15: Are You Leaving Money On The Table? with Tyron Hyde

Did you know with just two investment properties and one single renovation that you could put over a million dollars in the bank? It's true. And why stop there? Welcome to your property Success podcast, the show that explores the practical steps to making your property investment dreams a reality. And now here's your host, a lady who once caused a stop work meeting because. Because of her new haircut, Jane Slacksmith.

Oh, that is true. That is true.

What a wonderful life you lead.

I do. I do. I was working at the mines at Mudgee and I had long hair all the way down my back and I decided to go short. And it. I don't know if they actually brought the stop work meeting on because of the haircut or it just came up during the meeting, but there was a 15 minute stop work and they all went into a room and I was excluded and they talked about did they like short hair or long hair on women for a while and they all came back out.

What was the conclusion?

I got the thumbs up. They liked the new look, which is good. We could all get back to work, headed underground, mined some coal, and life went on.

All's well with the world.

Wow. So a big welcome to your Property Success podcast and episode 15. And as always, we really appreciate you taking the time to be here. And, John, we have a very interesting topic for discussion today, don't we?

Absolutely. Well, this is an area that's. Well, it's completely overlooked by many investors, and I think there will definitely be people listening today who are leaving money on the table.

Yes, this might be the single most valuable episode of the podcast so far. John. Just listen to the end, everyone, and then collect the money. We are talking about the role that a good quantity surveyor should be playing in your property investing. And our very special guest is one of the industry's leading experts. So we are very grateful to have with us today quantity surveyor extraordinaire, Tyron Hyde.

Yes, Tyrone Hyde, CEO of Washington Brown. And why do we need a quantity surveyor, Jane? Can't just our accountants keep track of all this stuff?

I'm afraid not. And as we'll learn today, quantity surveyors can make a huge difference in how we build and grow our portfolios and in ways that you will be very surprised to learn about. And if you already own an investment property and did not engage a quantity surveyor when you purchased the property or before a renovation, there is some good news for you, too. You might find you've left money on the table that you didn't even know you had.

Like the sound of that.

Yeah. So don't go anywhere. We have a very valuable show for you coming up with today's very clever guest, Tyron Hyde. Hello, Tyron, and welcome to your Property Success podcast.

Hi, Jane, how are you? Thanks for having me on.

I am great. It's been a long time since we chatted, so. So I'm really excited to jump straight into this.

Now.

You have been around property for many, many years, but take me all the way back to the beginning.

Yes, I have. I started well, I guess. First got my interest in property when I think I was about 16. I was that guy that used to stand through the building site fences and be amazed at construction. And I still do that to this day, to be honest, which drives my wife a bit crazy. But, you know, I've always loved building and I started well, I actually applied to get into architecture, but I didn't get in. And my second choice was construction economics at UTS. And that's what I did for two years when I was about. That was in 1989. 90. And then if you remember back then, interest rates went to 70% for residential homeowners. Developers. Yes. So developers were borrowing money at 21% and it's really, really hard to make property development work at 21% interest rate. So, you know, Westpac New went broke. The cranes in the sky just came to a halt. And so I thought I'd do the right thing and backpack for three years because I couldn't get a job. And so then when I did that, I came back and I finished my two years because I was working over in London at the time, Jane, and I realized that working for minimum wage was not my cup of tea.

So you went and checked out the architectural sites overseas to compare them to Australia and bring back that knowledge, is what you're telling.

Very good. Yeah, pubs are different over there. So I came back and I decided that I had to finish my degree. And then in the last year, it was still really hard to get a job. Yeah, they're still coming out. That was like in 94.

So what would be the job that you'd come out of with that degree behind you?

Okay, so the job is a. Well, quantity surveyor is my profession. You become a. The degree was construction economics, but my quantity surveying is my profession. And that's basically we work out what things cost to build. And in that final year, we had to work voluntary. We had to work for a company for a year. And there was a guy at uni, the Brown in Washington. Brown. Mr. Brown. And he Put up some signs around uni cadet wanted and I went and stole them all because I thought I was too old to get into the industry at 24. And I was the only one that turned up Jane and I got that job. Wow.

Now that's an interesting interview technique actually get rid of all of the opposition. He must have thought that, that the university wasn't a place he'd source people from in the future.

Well he thought all his Christmas had to come at once because I worked for him for nothing for a year. But now I own the company so it's a good story.

So we're just going to call you the Gillette man. I liked it so much I bought.

The company pretty much. Pretty much.

So take me all the way back. Did your family have a background in property at all? Where did this kind of 16 year old kid staring through the fences looking at construction come from?

My brother in law was in property and he said to me once, he said Tyrone, he said two things, two things to me. One was that McDonald's wasn't really a hamburger making company, they were a property developer. That's interesting. And the other thing he said to me was and he's quite a wealthy guy. The other thing he said to me was you'll never make real money working for someone else.

Yep.

So which is quite true, you know. Yes, sure if you're the nab CEO you but how many of us can become that? But you can pound for pound I think you've got more chance of working, doing well financially if you are working for yourself.

So tell me, did your parents, were they property investors? Did they have their own home? Where were they from?

Actually to be honest, another thing that sparked my interest in property was around that time of when interest rates went high. My father was a lecturer all his life and he had his big nest egg of I think it was back then was like sorry, down dollars which is a lot in 1988 or around that time. And he lost it all in putting it into a company called Estate Mortgage. I don't know if you remember them but they were, they were pretending although there were ads back then to get you know I think at the time rates, I can't remember exactly when this was but rates say they'll have a time that you get 9% on your, on your, on your fixed term deposit and the average banks are giving you four or five. But you know, and they pretended to be a bank, you know they had the ad saying you're investing in residential property first mortgage secured but what they didn't tell you was that it was actually first mortgage cured on a property development site, not a residential home. So when the developments crashed, all the investors lost their money. He got 15 cents back in the dollar.

Gosh.

Something like that. But that was all he sued for all his life. And it basically killed him if you ask me. So I was pretty upset with that and that. I guess. So I've written an article on that and yeah, so I guess that kind of, I kind of like he was a lecturer, but he had no, he didn't really have a huge financial brain. And I guess they don't teach you financial literacy a lot. School I don't know about now, but they should. And I know Paul Clithero, he's always being on about that, that they should be teaching more on financial literacy to students. And I agree they certainly didn't back then.

It's interesting, we speak to a lot of people on the podcast and a lot of them do come from a background of their parents or there's been some family experience of either incredible opportunities being found through property or there's been the kind of disaster story where they've lost it all. And hard working. Seeing your hard working parents go through something like that definitely leaves a mark in wanting to make a difference. And I know that's exactly what you've done with Washington Brown. I mean I read somewhere at one stage that you read the tax laws at night trying to find a way around helping your clients.

I do. I didn't grow up thinking I was going to do that, by the way, Jay.

But architecture sounded so much more interesting.

Well, yes, I don't know if that's the best degree anymore anyway. But look, I certainly love that. I love. And I guess one of the things I've had the advantage of is dealing with some of the most financial savvy property developers in the country. Like I count Harry Trigoff as a. Well, you can as a client. He's one of my, he's one of my first clients, to be honest. And he's been loyal to me for 20 years.

And how did you first get him as a client? Because I think he also wrote the forward in your book, didn't he?

He did, he did. And there's a chapter there called High Rise Harry. I'll tell you that story in a second. But he, well, he approached us because back then there was only when I started doing quite explained depreciation work, there's only one or two other companies, one other company that was Doing it now, there's about 100. And he approached us because they used to do it themselves. They were really bad at it. And they approached us. We had this meeting with them and we thought I'd heard about this multimillionaire that was scary kind of guy. And he can be, trust me, he can be scary. But he never yelled at me. But he can yell. And he approached us and we thought, oh yeah, he's not going to pay. And we sent him all these reports and he carries a check the next day and it's been like that ever since.

So we're back in the time of curing checks.

Hey, well, back then in the time of him signing every individual check and him printing them out on dot matrix printers and stuff like that, which. That's him.

I guess the thing about Harry's, he's, you know, obviously you know him. I don't, but he's. He's hands on. And he's still hands on today.

Totally hands on. He's totally hands on. He's buying. Like he's. I just went to his 84 4th birthday party two weeks ago and he's still buying sites that are going to go for, you know, another 10 years. Talking about the definition of optimism. God bless him.

That's how we all should think. You know, it's plant the acorns for the future. Right?

Absolutely.

And tell me, so how did you go?

Where I was going with that was with a tax law. He's always pushing the boundaries. You know, the savviest people are always not just thinking, well, this is what, A plus B, A plus A equals B or whatever, whatever it is. Right. Well, maybe that doesn't make sense. Both by two equals three. He's always thinking, well, let's see if I can change those around and see what happens here, what happens there and test it, you know, because a lot of tax law, there's so many different variables that there isn't a ruling on everything. Yeah, right. You've got to go. Like I was writing an article yesterday on scrapping on when you renovate a property and throw things away. And I'm looking at the case law and I'm looking. And then I transpose that to all the knowledge that I know in like to how people do different renovations and what do they do here, what do they do there? And there can't be a ruling on every item of everything that you do. So we would have meetings that we would say, well, what about this, what about that? Why can't we look at it from this way, why do I have to look at it from that way? And that kind of stuff. I love, I love trying to think, well, you know, outside the square and how we can best benefit clients.

And so if I just go back to that, you know, you turned up as a uni kid, you know, doing a year of free work for Mr. Brown. And was there a Washington at some stage as well?

No, that was because, no, there was never a Washington. It's just probably the best thing that he ever did was create this name called Washington Brown. Because there was a developer down the road from us, we used to be in Crowsnest in New South Wales, in Sydney. And he had all these different companies names, Sterling Estates and Churchill Homes and all these kind of fancy names. And my partner Tony said to him, why do you do that? He goes, well, people remember it. No one's going to remember Tony Brown and Associates. So it became Washington Brown and that's it. It's better. It's a good name.

It is a good name. So, you know, you worked for him for a while. If we go back to that beginning, how did we turn into the Gillette man? When did he say, well, it's time that I moved on?

Yeah, that's a good question. So. Well, initially what I started in doing, so quantifying, it's not just I kind of specialize in the depreciation side of the business, but the other side of the business is more traditional side, which is where we're estimating for developers and banks and we go out and do progress claims each month and stuff like that. That's the traditional side. That's what he kind of was his baby and my baby. But I was on that side for a fair while learning that. And I think it's a good skill set to have. But then I saw this other avenue of depreciation and so I started that. And then I said to him when I was about 26, I said, so after like two, three years, I said, look, I think there's a business in here, I'm going to go and do it for myself. And he nearly fell off a chair. And then I started my own business for a year, company called property depreciation, which still exists, but it doesn't trade, but it's still around. And I did okay with that. And then he invited me back as a 50, 50 partner. So at a pretty young age, which is good. And so then that side of the business now does 10 times turnover. The depreciation side does 10 times turnover. Of the other side.

You have talked to Harry about that?

Yeah, well, that's right.

So tell me. Let's just get into what does a quantity surveyor do and who employs them when we're talking about depreciation and particularly on residential properties.

Okay, so in 1997, if we go back to what. Why quantity surveyors, not accountants. Not accountants. They'd actually not allowed us to do it. In 1997, the ATO put out a ruling that said quantity surveyors are the expert people in estimating costs where the costs are unknown. You can engage a quantity surveyor to give you a report as a property investor. And we'll write a report that says the construction cost is $200,000. And you claim that at a certain rate. And the oven in your property is worth X. You claim that at a certain rate and we break the building down into parts. And you give that to your accountant and then he claims those tax actions. Why coining space? Because the ATO recognised that accountants don't know what it costs to build to lay a square meter of bricks. That's what we know. And the cost, what you base your depreciation claim of the building on is the actual cost of construction, not what it's worth, not what the valuation of the valuation of the property or how much you pay for the property is completely irrelevant in what we do for the building allowance. So the ATO said that we specialize in that and that's what they accept. Where the costs are known. Where the costs are known. If you build a house, Jane, and you. And you have a building contract for $200,000, we can't come along and say, oh, we think it should have cost $300,000 and give you a report like that. Where the costs are. No, you have to take that into.

Account and you get down to how many screws are going to be used in the building when you're doing the estimate, really, don't you.

When we're doing an estimate for the banks and developers and builders, they can be very detailed. We're used to that kind of work. But it's. Can be very time consuming. But yeah, some bill, some. There's some things called. There's what's called a builder's bill. And that does get down to screws and. Yeah. And it's not that exciting. I've got to be honest with you. We don't. We kind of specialize. That's why I kind of moved away from that. Because, you know, you only measure carpet for so long.

Yeah, exactly. So back to like 1990. You know there's a couple of quantity surveyors out there. There's not hundreds of companies you're with Washington Brown. You know I want to the reason.

Why there's only a couple of companies because the eight these, these allowances. So the quantity survey has been around for 100 years. It's big in England and most of the quantity surveyors back in, in 1990 the ones that headed up the companies here were all English. The two pound pot, they were two pound pomps and they kind of started the profession here and then in when the. And the tax the depreciation laws on property only came around in 1982 and for residential 1985 so there was no industry depreciation pre 1985. So by the time when I'm graduating around 93ish it was still no one still knew about it. And also I wrote my thesis on depreciation of property and that's kind of why I catapulted into this, into this fear.

And so you know, back then when you were starting off and you know as you said Mr. Brown was into the, the big banks, developments etc and you were just starting and playing in the residential depreciation space, what was the percentage of property investors that would have used a quantity surveyor then compared to now?

I'd love to know the answer but it'd be very small like now. Yeah, I reckon the problem was educating people back then because remember this is pre Internet.

Yeah right.

So I used to, I used to back then I used to print. I used to manage to do one quote a day, mail out the quote, hope it would come back, you know with a form and, and you know in fact then believe it or not we used to charge three times what we charged today for a report but now we do a lot more obviously and there's economies of scale. But in answer to your question I reckon you, I would. You would have been lucky there was 5% were getting reports now. Well the ATO stats show that 67% of property investors are claiming depreciation and that's probably. And that probably so I reckon in reality that's probably like people that buy property today it's probably upwards of 80, 90 because you've then got other people that don't can't claim depreciation because or don't need to because their income so low. Then you've got people that have a property that's so old that there's no point. Then you've got other people that have owned their property. For 40 years and there's no depreciation left on it. So if you add up the 67% plus the ones that can't, you must be up near 80% of people are doing it now, which is good.

It's excellent. Well, I know my first property in 2001 was just one of the things on the list, get a depreciation schedule. So obviously there'd been a bit of education. But there's also just talking about the people who don't or can't get depreciation schedules or it's not in their interest. There's also those that might be turning the property over quickly because it's actually part of the. Can you explain. That's part of the capital cost.

Okay, so if they're turning the property over, you mean that they're flipping it?

Yeah.

So what you. Well, no, it's not. It depends upon how long they own it for. If they flip it, if they sell it before they. So that if they exchange when it's off the plan, and then they sell it prior to settlement to someone else, then they can't claim depreciation because they never physically owned it. So that's the one person. If someone owns it for two months and then they sell it straight away, definitely they can get a depreciation report. And in actual fact, they will probably. Even if you own it for one month, you'll be surprised how much you can claim. It's like settling on a property. If you settle in June, you might only own it for that one month of that financial year, but invariably you might be able to claim five to ten, ten grand just for that one month. And why? Because what we do is all items that are under $103, under $300, you get to write it off immediately as a tax deduction. Even if you own one day. Right. So you don't have to own it for the whole year in order to claim that. Same with what's called low value pooling, there's ways of fast tracking items.

And what about. Does it come off the capital cost at the end when they're doing the final calculation?

Yes and no. So there's two components of what we do in our report. There's the brickwork and the concrete, which is a structure that's called the capital works deduction. And then you've got this other thing called plant equipment, which is your ovens and loose stuff. So whatever you claim in the plant equipment, which is all your ovens and dishwasher, blinds, carpet, all that stuff that doesn't come off, that doesn't come into the capital gains equation. But what you claim in terms of the building allowance. Yes, you have to put that into the capital gains equation. However, if you're claiming it for the 10 year period or whatever, you're getting that money today. So there's a time cost of money equation going on there which is to your benefit. And then if you held it for more than a year, whatever you claim, you halve anyway because you've got the 50% discounting. Discounting at the moment. You have. Let's wait till the May mini budget to see whether they're going to change that. But at the moment we still have that.

And there's two ways of actually claiming back. Isn't it, isn't that plant and equipment? How does that work?

Yep, correct. Because you're right in saying plant equipment, because the building allowance component, the capital works deduction, you can't, you have to claim that at a fixed rate of 2.5% per annum over a 40 year period if the property is brand new. So.

And that had a start date too, wasn't it? That was the 1985, was it?

Yes. So the property has to be built after 1985 in order for you to claim that. But if you buy a Property built in 2000, right, and you buy it today for the building allowance component only, that's already used up 17 years, you see, because you can claim it for 40 years from when it's brand new. So if you buy a property that today that was built in 2000, there's only 23 years left for you to claim those deductions for the building allowance. However, the plant equipment, totally different. So it gets valued. And if it's 17 years old, it would have had probably two cycles of ovens in there. So we have to value the plant equipment as at what, based upon what you pay for the property and also its condition at the time of settlement, things like that. So, and when you claim those items, you can claim them under a diminishing value method or a prime cost method. One fast tracks one, one slows it down. Most people want to claim the deductions as quickly as they can because if you don't claim it someone else, you never, you can't. Someone else sleeping, someone else, what would you do? So then you ask yourself why would anyone want the slower deductions? And the answer to that is if, say you lived in the property for two years at the beginning, you don't want to use the fast track Method because you're just robbing yourself. You want to slow it down so that when you move down and it became an investment property, there's more for you left. So if you buy an investment property today and it's an investment probably from day one, most people choose the diminishing value method because you get more upfront. If you choose a prime cost rate, it evenly spreads things out. So if carpets worth a thousand dollars and it's got a 10 year effective life, you get to claim $100 per annum. Per annum. Per annum for 10 years. But if you lived in that property for two years, well, you don't want to use, you don't want to use the diminishing value method because in those first two years it eats up a lot of those deductions. You want to slow it down so that when you move out, there's more for you left to kick in to start claiming.

So that means that you can claim it while you're living in the property.

No, you can't claim it while you're living in the property. So that's why you want to slow it down while you're living in the property. So when you do move out, there's more for you to claim.

Great. Got it. Now tell me this with the, you just mentioned like a 10 year effective life. Who decides this effective life and is it the same for everything?

Great question. You should be quite as though. Okay, okay. So the ATO decides the effective life. I just wrote a blog on this. Actually, the ATO just wrote, the ATO determines the effective life of each item when it's brand new. Okay, so it says the carpet's going to last for 10 years. You get to claim it over a 10 year period, however, and most people don't know, so they have this effective life table, but that's only when it's for brand new. But it wouldn't stand to reason that if I borrow a property it's 5 years old, then it still has a 10 year effective life, wouldn't it?

No.

So you've got to revalue it. So we go out to the property, we say, well, look, it's actually five years old now, probably had more wear and tear than the average cover. Maybe it's only going to last for four years. And the advantage of that is that you then increase the rate of the deduction. Wow.

Okay.

And so because if you put, if you put back on that 10 year effective life, even though it's five years old, you're just robbing yourself. You've got to. It doesn't stand to reason that a carpet every time property transfers ownership has the same effective life.

So that's why you should have a quantity surveying surveyor go out and do a depreciation schedule every time there's a sale or a purchase or a significant change.

Absolutely. And for instance, just on that, to give the audience an understanding of how effective lives work, a good example is say an oven. An oven might have, I think it's an eight year effective life. But say an eight year effective life in a residential property, eight or ten. But a McDonald's oven. Right. It's got two because it gets used so much. Right. So that's what the ATO has kind of determined look at manufacturing specs and the usage of the item. Obviously you know that McDonald's hamburger grill's getting used every two seconds. Well, it's going to wear out quicker than the one at your home. It might get used once. It's.

So if I called you out to have a look at one of my investment properties that's got five tenants using the bathroom, in theory, we could claim things a whole lot faster.

In theory, yes. You could possibly argue that this has more wear and tear than the other. Similarly, like carpet, carpet in a commercial property has an eight year effective life because there's so much more traffic on it than the carpet in your home.

So what about people listening out there who've got an investment property doing the head slap going, oh gosh, I haven't claimed anything. Can they go back and claim from the past?

They can, they can amend their tax returns for two years if they're up to date on the tax. This is where it actually might be a benefit to people who are actually a little bit behind in their tax returns. Because you can amend your tax returns, but yeah, you can go back two years. But if you bought the property six years ago and it's an old property, there's no building allowance component, it's probably too late. So we always advise, look, you should get a coin surveyor out at, after, just after settlement. Because that is also the truest picture. Because we go out, we take pictures of the property, that's the truest point. To determine what the state of the property that you've bought is and what you know, in order for us to determine the effective lives of some of the assets. It's the truest picture we can get.

And what about those people? If you bought an investment property and you somehow know the investor has not been claiming depreciation, can you claim Their depreciation.

I like your angle, but no, you can't.

Okay. Always looking for the twist.

Years ago, you are. That's great. This is what I love. There used to be many years ago, a promoter, a certain promoter who I won't name, he used to. He used to promote that, which was just like, it was bad for us. Could we get all these people, ring us up, say, hey, but I just went to a seminar. They told me. I said, oh, I'm sorry, but you know, there's this other little thing called the law.

Yeah. Don't believe everything you hear at a seminar.

Hey, that's right. Absolutely.

Okay, so if we've got. Now, you mentioned you're doing a blog on scrap.

Except your seminars.

Well, thank you. You mentioned that you're doing a blog on the scrapping schedule. Now, this is something that I guess you revealed to me maybe five or six years ago, and I thought was fantastic. And we obviously talked to our renovation students about. But a lot of people don't know about this. So can you take me through what is a scrapping schedule?

Well, basically, when you buy an investment property, we determine what the value of certain items are in your property. And it's quite common that you buy property, whether you might have a tenant in place a month, six months, or a year. You might own a property for two years, and then you decide, well, I want to renovate that property. Basically whatever value is left those items, instead of continuing to claim them because they've been removed. It would stand to reason that you can't claim anymore. But there's a residual value there that we've assigned to that item, and you get that as an immediate tax deduction. Similarly, if you start knocking down walls, there's value attached to the kitchen cupboards, to the brickwork tiling. Provided the property is built after 1985, there's value attached to that. That can be huge in terms of the scrapping value. I did a report once for a client who. And also just on that, it's not that unusual to now want to renovate a property that's been built in 1990. And that's, you know, it's very common. This hasn't been such a big thing because, you know, properties, once you start getting about 20 years old, it's. I just renovated my property here in Bondi, and It was only 15 years old, and it was incredibly dated the previous renovation. And so, you know, times changing. And as an investor, you want to get maximum value of your property. You want to get a tenant look, sure, some properties remain unrenovated for 40 years, but not that common these days. From what we see, there's generally some form of renovation and as you get to a 20 year old property, it's starting to need a new kitchen. But the ato, the interesting thing is the ATO has determined that a lot of these items are going to last for 40 years, such as kitchen cupboards, such as a shower screen. Right. Now I disagree with that. I don't know about you Jane, but I don't want to shower in a 39 year old shower screen.

Right, I'm with you.

So the thing is when we. But as quality surveys, we don't assign values on every item when you get a depreciation schedule. So we don't say the kitchen cupboards were $10,000 in 1990. We tell you the overall building costs and we tell you the individual items such as the oven, the plant equipment items. So you as an investor, you don't know what the value of some of the things that you're about to renovate. So it's very key to get a quantity supplier out if you are going to renovate, to get a coin slayer out before you renovate. So we can document what you're about to throw away and put some values on that. And you'll be surprised at what the initial kicker or the initial claim can be once you've done that renovation. And then when you put in the new stuff, you start the new depreciation anyway.

Yeah, and so just on that I think I've previously forgotten pre renovation to call you up and I've been able to send in photos and a real subject of works of what had been done to the property. Now it's possible to do a scrapping schedule based on that.

It can be. The good news is that these days RP data has so much photographs, like back in the old days this probably wasn't possible. Sometimes we see 50. There might be up to 80 photos on some properties these days and, and document it over the years, it'll be like, you know, this has happened. I'll show you what. And I think they encourage agents financially perhaps even or some, you know, point system that the more photos they put up there the better. And that's great for seeing the history of the building.

I did a deal review for one of my mortgage clients recently and we went back and there was about, it went back to 1982 of photos and we could see there'd been two renovations that had been done because we're Trying to come up with the estimate of whether the person who'd bought it last had done a renovation since and whether the valuation that was provided by RP data was actually relevant. So incredible information there.

And even that also with Google Maps. Right. Google Earth. So we can go, you go on the timeline. We can see where someone might have put a shed in. Because I go when the pool went in. So we use all these tricks and tools to try and get as much information about a property.

Tell me this Google Earth timeline. Is there something. How do you know?

So you go, you can go on to Google Earth and you can, you can. It has an H bar there. So it'll show you what the, what their photo was in 2014, what the photo was in 2000. And same with Street View as well. So you can go back and see. Okay, so 2014, 2012, and go back sometimes up to over 10 years and see, you know, when they, when they rent, when did, when they rendered, when did the pool go in, et cetera, et cetera. It's great.

Fabulous. You can see some gentrification as it's happening over the years.

Oh, that's true. That's right.

And so, I mean, you did say people who possibly have property that's older than 1985 may not be able to claim depreciation. But my first property that I renovated was built in 1860, and I did a renovation, and I'm still claiming now obviously on the renovation itself. So it doesn't really matter the. The initial time.

Correct, Bill?

Doesn't.

No. So that's right. So Paddington Terrace, for instance, in Sydney, or what do you call them? Carlton, is it? Carlton Terrace. So the initial structure is not the. That's when the Santo Malls went in. But if the kitchen was put in in the year 2000, that capital work deduction starts again from when that. That was. So any capital works that occur, that's. So when the capital works were laid or fixed to the property, that's the date for that capital work. So, yes, you can buy property that was. You can buy property today that was built in 1800, but it had a $500,000 renovation five years ago. We're going to value that renovation five years ago. We might not. You won't be able to claim the sandstone brick, the sandstone blocks that are around the wall, around the perimeter, but you will be able to claim all the renovations that occur. And that's sometimes the trickiest part of our job because not so much on a $500,000 renovation, but sometimes determining because if it's just purely internal renovation, it's always sometimes hard to know the exact date of when it occurred, because you might not have to have gone to council and the previous owner generally might not hand over the information, or they won't give you the plans, or they might not have even been planned. So that's where we have to use our skill set, basically, in determine whether that occurred.

It's interesting, I often get questions just in our private Facebook group and people going, oh, the valuer and the quantity surveyor are coming out next week. I've got everything organised and, like, which one do I tell the real numbers to where the renovation is? Like, we don't tell anyone to tell rate numbers. But, you know, obviously, if you buy a property for $500,000 and tell the valuer you spent 50,000 on it, it's not uncommon to get a 550 valuation back. But, you know, obviously being able to source materials that are below the price and all the work and extra time you put into it, you know, is something that you could potentially tell that value. But when it comes down to quantity surveyors, we're handing over receipts, really. Aren't we saying, this is what we pay for this?

Yeah, that's right. And you know, you're right. Yeah, because we have to base upon the actual cost. Look, don't get me wrong, I know over the years there's been hundreds of clients, I suspect, that have done their own renovation. And I actually know there's one promoter. Again, don't believe everything in the seminar, but he used to promote, to do your own renovation. Then get a coin surveyor out and say, oh, look, I just bought it like this. It was like that. So we put an estimate on it, which, you know, we make people sign or confirm that they don't know the cost before. So they do that. Look, we're not the police. That's. That's your business. But I'm sure it's happened to me in the past. And we're not here to, you know, we're not the ato. We're not here to.

But, you know, and I'm not telling people to lie to valuers either.

No, no. But, you know, it's an interesting thing, valuations. They can, you know, it certainly can be argued, like people argue with us, that the costs, that they reckon the costs are more than what we estimate doesn't happen a lot, I've got to be honest with you. But it can happen and we take a look at it and sometimes it is hard to know and generally it is with the renovations. But, you know, there's some crazy things like. But we also. Sometimes we value the construction cost more than what you pay, especially post gse. I released one report once was in Noosa. The client paid $500,000 for the property. And I released a report because when this happens, when the construction costs go over the purchase price and One of my 20 surveyors want to release our report, my computer goes blah, which doesn't really. But it won't let it release it. It has to be signed off.

By the way, I'm all for the nerds unite kind of message here. So it's fine. I know it really does.

It shakes. My computer shakes and. And I had to sign off and I released a report in news that was $1.45 million. Build cost and purchase price was $500,000. Having a lot up for it there. And Port Douglas still have an industrial too. Some of the reports released for the industrial ones that JFC here were amazing. But, you know, the law is the law. If you Just because the building. Just because you paid the market got smashed, didn't cut construction costs of construction costs. That's the law. And there was actually a ruling that said, yep, they're right. The construction costs are more than what the client paid. You're allowed to see. This is the only deduction in the act where you can get more deductions than what you pay for it. Every other thing else is worth the value that you pay for it. If you buy a TV at half price, it might have cost Sony more to make it, but you've got to base it upon what you pay for it. With buildings, it's based upon what it costs to build, which is very different.

So were they residential properties or developments you're talking about?

No, residential. One of them was the Noosa home. Was a residential home. It was just a fire sale. And you know what happened after the gfc, of course, everyone that the first things that go we houses. Holiday houses and your fancy cars.

Yeah, exactly. Well, which kind of brings me to, you know, there's TV shows where people are doing renovations and I've seen some of the depreciation schedules after those. And you know, they're obviously including furniture as well. They're insane. Some of the depreciations people getting in the first year. You've seen those.

Look, I wrote an article. I'm not privy. I find them interesting.

Entertainment, I think they are.

Rather than educational, I think it was entertainment. Yeah. So I don't know. Interesting Interesting numbers there. But yeah, look, I don't know how they came about.

Let me take you to the big end of town. The developers, you know, how did they use? Quantity surveyors. And I was particularly interested in some of those colorful stories as well.

So developers, they use, well, sometimes they don't want to use it, but they have to. So when you go borrow $20 million from a bank, the bank just doesn't give you $20 million to build the project. They will say, well we want an independent valuation of what you're going to sell them for. And they also want an independent valuation of what it's going to cost to build. So we, we do that kind of stuff and then every month, we go out every month and release certain amounts. They don't give them 20 million up front. They'll release it progressively in the form of progress payments. So once they've done the excavation, we'll go out to that project and we'll release a report saying you can claim, Sorry, you've done $2 million worth of work. And the bank then pays the $2 million to the developer. Developer pays the builder, builder pays the subcontractors.

I'm sure the builder would like to have the money in advance.

Well, sometimes they try and claim it more than they should, trust me, especially up front. So what a lot of builders do is they try and say, they try and do what's called front loading, a job where they'll say that the excavation costs more because they want to cash flow their project and get as much money because unfortunately a lot of time builders are getting money one job and funding the other job and you know.

And they may not have the pre sales that they really thought they were going to get that was going to bring less cash.

Yeah, that's right. And the old days, many years ago, used to, developers used to get access to the, to the deposits. But that's obviously now inhaled in trust. But yeah, so that's, that's a big part of the, of the job. We also do things like you do reports, insurance, we do insurance reports. So if you going to insure your house or your, you know, we do shopping centers where we say because if it burns down, you want to, you want a realistic cost of, or the insurance company wants a realistic cost of what it's going to cost to rebuild that property. It's not just when you're doing those kind of reports, it's not just what it's got to cost to build. We have to take into account things like what it costs to demolish what you've got there. Because that just doesn't go from the, it doesn't just get removed. You've got to cost. Okay, what about the holding cost for a period? What about, you got to have someone redesign it. You've got to pay counsel again, all those things need to be factored into what you need to insure a property for, not just what the square metre rate of a building cost is.

Yeah, interesting. And tell me, you know, when you're, I see you on the Facebook page, you know, I'm sure you don't give the quality jobs to everyone in the office. I've seen you jet setting around the world. Tell us some of the interesting things that you've been able to go and assess.

Well, that's a good point. So because we now do depreciation all around the country. All around the world. So because yeah, it's a little known fact, to be honest. You probably know I'm the only one that's ever written a book on this topic called Claim it and I. So I think I'm a bit of an expert in this field and I hope I've come across a little bit like I have, but I didn't even know until about five years ago. And an accountant advised me. He said, look, you got anyone in England? I went, why? And he said, well, don't you know you can claim depreciation if you buy as an, as a resident here. If you buy an investment property anywhere in the world, you can claim depreciation based upon the Australian tax law of your property in. Wherever it is.

Get out of here.

Really. I know, right?

Loving this. I think I might go buy something in Fiji.

Yes, absolutely. And so we do do it all around the world and like sometimes it's like being great because I'll be going to Thailand and we'll get somewhere else. Like, hey, I've got a property in Kosoma. I said get out. I'm going there to tax deduction.

Pack up for the family.

Yeah, absolutely. So, yeah, so some have been good. I've done inspections in New York and I've done inspections in Thailand. It's been, you know, London, we do heaps, we do heaps and heaps in London.

So here's a twist for you. What if you, you know, you mentioned the $1.5 million property in Noosa that was a fire sale for 500,000, we had some astute investors out there that were not geographically bound. They could possibly pick up discounted properties throughout the world where the Depreciations could pay for themselves. Right.

That's very true. And like places like Spain at the moment, yields over there. Fantastic still. But you're right. Absolutely. And again, we're building this up. We're basing this upon the actual cost of restructuring. The only thing you gotta be worried about that it's like we've done some Spanish kind of golf, you know, like they went crazy, all the bricks went over there. They'll build these golf courses and stuff. And you go there. Well, I didn't go there, but we had someone go there and they're all empty. So, yeah, you're getting depreciation value but you can't get a tenant. So that's great. But you might get a deduction. But if there's no income coming in, it doesn't make it a fantastic deal.

Now you're, you're obviously still working with Harry and Harry's still working. You know, what's been the changes you've just seen in the developments? We know we're hearing about oversupply of units in Brisbane and Melbourne at the moment. What are you seeing?

Well, I'm seeing him not slowing down. And I guess look, I think to a certain look. But then again, you know, you said yes, you say you oversupply brought a friend the other day, that Melbourne's vacancy rates have gone down dramatically and even the Docklands was like 2.7% or something. So it's really hard to know. Look, I'm a little bit worried and generally speaking, I guess I'd be more worried where there's a lot of craziness going is probably where I wouldn't buy right now is a pretty simple theory. But that's what tends to happen if there's going to be no suppliers. Where the craze are, because I live in Bondi here and there's no cranes, there's no land, there's no one building here. I don't think there'll be no supply here. There's always going to be a lot of people that want to live here.

Oh, every time you mention Bondi, as you know, we used to have the only property I have ever.

That's right. Yes, that's right.

Right on Campbell Parade. We lived there and renovated it. Loved it. So I see you post your pictures going. I know that. And we, we ended up selling there last year and it came down to the cost of improvement. So beachfront older style unit and they went through and they looked at, you know, fixing up the roof and they looked at fixing some concrete cancer, etc. Improving it. And it came down to being 200 to 300,000 per unit.

Wow.

Yeah. In the eight unit block to do the improvements. And we had an independent assessment who said it could possibly be double that. And we went to our real estate agent down there and said, tell us, you know, Angelo, what If we spent 200,000 on this doing this work? What would we add in value? And he said between 25 and $50,000.

Because it's. Wow.

All, all going to be structural work. So no longer becomes a retirement plan, unfortunately.

But you, you know, you, you've got out a good time, so you've held it pretty good.

Well, well, we did, but we declared obviously that there was, that works to be done and it comes down to obviously the, the strata, you know, do no harm is our motto here. Do good.

Yeah.

So yeah, now we declare that's an.

Expensive renovation per unit.

Oh, and well, it's, it's the works to be done on the, on the roof, et cetera. But we did get a lot of developers come along trying to buy the roof space as well, which you've probably seen who like, we'll put in a lift and we'll own the penthouse at the top and sell it. So yeah, interesting things in Bondi.

Well then we just said, I just did a report on a job at Tamarama and they're doing the same thing. It's a, I'm gonna write a blog about it. I love writing by the way. And this unit, it's what, it's, it's this unit block, it's six levels, it's got a seventh level and it's such a state of dilapidation. I don't know if you know it, but it's, it's how it ever got approved in Tamrama. It's, it's a six story, kind of faulty towers kind of building. But it's got views, the most beautiful views. But the building can't cut, so they changed the laws about this because what, the building is going to go broke. They kind of, they need $20 million to repair this building. Right. And so they have done exactly that. They've now they also own up to, they own a block of land next, next door. They don't sell that for 4 million. They're selling the roof space, right, to someone, just the rights for like $10 million. Because you'll be able to build two penthouses. And that's the only way they could afford to keep this building to get it to, to a livable state because he is literally falling apart.

So hopefully going to spend that money.

They change the laws here. The New South Wales government changed the laws for this building to allow. To, to allow this building in essence, or allow a body corp to agree to sell the roof space rights to someone. So basically, yeah, so it's an amazing story, this building, but when the money's.

Going to go into just making it possible to actually build on top rather than that falling down.

Yeah, that's right. But they're also building all balconies. So this building back there with the most amazing views, guess what? She didn't put any balconies.

I know that area so well. Well, look, you mentioned you love writing and we've had chats about this regularly because you had a column in API magazine. How sad are we that that's gone? Because I used to love reading your blogs, but you obviously read, wrote, claim it and you've shared some tips in there and mistakes that people make. So tell me this, could you share with our listeners or people just starting out or thinking about getting into investing, what are some of the mistakes that people make when it comes down to the depreciation reports and what they might forget?

Well, firstly, two things I'd say first, getting into property. So I'll tell you, I started with no, I didn't have money when I started life and so I first two properties I owned, I convinced two of my friends to come in with me. I wouldn't and I didn't, but I didn't have any. So I know it's hard but you know, there are ways of being creative into getting into property. As someone who's starting and, you know, I don't think I tell people, you know what I tell my staff, I get, they always ask me for advice. Well, look, it is hard to get in the city market now, right, with a million bucks is the average house, you know, you've got in order to get a deposit, you've got what, 100 grand, you've probably got stamp duty of 30 plus. Plus you need like 150 to start with. How do you save 150 grand when you're earning an average of 60, $70,000, right? And you've got to live. It's incredibly hard. So I say, well, why are you looking at Sydney? I think sometimes we need to get over this mindset that we have to own the property that we're living, that we rent, you know, and why not? Like I have, why not have a. Find something you're worried about Having to move the time, sign a five year lease. I've had one tenancy. I don't know if you're allowed to do it. You can have. I've got a 110 on five year lease. I don't have a day. They're happy, they've got security. I'm happy I've got a tenant. Not that it's hard to get a tenantity at the moment but you know, but it makes sense. So I said why don't you just, just start buying around the country. Buy, you know, go to Hobart, go to Launceston, start there, then buy, you know, in Adelaide and you can buy little bites of the cherry and you still feel like you've got the home ownership, you've got diversification and you got less, you've got less lead tax if you, instead of buying the lots in the one state.

In the one state. And do you have properties around the country?

Yeah, so I'm currently, I currently like Perth to be honest. I always like to do the opposite of what everyone else is doing. It's the only way to make money.

Yes, Mr. Buffett.

Yeah, well that's right, exactly. Well, no Mr. Buffett, but you know, I think, look, you know, I've got one in Cairns but most of my properties are in new. I'm looking at another one in Queensland and mainly residential.

What's the Tyrone kind of buying criteria when you're looking at properties?

Cheap, discounted. So the office, I bought an office in Pitt street, my office there, that's probably one of the best investments I've ever made. That was in the middle of the GFC. So it was, I think I paid 880 for 330, 300 square meters of office in Pitt street, which sounds ridiculous when you, when they're selling studio apartments down the road for the same amount of money, it's like. And I, you know, I'm paying rent, I bought in my super fund and I'm paying, you know, a high amount of rent that goes into my super fund. It's a tax at 15%. Bit of a no brainer. Especially they're selling studio apartments down the road for the same amount of money.

You say that so fast and I hope people are going to go back and replay and listen to that. So there's a lot of information in there of people going, oh, oh my God, that's insane. And what about the other properties that you have?

So I've got two, I've got one in Bondi Junction. I live in the office of the House. I've got one in Manly, I've got one in Cairns, I've got one in Willoughby but it's only like a storage type of thing. So I've got also like shares property trust as well. But for me I prefer timing. So I look at when you know there was a time there Jane, where Do you remember when Sydney and Perth were exactly the same value? That medium price, right?

Yes.

To me that was a no brainer if you've got, if you did. But if you had a property in Perth, sell it and buy in Sydney. I think to the same degree now. I like it when it's hurt a lot. So you know I don't sell property but I have in the past, I regret it. But I look at buying in Perth because you know it'll come back and I think, I think over time you're going to see more of an imbalance now like you're buying a property in Sydney and I guess in Melbourne too like Yields is like 2% you know it's like even the commercial properties now they're selling on like 3% yields. It's like really. So I think I know because rates are looking long and low for a long time but you know, it just to me, yeah just I prefer to have a bit more yield in my property than what's being on offer to Sydney and Melbourne at the moment. I guess, I guess to a certain degree you're pricing more capital growth but.

I think you're willing to wait and hold for it.

Yeah, a little bit. I asked someone once a very well actually I asked Harry Triggerbott at lunch the other day. I said to him because he invited me to a lunch I said I had like 10 questions I wanted to ask him. And one of them I said one of them was quite well the first one I said well Harry, question okay, what's more important? Location, location, location or timing? Timing, timing he said timing, timing, timing every time.

Which advanced investors would say yeah well that's right.

And that's right. And the other one I asked him was quite funny. I said to him because I, because he builds in Sydney obviously and he builds in, in Queensland does like one in service paradise. I asked him harry, why haven't you ever built in Melbourne, right? Thinking he's going to say that the unions or the construction costs. He looked at me and said it's too cold.

Sydney and Surfers Paradise. That's it.

That's right, that's right. Too warm.

I guess so people starting out, some of the mistakes people Make.

All right, with depreciation, okay, definitely not getting a report would be the number one, would have to be the number one mistake. And also, also not your back date, but not doing it straight away. So like I said before, you have to, you can only go amend your reports, your returns for two years. So you should get us out straight away. So that would be the number one mistake. Number two, I guess with higher, with common property kind of developments, high rises and stuff. Not claiming the common property, your portion of the lifts, your portion of the common carpet. Okay, you own all that as well. You own a portion. When you buy into an apartment building, you're not just claiming what's internally in your unit, you're claiming all the peripheral items like the swimming pool and the lift and so forth. So you own all of that shared laundry because, you know, at the end of the day you're paying levies for that as well. So you may as well claim the depreciation on it as well.

And what about those doing developments, professional fees, council costs?

Absolutely. Yep. So that's so I read your book.

I read your book too.

So it's not just so when you can claim the depreciation of a building, it's not just what the bricks and concrete are. It's also, yeah, the design costs. It could be the engineers, the architects, the landscape architects. And then also there's a lot of council contributions as well. Sometimes Victoria, I'm not sure they're called Section 94 contributions, but you have to make contributions to the authorities in order to make amends of the development that you're about to do that's claimable as well as part of a building cost. You can't claim things like the interest on your construction, but you can certainly claim a project manager and other professionals that relate to the building.

You know, getting a depreciation schedule, in my mind, it became an absolute no brainer when I learned that it was deductible itself. And, you know, there's often some guarantees around them, right?

Absolutely. So our fee is deductible immediately. We get a lot of people instructing us in June because they want the tax deduction, even though we might issue the report to them in July or August. But as long as they engage us in June and pay in June, they get the deduction this year. So it's 100% tax deductible. And yeah, we guarantee that you can get at least twice your, our fee as a tax deduction in the first year from when you get the report. In actual fact, it's generally more likely to be five times, to be honest, at least five times. So it's a pretty. It's pretty compelling. Yeah, pretty compelling. I wish my stock, I wish my stockbroker said that to me. I'll give you $10,000. You guarantee to get me 20, will you? And you watch that stockbroker run.

I know. I just think it's an insane guarantee and it's a no brainer why people don't get them. But what for residential properties, what's the common cost that you would look at for a depreciation schedule? What do people expect to pay?

Between 660 to 770 depending upon where it is. But you know, we don't look. But that can also be a quite a bigger property as well. But we're nationwide and we're pretty much that fee all around the country now. So. Which isn't bad. We don't do a lot. Like when the mining boom was on, it was a lot. It was more difficult because there was a lot of people buying in a bit more regional location where sometimes the travel costs could be prohibitive. But that's not such a big thing now as you probably noticed, buying mining towns. But maybe it should be, maybe that will come back, who knows. But we saw some crazy, crazy prices being paid and it's quite sad. We know a lot of people, I go to seminars and I know some people promoting this kind of stuff and I know them and I feel really bad for them now because I was getting told to buy, you know, five properties in Moranbah that you know were 800k and now they're like worth 150. I feel sorry for. I hope they hope they got out in time.

Unfortunately a lot of people didn't get out. So. Yeah, it's heartbreaking and well, you know, how do people hear more about you or contact you? What's your, what's your website?

Okay, so it's www.washington. do you need to say www.these days?

I don't think so. I think people just assume that there's.

There, right. It's just WashingtonBrown.com, we've got no, no E on Brown. But there's. Look, there's a blog there they describe to.

There's a calculator as well, right?

Yeah, absolutely. It's. There's a depreciation calculator. So if you're interested in knowing how much you can claim on a, on a property that you bought or doing your maths, we've got the only calculator that lets you input what the property value is and what you'll get and what estimate of depreciation you'll get. So it's pretty cool. It took about five years to write, but it's. But yeah, it's the only calculator where you can put in a value of what you're about to pay for a property and get an instant depreciation estimate.

Fantastic.

Yeah.

And I encourage people to go and grab the book claim it too, because there's so many more little tips that Tyrone shares in there and just the depreciation schedule on the scrapping schedule and renovations, hopefully out of this podcast alone. Leave us a comment, guys on the, on the website. But I reckon we could save people thousands and thousands of dollars just going back and amending tax returns and probably the podcast. We could call this the $10,000 podcast. I reckon within a month we could save our listeners. But thank you so much for sharing all of these tips with us and your story. And I have to say I've got two pages of notes here. I've got. And I thought I knew a lot about depreciation schedules. I've got some tips for to go back to and I'm definitely going to go and check out that Google Earth Age bar. That's intriguing but I really appreciate your time, Tyrone, and sharing all of these tips with us.

Thank you. It's been fun. Hope you've enjoyed it.

All the best.

Yeah, that was great. That's great. Lots of. I mean, I've got a couple of pages of notes. Here's lots of things I learnt in that episode.

It's interesting, isn't it? You know that depreciation industry really didn't even exist before legislation came in. Pre1985.

His timing was good, wasn't it?

Well, somewhat. He did what, go to university and then take off overseas for three years. Hey, I do really like the idea of getting a job by going around the university and pulling off the signs so no one else knows that they're interviewing.

Came first in a horse race of one.

Yeah, exactly. And you know, back in 1990, it's interesting that, you know, in Australia most of those companies that were doing depreciation were headed up by the English. That was where the profession really started.

Yeah.

So, yeah, all the expats came over and headed up the industry. So yeah, it was really interesting.

And who better to start with? One of your first clients. But High rise. Harry. Harry, you know, one of the biggest developers in Australia and still a Good friend and mentor for Tyrone, wrote the forward of his book. Yeah, it was always handy to have and you know, it really cracked me up about High Rise Harry. So when he asked him, you know, why don't you have developments in Melbourne and you're thinking about some economic thing, but no, it's just way too cold. So there you go. But yeah, so really interesting and I guess, you know, you fast forward and you know, you have a look at, you know, it's very similar to a lot of the people that we've spoken to on the podcast. There's some type of history around, you know, their family or friends or money management or property kind of gone wrong and they want to, you know, kind of redeem that or help others in the future. And Tyrone's no different to that?

No. In this case it was his father, wasn't it? He got caught up in a bit.

Of a state mortgage company.

Yeah. Estate mortgage company. And the security wasn't where they thought it was and the developments crashed and all the investors lost all their money.

I know, it's a terrible story, isn't it? And it's something that comes around and we've had that with a couple of the guests on the podcast like Louis Christopher.

Louis Christopher.

You know, kind of a bad family start in property and, and the importance of financial literacy and these, I guess property experts today have really made that commitment to making sure that more and more people understand what they're doing. And the good thing about Tyron was obviously he had his father's bad experience where he lost the golden egg, the cash retirement fund, but his brother in law was actually in property, so he could actually see property from a positive point of view as well.

Yep, yep.

It was the McDonald's comment, right? They're not a hamburger company, they're actually a property developer.

Yep, absolutely. So, yeah, that was really interesting. And you know what I really loved about the story about Washington Brown was The fact that Mr. Brown named the company. So what did he say? He said, no one's going to remember Todd Brown and Associates, but Washington Brown.

Sounds so strong, does sound good. And he liked it so much he bought the company.

Exactly. That's why he's our Gillette man. And so Tyron, you know, he started out and he was specialising in that kind of depreciation, residential side. But you know, the insight that he really shared with us about what quantity surveyors do for developers is really interesting as well, isn't it?

It is, yeah.

And we had this on our own developments, particularly on Our first development that gave us a lot of help, just understanding how the payments were released to the builders and all that kind of stuff. And yeah, like he said, they know every single part of that building. It's amazing.

And of course, in the past a lot of people thought that their accountants could provide the depreciation schedules for them. But Ato says no, has to be a quantity surveyor. So those things that we kind of learn along the ways. And I really like the insight that Tyron gave us into the different methodologies of calculating the depreciation and the choices you might make about the two methodologies, that methodology around doing the prime cost or the diminishing value. And understanding one really has the front end loaded. So, you know, a lot of depreciation at the front. So if you're living in the property and plan to make an investment, you don't want that. But if you maybe plan to sell the property in three to five years, you probably do want the front end loading. So, you know, just understanding that because I know when I originally used to get my quantity surveyors to send me the depreciation reports, I'd look and I go, I've got these two methods, you know, how do I decide? You really have to have that conversation with your accountant. So you need more clarity.

So you need to get the three.

Of you in it, in a clear plan.

Yeah, absolutely. And you know, the thing is there's so much that value, as you said, the quantity surveyor can add. And you know, recently with renovation that I did in Sydney last year, I had a scrapping schedule done. And you know, it was fabulous to be able to just pull, you know, depreciate straight away some of those things that we just threw out. And I think for renovators, you know, one of getting a scrapping schedule is fabulous.

Yeah, that's great. And it was good too, with the, the renovations. If you haven't got a quantity surveyor in at the right time, and he said the right time is when you purchase a property or before you do the renovation. But if you haven't done that, you can actually go back and go through the photos. And also he mentioned the Google Earth timeline.

Absolutely. So using Google Earth to go back, you know, a period of time to have a look at the changes that have been made, if you have, you know, had that property and that's what they use. But you know, if you haven't claimed on your tax return, here's some more money in the, in the pocket for you. Yeah, back two years, you can go Back and actually get that depreciation schedule done and claim that on your tax returns and have them amended.

So worth the price of admission alone, that one.

Absolutely. And Tyrone, he's just. His thoughts about what's happening in the market now and obviously he's looking at that contrarian type of investment, looking at Perth.

Yep.

He likes the timing, timing the market and he likes the big yields.

And as we say, be geographically agnostic. He buys around the country and he looks at the numbers first and isn't kind of linked and set in stone that he has to buy in a particular place. And he talked about the most common mistakes that people make. And I think the thing is you've heard about leaving money on the table, depreciation schedule. As you drive the car out from the showroom. It goes down in value. Your land should be going up in value. Your property goes down in value as there's wear and tear and the Australian tax office allows you to claim that. So, you know, get the most of it. There might be some money that you can claim in your next tax return and let us know if it has been because we might put a bit of a tally together. Just send a review, write a review for us.

Yeah, that'll do.

Get onto itunes.

Yep, absolutely.

So once again, an amazing episode, John. And I know you had two pages of notes. I cracked two pages as well. And I know this is a big win episode for some of you out there listening who are really, really encouraged to run out there and take some action today. So let us know.

Yeah, yeah, absolutely. And speaking of big wins, Jayne, it's that time again.

Yes, it's that time again where you get the chance to test your suburb knowledge while the entire nation holds its breath. Ladies and gentlemen, it's time to play Suburbs against the Clock. The rules are simple to play. All you have to do is answer a question about 10 suburbs in the city of your choice. And within 20 seconds, the lucky winner of Suburbs against the Clock will win one year's free access to your Property Success Club. Your Property Success Club is an in depth monthly masterclass which gives you the practical tools needed to grow your portfolio yourself without having to spend a fortune on expensive seminars or even leaving your own home. So who do we have standing by to play Suburbs against the Clock?

Hi, Paul. Can you hear it?

Good to go.

Oh, wonderful. Okay.

Okay, Paul, now do you know how Suburbs against the Clock runs?

I certainly do, yes.

Oh, good. Okay.

Well, I have to tell you, you know, if you're already a member of your Property Success Club. Some changes are afoot. Are you a member?

I am a member. Yes.

Changes are afoot. So if you do actually get 10 suburbs in 20 seconds, then we will renew your membership for another year. So something good to play for to.

The new UBI revamped version.

Alright, no pressure, let's go.

No pressure. Okay.

Now Paul, which.

Which city would you like to play for?

Sydney. Let's go.

Sydney. Yeah, okay. Okay, Paul, your question is, can you name 10 Sydney suburbs that are beach front?

Beach front. Started Manly 1, Bondi, Tamarama 3. 10 seconds. That's it.

Well done. Well played. It was so tough. But you were close, Very close. Thanks Paul, for being such a good sport.

Not a problem, guys. Thanks again.

See ya. And if you'd like to test your knowledge in the most modest and unassuming. No. Best suburb quiz in Australia, simply email supportysuccess.com and use the subject line Suburbs against the Clock. And yeah, please keep those suggestions for the questions coming too, please, because we're.

Really getting at the bottom of the barrel, aren't we?

Obviously.

Well, John, that's it for today. A huge thank you to today's fabulous guest, Tyron Hyde. Now, if you would like instant access to the transcript, plus get access to some free training we have for our community and all of the show notes and links to everything mentioned in the show, including a link to an ebook that I've put together with Tyron where we bust some myths about depreciation schedule. Please head over to the website YourPropertySuccess. That's YourPropertySuccess.com. the letter E for Echo, P for papa, and the number 15. So that's all for today. Stay safe and here's to your property success.

Ladies and gentlemen, it's important for you to understand that you need to take care in applying what you've heard on this podcast to your own personal circumstances. Everyone's situation is different and while we go to great length to ensure that everything we share is accurate, the information in today's podcast was based on personal experiences and opinions and is not intended to be specific to your circumstances. We are not real estate agents, financial planners, lawyers or accountants and are not liable for any loss, damage or misunderstanding caused by reliance on any information provided or inferred. We highly recommend you seek out the services of a professional or mentor to help chart your own path to property success.