Investors tipped to appreciate The Block's depreciation

More than 50,000 fans have flocked to Cameron Street in Richmond to inspect the interiors of the four homes renovated for the Channel 9 hit television series The Block during its busy open for inspections.

But only a few have asked to check the depreciation reports for the four homes.

It’s the goldmine for investors seeking to maximise the returns on their likely $800,000 plus outlay when the four newly renovated fully furnished houses go to weekend auction.

All four listing agents have used the reports in their challenge to convince investors to be among the buyers.

The depreciation reports have been prepared by BMT Tax Depreciation Quantity Surveyors, which have inspected the older properties – now renovated – and estimated what a buyer could claim in deductions in his or her tax returns.

It is estimated the renovated house at 43 Cameron Street, renovated by Rod and Tania, could have an initial maximum $29,000 claimable depreciation in its first financial year. Its depreciation would peak in its second financial year at $31,500.

The house renovated by Polly and Waz at 39 Cameron Street could have an initial maximum $27,000 claimable depreciation in its first financial year. Its depreciation would peak in its second financial year at $29,700.

The house at 37 Cameron Street, which Jenna and Josh renovated, has an initial $25,000 claimable depreciation.

The house renovated by Katrina and Amie at 41 Cameron Street could have an initial maximum $28,000 claimable depreciation in its first financial year. Its depreciation would peak in its second financial year at $30,000.

Even though the buyers will not have carried out the work themselves, the  ATO allows property investors to claim a deduction related to the building and plant and equipment items contained within it. It can be claimed by any owner of an income-producing property.

The four houses would need to fetch close to $1 million to break even, given the $3.6 million initial purchase, plus other costs, but the television series is content to make its money from big advertising revenues.

This season of Channel 9’s The Block has rated well, with up to 1.9 million nightly viewers underpinned by about a third of its audience from Melbourne.

The next series of The Block seems set for South Melbourne, with the television show production company spending some $3,025,000 on four unrenovated terraces.

For possible rental yields of The Block cottages, see our Friday Form Guide.