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The difference depreciation can make – a case study

Why is depreciation important? How does it assist you as an investor?

Let’s take a look at the difference depreciation can make to an investors cash flow once applied.

Mia purchased a two bedroom apartment for $528,000 one year ago. The property was rented for $470 per week with a total income of $24,440 per annum. Expenses for the property including interest, rates and management fees totalled to $37,935.

After calling BMT Tax Depreciation, Mia found that she would be able to claim $9,938 in depreciation deductions.

The below table illustrates an example of Mia’s situation both with and without a depreciation claim.


If Mia did not claim depreciation, she would experience a loss of $164 per week for the first year of ownership. Simply by claiming depreciation Mia can reduce her loss to just $93 per week. In total BMT Tax Depreciation would save her $3,692 in just one year; this is a significant saving.

Considered a non-cash deduction, investors do not need to spend any money to be eligible to claim depreciation. The cost of obtaining a depreciation schedule which outlines deductions for the life of the property is 100% tax deductible.  The deductions claimed from depreciation can make a substantial difference to a property investor’s cash flow.

Article provided by BMT Tax Depreciation.

Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is the Chief Executive Officer of BMT Tax Depreciation.
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