36. Beware of depreciation deception
Don’t be fooled into thinking that depreciation is a nice little bonus for property investors. Sooner or later you are going to have to pay for the repair or replacement of a fixture or fitting related to your investment property.
Imagine you have spent $5,000 on some carpet and assume it depreciates by 10% per year for the next 10 years. After six years you then spend $8,500 replacing the carpet. You can’t claim that full amount. The depreciation you were claiming has already gone into that. You have already claimed $3,000.