of ownership, an investor could claim more than $138,000 worth of depreciation deductions. This attribute could increase the price that property investors are willing to pay for the property and give the pair an edge during the final auction. While Jesse and Mel’s property holds the most total deductions, Mitch and Mark ($3.65 million) and Andy and Deb ($3.63 million) are hot on their heels. 2. Kerrie and Spence – 2018 Barossa couple Kerrie and Spence were first up on auction day last year and started the night with a spectacular result. The couple’s 2018 apartment sold for $2.85 million, $415,000 over reserve. The property was also shown to hold over $3 million in tax deductions for future investors, with $135,132 in depreciation deductions in the first year alone. Outstandingly, Kerrie and Spence’s property had $100,000 more in deductions than their closest rival. 3. Hannah and Clint – 2017 You may be more familiar with fan favourites Elyse and Josh, who famously won the season when they sold their property to comedian Dave Hughes, but contestants Hannah and Clint stole the attention of investors. Hannah and Clint’s property had a first-year deduction estimated to be $82,304 and a total average deduction of $2,175,149. The Townsville couple took home $95,000 after their house sold for $2.61 million. 4. Kim and Chris – 2016 While Will and Karlie took out the 2016 season, pocketing a whopping $815,000, it was Kim and Chris who built the best investment property. Kim and Chris’s penthouse apartment had the highest amount of depreciation deductions available, with a first year deduction estimated to be at $87,470 and a total deduction estimated to be at $2,448,042. Overall, BMT analysis found that investors could claim an average of over $2.2 million in depreciation deductions for each apartment on the 2016 season. 5. Dean and Shay – 2015 Who could forget Dean and Shay’s incredible penthouse apartment? Taking out the top spot on The Blocktagon season, the Newcastle couple’s penthouse sold for $2.3 million, $655,000 above its reserve price. Their luxury apartment also had significant depreciation deductions on offer for investors. BMT Tax Depreciation estimated Dean and Shay’s penthouse apartment to have a minimum of $62,735 in first year depreciation deductions and $1,621,688 over the specified lifetime of the property. Out of all apartments on the 2015 series, this was the highest amount of depreciation deductions available to investors. Do you love watching The Block? You might enjoy reading: Are home renovations tax deductible? What’s the difference between a cosmetic and substantial renovation? Lucrative assets to install when renovating

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The Block 2018 contestants tackle depreciation

BMT team — Wed, 17 Oct 2018 22:17:53 +0000

While it may not have been the reason behind their design and styling choices, The Block 2018 contestants recently discovered that their apartments hold millions of dollars of hidden value for savvy investors in the form of depreciation. BMT Tax Depreciation Chief Executive Officer, Bradley Beer, appeared on the show for a surprise depreciation challenge, which saw the contestants guessing the depreciation value of their apartments. The contestants were suitably baffled. “No one knows anything about depreciation tax, no one, unless you’re in the industry, or you’re a multi-million dollar investor or you’ve got an uncle who knows what they’re talking about,” said Jess when she and Norm were asked to determine what could be claimed from their apartment. The couples tried hard to calculate the construction costs but eventually gave up and guessed, or in Norm and Jess’ case, went to the pub for a drink – a reminder that all that hard work is better left to the experts. The results were astonishing, and all contestants severely undervalued their apartments. Kerrie and Spence’s apartment attracted the highest depreciation deductions, with over $3 million over the life of the property. This depreciation makes their apartment much more attractive to investors and could be just the encouragement a potential buyer may need to offer the winning bid come auction day. Before the luxury apartments go to auction, let’s take a look around some of the season’s winning rooms to see which assets attract depreciation deductions. Kerrie and Spence: kitchen Courtney and Hans: living and dining area Kerrie and Spence: master ensuite Kerrie and Spence: kitchen Kerrie and Spence’s winning kitchen astounded the judges with its functionality and inclusion of top-range appliances. The kitchen features an impressive wine fridge and a ridiculously spacious butler’s pantry. The kitchen received a perfect score from the judges, with Neale commenting, “for anyone who loves cooking, who loves entertaining, this is paradise.” Investors could claim capital works deductions on the kitchen’s cabinetry, tapware, sinks and benchtop. The rangehood, oven, stools and light fittings would all attract plant and equipment deductions, providing investors with additional cash flow. Courtney and Hans: living and dining area With the biggest living and dining area in the history of The Block, this space was destined to make a statement. And make a statement it did, wowing judges with emerald, velvet chairs and a surprise bar which emerged on cue with a command from Alexa. The area was described as ‘grandeur’ and ‘sophisticated’ and the judges especially loved the sitting area with two opposing lounges. “It’s not about having distractions. It’s not about having a television. It’s about actually interacting with each other, I love that,” Darren said. The space would also impress investors, who could claim plant and equipment deductions for the furnishings including the sofas, television, rug and coffee tables. The flooring, air conditioning and fixed bar cupboards would also entitle investors to lucrative capital works deductions. Kerrie and Spence: master ensuite Kerrie and Spence’s monochromatic winning ensuite dazzled with simplicity and space, with the judges commenting on the balanced styling and attention to detail. Unlike Hayden and Sara’s extravagant $75,000 ensuite, complete with a golden bath tub, Kerrie and Spence embraced a minimalist theme. The ‘regal’ bathroom cabinets were a big hit with the judges. “I love that curved edge, it just gives it that little touch of retro,” said Neale. The couple chose a grey, herringbone tile for their feature wall. The tiles and fixed items within the ensuite can be claimed as capital works deductions. This includes the tapware, sinks, cabinets and marble bench. Investors can claim the ensuite’s accessories as plant and equipment deductions. For everyday Australian’s who are considering buying an investment property, whether it be a Block apartment or a regular house or unit, discover what deductions you can claim and request a quote for a tax depreciation schedule today. All images from 9 now The Block.

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Depreciable items The Block winning rooms host

BMT team — Thu, 10 Nov 2016 23:25:26 +0000

The countdown to the final episode of The Block, which will air the results of the 12th of November auction, has arrived. As we wait to see which pair will take home the title of the best renovators, we took a look at some of the winning rooms delivered by the contestants throughout the season and point out some of the depreciable items which could entice investor buyers to place their bids as the auction hammer falls. Julia and Sasha’s master ensuite At the start of the season Julia and Sasha set the pace early, revealing a stunning master ensuite in which they spent a whopping $65,000. The girls chose the theme of ‘Hollywood glamour’ throughout their apartment and this was demonstrated in their bathroom which Darren Palmer described as the “perfect blend between contemporary, classic and classy, with a touch of deco here and there.” Shaynna Blaze loved the dark vanity cabinet and the black edging on the tiled inlets, but it was the $4,000 brass tapware and shower head which caught our eye. Much of a bathroom contains fixed items which can be claimed as capital works deductions should an investor buyer choose to rent the apartment. In addition to the tapware, capital works deductions can be claimed for the sink and cabinets in the vanity, the mirror, bath and tiles. Bathroom accessories used to style the apartment can also be depreciated by investors. Andy and Ben’s guest bedroom During week four Andy and Ben revealed a second guest bedroom which surprised the judges with an additional secret ensuite. The bedroom featuring neutral greys in the linen, rug and carpet was also a hit with the judges. On the wall, a giant feature was installed which showed a map plan of Port Melbourne from the Melbourne and Metropolitan Board of Works. Any of the beds and linen used throughout each of the contestants apartments will allow investors to claim plant and equipment depreciation, as would the rugs and carpets. The black cupboards which give the room a hint of art deco that the judges hoped to see during the renovation of the historical building would allow investors to claim capital works deductions. Dan and Carlene’s living room A wonderful choice of flooring, carefully selected rugs and the varied sofa and armchairs featured in Dan and Carlene’s apartment were enough to get a nod from the judges during week five. While the win shocked Dan and Carlene after they had troubles earlier in the week with preparations to lay their tiles, Neale Whitaker said the couple took “the art deco theme and turned up the dial.” Many of the furnishings in the lounge room including the leather arm chairs, the sofa, the curtains, lamp, rug and television will result in plant and equipment depreciation for an investor buyer of the apartment. While capital works deductions can be claimed for the floor tiles installed, deductions would have been higher if the couple had managed to install the underfloor heating initially planned. The judges criticised the couple for not following through with the heating with Darren Palmer saying “if you’re going to put tiles down, especially somewhere as cold as here, heat them.” Will and Karlie’s kitchen They say that kitchens help sell properties and without a doubt this season of The Block delivered some stunning examples. While two teams received high scores from the judges, Will and Karlie’s kitchen was the one which caught our eye with the slick black tiles and polished concrete floors. The tiles, tapware and polished concrete would entitle investors to capital works deductions, while plant and equipment assets such as the curtains, rangehood, stools, ducted air conditioning, oven and light fittings can also be claimed. For those bidding on auction day this kitchen offers a lot for investors to consider. While Shaynna summed it up by saying “I don’t know where to look, the floor first, or do I look at the kitchen,” our suggestion for investors is to consider the fact that kitchens are often the room within an investment property that will offer the most substantial depreciation deductions. Chris and Kim’s alfresco area While Will and Karlie won the best kitchen, Chris and Kim’s penthouse apartment almost offers up two with the amazing BBQ, rangehood and bar fridge included in their outdoor alfresco area. As with indoor items, outdoor areas offer a significant number of deductions for property investors. In addition to rangehood, bar fridge and BBQ stove top, investors would be eligible to claim plant and equipment depreciation for the furniture and the inbuilt sprinkling system which waters the hanging plants. Capital works deductions can be claimed for fixed items in the alfresco area such as the tiles, bench and cabinets. Although Chris and Kim struggled with mixed feedback from the judges throughout the season, Neale said the pair saved “the best for last,” describing the alfresco as “absolutely sensational.” BMT’s depreciation estimate suggests that Chris and Kim’s penthouse has the highest depreciation deductions available of all of the contestants for this season, with a first year deduction estimated to be $84,470 and a total deduction estimated to be at $2,448,042 which can be claimed by the new owners should they rent the property. While each property offers up both positive and negative aspects in terms of styling and design, all five contestants have created apartments which provide additional value for investor buyers. It will be interesting to see how many of the apartments are purchased by these buyers compared with owner occupiers on auction day. Blog feature image source: www.facebook.com/TheBlock/

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Three lessons from The Block

BMT team — Tue, 30 Aug 2016 01:50:32 +0000

It’s that time of year when television junkies and property enthusiasts sit on the edge of their couches to watch a new group of contestants take on the most epic of renovations in the latest season of The Block. This year we’ll be watching closely as Blockheads Julie and Sasha, Andy and Ben, Kim and Chris, Dan and Carleen and Will and Karlie pick up their hammers, tools and paint brushes to construct, create and style five apartments in the sunny bayside suburb of Port Melbourne. As the contestants work on sprucing up the former 1920s factory building, we took a look at some of the lessons the contestants could learn from previous seasons to improve their chances of creating winning rooms and apartments. These lessons will also help investors who plan to complete a renovation to their own investment properties. Set a budget and carefully plan where the money will be spent If there’s one lesson both this season’s Blockheads and property investors can learn about renovating from previous seasons, it’s that they should set a budget. Dean and Shay spent a third of their renovation budget ($40,000) on their penthouse bathroom during The Block: Blocktagon season and Tim and Anastasia walked out during The Block Triple Threat when they discovered they only had $1,500 left in their Block account. Already this season we’ve seen Julie and Sasha, Dan and Carleen and Will and Karlie struggle with budget issues during the 48 hour pod challenge and one pair has spent a whopping $65,000 on their very first room reveal, the master bathroom. Renovations involve careful planning, so it’s important to set a spending limit and to ask tradespeople to provide a quote before they start work. The costs of a renovation can blow out easily, particularly if plumbing and drainage issues are revealed when replacing old baths, vanities, showers and tiles in a bathroom or when removing and relaying pavers outside in the yard. In older properties you could also discover asbestos which requires careful removal which can be costly. It’s a good idea to set aside additional money just in case hiccups like these occur. While the Blockheads are required to keep a track of their budget and have the added advantage of winning additional money from challenges, there are no such extra windfalls for those taking on a renovation at home, so without careful planning it’s easy to end up with additional debt. Set a time frame for renovation completion During The Block Triple Threat, Tim and Anastasia received the lowest score ever revealed by the judges because they handed over an unfinished study. While property investor’s don’t have the same time constraints to reveal their renovations to a set of judges like The Block contestants do, this doesn’t mean they shouldn’t set a deadline for each section of work planned and due date for the project’s final completion. Often renovating an investment property will mean working quickly so not to disrupt an existing tenant. If it’s a major renovation requiring the tenants to vacate, owners won’t want the work to go on for a prolonged period that will result in any further loss of rent. As we’ve seen on The Block time and time again, things must be completed in order to allow a project to run smoothly. In the 2013 season of The Block Sky High, Alyssa and Lysandra showed the other contestants how careful planning earns winning results. In their two ensuite bathrooms, the pair carefully planned to place polished concrete over electric floor heating. Timing of completing such a task is important because it requires multiple steps to plan and install drainage, build screed placed over the electric heating elements, lay concrete and polish it for perfection. For this year’s contestants, as in previous seasons, if they don’t set time frames they will no doubt end up in hot water. However if all works according to their plan this will no doubt give them an advantage that could result in a win. Don’t just style, select assets which will increase your income There is more to be learned from The Block than what colour cushion works best on a particular duvet cover, what colour tile to place on the walls or which vase looks best on top of a mahogany bedroom dresser. While the new contestants should do their research to be aware of current styling trends, they should also think carefully about what they are installing in the property. As past contestants have learned, their decisions when choosing from the options available and the value of the assets they choose do have an impact on buyers. Many of the structures and assets installed will have additional value for investor buyers who can claim depreciation deductions over time for the wear and tear that occurs to the building and plant and equipment contained in the property. Two teams who successfully sold to investor buyers in the past include 2011’s Polly and Waz and 2014’s Simon and Shannon and a number of The Block properties have been rented after initially selling to owner-occupiers. For those planning a renovation to an investment property, while you might not be trying to tempt a new buyer, you may want to improve the rental return by luring a better tenant. You may also want to select items which will increase the depreciation benefits, so don’t forget to contact an expert and speak to a Quantity Surveyor before you start work.

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Going, going… Blocktagon…

BMT team — Fri, 20 Nov 2015 01:09:07 +0000

The countdown to auction day for this season of The Block: Blocktagon is here, with the hammer set to fall as bidders vie to secure their favourite property when the auctions occur tomorrow. For the contestants, the auctions will no doubt bring many emotions as they cast their eyes back on all their hard work over the weeks turning what was a thirty four room hotel into five luxury apartments located in South Yarra. Before the Block Heads could get too excited about the prospect of buyers snapping up their handy work, our very own Chief Executive Officer Bradley Beer took a trip to give the contestants some tips on the depreciation deductions buyers could claim if they purchase the property as an investment. A potential buyer who purchases any of the five Blocktagon apartments for investment purposes will find themselves receiving significant returns once the property is tenanted. On completing a tax depreciation estimate for each of the apartments, BMT Tax Depreciation found that investors could claim an average of over $1.5 million in depreciation deductions over the lifetime of the properties. The following table provides a summary of the tax depreciation estimates found by BMT. According to these estimates, Dean and Shay’s penthouse apartment will provide investors with the highest depreciation deductions. A buyer of their apartment will receive between $62,735 and $73,190 in deductions in the first financial year alone. Over the lifetime of the property, a total maximum claim of $1,891,969 can be deducted by the penthouses new owner. BMT’s estimates suggest Luke and Ebony’s apartments will reap the next highest deductions for investors, with the total maximum claim of $1,867,009 able to be claimed over the lifetime of the property. Kingi and Caro’s apartment has the lowest estimated deduction of the apartments, still netting a significant $1,792,190 in deductions for an investor buyer over the lifetime of the property. It will be interesting to watch and see whether these deductions impact the number of buyers attracted to each apartment on auction day. If BMT’s estimates are anything to go by, Dean and Shay could possibly be the lucky couple to take home first place this series. However, according to our own Bradley Beer, it is a close field and any of the five apartments could net substantial winnings if they sell above their reserve as predicted. So, like those Blocktagon fans of you at home, we’ll be eagerly watching when the hammer falls and the final episode airs. One thing’s for sure, an investor who purchases the apartments and claims depreciation will be a winner.

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