investors set to dump properties, page-13

Depreciation is nothing to be jumping up and down with joy over... it just acknowledges property upkeep.

Let's say you deduct your new $5,000 carpet over 5 years at 20%/annum (or at the rate of $1,000/annum).. so if your tax rate is 30 cents in the dollar you saved $1500 over the 5 years in taxes.

So you're ahead $1500 in tax savings over the 5 years .. but you forked out $5,000 for the carpets in the first place... and probably need to pay $6,000 now for the new carpet (given inflation rate)... so you're still at least $3,500 worse off - because carpets do wear.

Carpets are just one of the expense items -

For a residential Property investor .. apart from rates has carpets, fences, spouting, plumbing, ducted heating, hot water system, repainting .. not to mention possible re-stumping, re-wiring, re-plumbing, kitchen and bathroom renewing, management fees, stamp duty etc.. etc..

A 3% net return would be welcome- so if you've borrowed at 8% is it any wonder that 70% are losing money ?