Tyron Hyde is the dynamic CEO of Washington Brown, a long-standing firm specialising in depreciation reports. With over 35 years of experience in the industry, Tyron has played a pivotal role in assisting property investors in maximising their returns through depreciation benefits.
Under his leadership, Washington Brown has served over 250,000 property investors over the last 35 years, providing them with accurate and comprehensive depreciation reports to help them pay less tax. Tyron’s expertise in this field has established him as a trusted authority in the realm of property depreciation.
He’s known for making a significant impact on the lives of property investors and empowering them to achieve their financial goals through strategic depreciation planning and sound investment advice.
To learn more about Washington Brown, visit the website here.
We connected with Tyron Hyde and today we bring you the insights he shared, as well as a deeper look into his entrepreneurial journey:
Q. How did you get started with Washington Brown and what has the journey been like so far?
Tyron: Washington Brown has been in business for over 45 years now! Founded by Quantity Surveyor, Tony Brown, I was initially employee Number One. I was halfway through a Construction Economics degree at UTS and had to work voluntarily for a firm. That firm ended up being Washington Brown.
When I first started at Washington Brown I was involved in the more traditional side of Quantity Surveying. We would get instructed by a bank to provide an independent cost estimate at the beginning of a large construction project, then visit the site each month and certify how much work was completed so the bank could release funds to the developer.
Whilst at uni, I wrote a thesis on Property Depreciation – which very few people knew of – and started selling this service. It became a joint venture between myself and Tony Brown. The depreciation side took off enough that I eventually bought Tony out – and the rest, as they say, is history.
Q. You’ve worked with Harry Triguboff for the last 25 years, what have been some key lessons you’ve learned from him?
Tyron: I first met Harry Triguboff, the owner of Meriton Apartments who consistently ranks as the richest person in Australia, over 25 years ago.
He trusted me to prepare all the depreciation reports for his clients and vast empire. He continues to be the most intriguing, loyal, fascinating, tough, intelligent and funny man I have ever met.
The three most important things I have learnt from him are:
- Adopt great systems. Anyone who’s renovated a property or built a house knows how hard it can be. Try building 5000 apartments a year at the age of 90! The systems he has implemented over many years enable him to do that.
For instance, he can tell you how many ovens are installed in any given project or how many units were sold today and at what price. He certainly has his finger on the pulse.
- He is the original 1% man. If you have read the book Atomic Habits, you’ll understand the compounding power small changes can make to one’s life or work. When I wrote my book Keep Claiming It! I sent Harry a copy to read, as he was featured in a chapter called “High-Rise Harry”.
When he finished reading the book, he called me into his office every week for five minutes to teach him something new about depreciation. Now if he does that for every trade or service in his business, you can imagine the compounding effect. He knows more about property depreciation than any other developer I know. I guess it’s worth having a vested interest when you have a $26 billion property portfolio!!
- Cash is King. We’ve all heard the saying, but seeing it played out in real life has been amazing. Some of the deals he has done are spectacular. I shake my head and think “How the hell, Harry?”
But it’s because he has been able to make quick decisions without the need for board approval and pay cash when others have faulted by, generally, being in too much debt. With Harry, it’s certainly a case of TIMING the market – not TIME IN the market.
Harry once told me the Secret to his Success, and that’s another valuable thing I’ve learnt from him. He said: “Tyron, when times are bad I buy land. By the time I get development approval, times are good again!” It’s so simple, I couldn’t believe I hadn’t thought of that before.
Q. How does a depreciation schedule provided by Washington Brown benefit property investors?
Tyron: A depreciation schedule is a document that helps property investors save money by paying less tax. As a property investor, you can claim the wear and tear of a property against your taxable income. Just like a tradie can claim the depreciation of their tools against their business, you as a property investor can claim the wear and tear of a property against your taxable income.
There are two components of a depreciation schedule: a) The depreciation of Plant and Equipment. That refers to things like ovens, dishwashers, carpets, etc., and b) The depreciation of the structure of the building, known as the Building Allowance. This encompasses items like bricks, concrete, windows, doors, etc.
Property investors can now only claim the depreciation of Plant and Equipment if they buy a brand new property or acquire the individual asset brand new. The depreciation of the structure of the building is based on the original construction cost and can be claimed at a fixed depreciation of 2.5% per annum over 40 years.
So if the original cost of that component was $200,000 10 years ago and you buy the property today, you would still be able to claim 2.5% of $200,000 = $5,000 per annum for another 30 years because the property is only 10 years old.
That said, the rates for the depreciation of Plant and Equipment vary for each item. A depreciation schedule from Washington Brown will itemise and separate these items enabling investors to simply hand the report to their accountant and be done with the process.
Q. What are the distinctions between residential and commercial property depreciation?
Tyron: The overall concept of depreciation is very similar between residential property and commercial property, however, there are two distinct differences.
Firstly, the items can vary in commercial property depreciation. Different buildings have different items in them and can be very specific even down to the type of building. Various items might be a Gantry crane in an industrial property or freestanding counter shelves in a retail shop.
Secondly, unlike residential property, you can still claim depreciation on second-hand Plant and Equipment items. In 2017, the government amended the law to prohibit property investors from claiming depreciation on second-hand Plant and Equipment items for residential property only. I know it’s bizarre, but that’s the law now.
Q. With these changes in the law, is property inspection still worthwhile for depreciation reports?
Tyron: The simple answer to that question is SOMETIMES. At Washington Brown, we analyse your property and provide you with a depreciation plan to maximise the depreciation for investors.
There are 3 main reasons why a property might not need an inspection:
- Because you’re not the first owner. Prior to 2017, we visited every property to measure the Plant and Equipment (carpet and blinds, etc), but this is no longer necessary in some cases.
We might still need to visit the site to get the area of the property to calculate the original construction cost, but in some cases this can also be achieved by accessing the strata plan for a unit and other online sources.
If we don’t have to visit the site we will pass this saving on to you and still provide you with the maximum depreciation claim.
- Because we already have the costs. Washington Brown worked on projects for over 45 years and already has the costs on a vast array of projects around Australia.
- Because YOU have the costs. If you have engaged a builder or done a major renovation yourself – we must use your actual costs. Inspecting the property won’t get you any higher deductions than what you have spent.
Non-residential properties, however, must still be inspected so we can value the second-hand Plant and Equipment items. We also inspect any unique type of property or where we can’t access enough information to carry out the report from our various data resources.
Q. Tell us about your new podcast series, Ten with Ty. What inspired you to start it, and what topics do you cover?
Tyron: Growing up, I saw my father lose all his money following a failed property investment and that was tough to witness. It’s one of the reasons I moved into the property industry. Now that I’ve done well, I’d like to leave a playbook for my family and other keen investors on how to not only generate wealth but more importantly, keep it.
I’m doing this by interviewing some of the smartest and most successful people I know across the property, finance, and investment fields. I ask them the same 10 questions to uncover the key to their success, so we can all learn from their wins, losses and strategies.
The questions range from “What has been your best and worst investments?” to, “What would you tell your 20-year-old self about investing?” My favourite is “What does success look like to you?
Because I am interviewing entrepreneurs, share experts and property gurus, I have been amazed and thankful for the diverse answers from the guests so far. So whether you’re starting out or just want advice to pass on to your kids – join me on this journey by subscribing to Ten with Ty.
Q. What’s the main piece of advice you would give to property investors who are just starting out?
Tyron: The main piece of advice I can give property investors is to do your research before buying a property.
Invest in an online resource like RP Data so you can access comparable sales and know the true value of when you are buying.
Never make an investment decision based on the tax benefits, make it based on whether you see, based on your research, the potential for capital growth. Depreciation is the icing on the cake.
Finally, skill up and understand the property investment equation before you buy a property. Know how depreciation works, and understand the Capital Gains equation when you sell the property. That way, hopefully, you will make a more informed decision before you buy.
For more information about Tyron Hyde and Washington Brown, visit the website here or connect with them on LinkedIn, Instagram or Facebook.
For more news, click here.
