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There are some incredible property investment opportunities in 2011; with key growth areas positioned to experience strong capital growth. Property investment is not just for the rich; it is how everyday Australians become wealthy. It is timing in the correct locations and time-in the market that has proven to be a safe and secure investment for over 100 years. It is a supply and demand problem, with Australias 300,000 house shortag e expected to be 600,000 within 5 years due to population growth in key locations along with a shortage of developed land, and house prices and rents continuing to rise. We know property is the answer to secure our financial future, but many people make common mistakes:
The tenant pays approximately 72%. This is based on the investment property being in the correct location to return a strong rental yield. This leaves you with approximately 5% to cover, although these figure are a general example.We recommend you talk to a financial advisor and your accountant to get the correct figure for you, as everyone circumstances are different based on your income, Marginal Tax Rate, Rental income, Property Value and Interest Rates. The fact is nearly everyone who has equity in their family home or cash for a 5% or 10% deposit plus costs can afford to invest with little out of pocket expense from the family weekly budget. In most cases everyday Australians can do it on a lunch money budget.
We recommend you sit down with one of our Mortgage Brokers/Financial Planners for a free (Normally $350)no obligation consultation. They will look at your personal situation, lifestyle and most importantly your Cash flow to work out; 1) What is your current facility, is it what you require and will it work best for you and your financial situation. 2) How to pay off your home in record time using your Cash flow, taxes and income. 3) How can you save money? Is there a way to improve your current financial position? 4) How much money can they save you by just looking at your bank fees and Interest Rate? 5) Are you maximising your potential tax benefits using the ATOs policies? 6) How can you utilise your tax to build you wealth?
Fantastic- once you have a date in mind and an idea of what you want you can now plan your strategy for success. You can do it - do one thing and do it well. If you invest in the correct properties over a 10 to 15 year period you can have up to 6 investment properties passively, using the 8.5% capital growth that Australias property market has achieved for over 100 years and you could be worth over $3,000,000 in equity and have an annual income of $60,000 to $70,000. All on a lunch money budget.
If this sounds good to you then start today, get committed to your financial future and follow the three steps to top success: 1) Decide you want to do it 2) Get educated 3) Invest and duplicate You can do it; property investment can be easier than you may think. For a property prosperity plan talk to one of our consultants and we can look at your individual circumstances, importantly educate you in the inner knowledge of Property Investment and surround you with property focused Financial Advisors, Mortgage Brokers, Property Managers, Solicitors and Accountants. Our associated professionals make it easy for you and save you time and money.
4. People get sold over priced apartments on hype and glossy brochures
One thing that stops people from really achieving their financial goals is investing poorly to start with Not achieving the results they were promised, buying in poor locations, with a poor quality build therefore attracting poor quality tenants, all this ends up being a disaster and therefore they lose their traction and sell the property for a financial loss and heartache. This is where getting the correct education is crucial, so you can make astute informed decisions. We see so many people who get sold properties, specifically apartments, at inflated retail prices with glossy brochure, a good sales pitch, inflated rental returns and pressure sales. There is no doubt the correct apartment in the correct location, at wholesale prices can make a good investment, and has strong depreciation tax benefits. Although by saying that we all know land appreciates and buildings depreciate.
You want to have a minimum of 35% to 40% land content in your investment, which is found in most house land investments. You will find high rise apartments are only 5% to 8% land content, therefore your appreciable investment is minimal. Dont get sold an investment, do your due diligence and invest in property that is house and land.
Please get yourself educated, read books, use our free, no obligation educational services before you do anything. You would be surprised, most people spend more time researching on a TV purchase then they do on Property they invest in, and wonder why things did not work out for them.
Older affordable properties are often in poorer locations therefore having less rental demand which can = less rental yield and problem tenants. When investing in older properties you are relying on Median house price growth to provide you with capital growth. Stamp duty on an existing property is for the total value of the property, this is another unwanted cost. In reflection when you invest in new properties (house and land packages) you only pay stamp duty on the land, saving you thousands. In the correct Blue Ribbon Estates you gain with median house price growth catapulted by infrastructure growth and population growth, new large homes setting high Established Capital Bench Mark around you all driving up the growth in your investment. New homes in beautiful locations attract a high demand for tenants. You can have a choice of who is renting your property, they look after it, and you can ask for higher rents. Buying new there are no maintenance issues or very minimal that are normally covered by the builders warranty period - in our case the first six months after the build - not the BCA (Building Code of Australias) 4 months, which is standard. Importantly you do not waste your precious time and money, it is stress free and safe and secure so you can sleep at night. When you choose the right builders and developers, this again is where we can help you out with our unique network.
Conclusion
These are just some of the common mistakes. To learn more and to educate yourself on techniques for safe, secure investments for maximum returns with minimal outlay, we welcome you to take up our offer of a free no obligation Personal Prosperity Plan, or attend a weekly workshop/Webinar or Monthly information night. Or, if you like, first call for a chat. We love to help people!