Tuesday, 22 September 2015

Why do you need to listen to an expert? And who do you choose?

Today we seem to be surrounded by experts at everything....

We all judge Master Chef, Dancing with the Stars and X Factor like we know what we are talking about.
I know that I am an expert at Football and I have never played the game at any level that counts.

We have political experts that tell us how well or badly our politicians are doing and we have politicians that are experts at running the country where they have never run anything except a political campaign.
Now I have been providing property investment advice for about 20 years now and still don’t consider myself to be an expert but I have seen a lot of mistakes and learned from what others have done.

If you do something long enough you get very good at it or you just don't last.

Why do you need an expert’s advice WHEN IT COME TO PROPERTY?
Answer; It’s just too hard to try and do it by yourself.
Most property investors don’t achieve financial independence because:
the first decade of anyone’s investing career is their learning curve.
Of course many never survive this stage… about 70% drop out during the first few years.

Those that make it past 10 years have to make up for the lost time and lost money and often take unnecessary risks.
There is a huge learning fee involved – of time, money, effort and heartaches.

On the other hand following the teachings and proven systems of those who’ve already achieved what you want to achieve while not guaranteeing your success, makes it very much more likely that you will succeed.

Google makes everyone an expert nowadays and it seems that property investment is no exception.

During the years that I have been doing this I have seen more experts come and go than I can count. They all supposedly made millions and now want to share that knowledge with others. They all have very compelling stories to tell and it gets you in. I have to admit that even I am intrigued at times.
But I suspect that that is all they are… stories.

In the past 20 years I have heard the Negative Gearing argument, then the various Positive Cash-flow arguments. There was the NRAS story, the Mining towns boom/bust and a number of so called strategies to make millions including Option Agreements, to name just a few.
Experience has shown that they only make money for the promoter.

So who can you trust?  The answer is someone who has been through it all and has a simple uncomplicated strategy.
“The schemes are more scams than strategies”.

That strategy should involve understanding the property cycle (the 5 to 7 and 3 to 5) so that you buy in the right place at the right time. It should be easy to explain and understand and usually will involve a simple purchase of a well located property in a location with a proven track record.
Give us a call if you would like to know more…

1300 131099

Thursday, 17 September 2015

Top 10 Criteria for Good Investment Growth - Residential Property

So how do we choose the best property for capital growth?

Do you look in the newspaper, look on the internet, or ask a real estate agent?

That is what most people do....

They say that property doubles every 10-12 years so can we just buy any property and it make money for you?

Unfortunately not all property will double...

Statistically the average of all properties will usually double in that time, but that means that statistically some will more than double and some will less than. That is how you end up with an average.

Actually because some properties will boom some must do virtually no growth at all.

So how do you choose those properties that will outperform the averages?

With nearly 25 years of assisting clients (through a couple of entities) we have quite a bit of experience and data to help make those decisions.

One thing we have learned is that property growth is not consistent. It does not grow each and every year. It follows a cycle of good and not so good times... The Property Clock. (see link below for more detail on the Property Cycle)

What are the criteria to look for?
 The Right Time in the Property Clock Growth Cycle
Then as many of these factors as you can get:
  • Less than 10kms (Adel) and 15kms (Eastern States) from a CBD... Usually not in the CBD.
  • Diversity of Economy, Employment and Social Demographic
  • Surrounded by Quality Housing
  • Surrounded by Quality Suburbs
  • Going through some Urban Renewal
  • Median Price or slightly above for the location (but don't pay too much i.e. Bank Val.)
  • In Demand but with No Oversupply Possibility
  • Good Tax Deductibility Factors
  • Good Rental Yields
Transport (Public and Highway)
  • Good Public Transport to CBD and Hubs
  • Good Highways to CBD and Hubs with Limited or No Bottlenecks
  • Close to Supermarkets
  • Close to Quality Schools and Universities
  • Close to Emergency Hospitals
  • Close to Local Medical Centres
Restaurants and Cafes
  • Close to Popular ones
  • Parks and Walking Trails for Recreation
Community Feel
  • You want it to be a nice place to live
We've done the homework and found those properties that meet in some cases all and in others most of the criteria throughout Australia... (and elsewhere)
If you are thinking of investing in property anywhere please give us a call.
Graeme Clark
1300 131099


Tuesday, 8 September 2015

Green light for SMSFs to get serious about property.


SMSFs have been giving the green-light to become serious property investors.

Fear, uncertainty and doubt (FUD) are what stops most of us from doing things, even though there are occasions where we know we need to do something.

Money to provide for our future is one such thing that we know we need to do something about, but many of us, put it off for too long because of FUD… or we are too busy.

Recently the Murray Financial Review commissioned by the Govt. created FUD around SMSFs because it proposed that self-managed super funds should be banned from borrowing to invest in property.

That proposal seem quite strange because borrowing to build wealth is an excellent way to maximise the growth on what, for most of us, is limited supply of surplus funds (the money left after paying taxes and living).

So smart investors only borrow to buy safe assets, and property is probably the safest.

But what they were saying was if you want to try to maximise your somewhat limited superannuation money, then you can’t.

Given that they don’t want to pay us a pension, that didn’t make sense.

In my opinion the original idea was that we didn’t want people taking gambles with their superannuation. They wanted to make sure people only invested in safe assets… like the stock market. (You would have to wonder how that is working out for most people!)

It made no sense to me; property has been a consistent performer over the years particularly long term, which your superannuation is. Property is about as safe as you can get, hence the expression ‘safe as houses’.

So that was the recommendation. But now the government has rejected that idea.

Last week, Assistant-Treasurer Josh Frydenburg said:

“In the final report of the financial system inquiry, which the government commissioned David Murray to prepare, he recommended a complete ban on limited recourse borrowing arrangements in SMSFs.

“I want to emphasise that we have been considering this recommendation very carefully but flag that we want to make sure the approach we take is proportionate to the risks that have been identified.”

I find that just about everything he says needs a translation, so most agree that translated means “The ban was a sledge hammer to crack a nut so it’s not going to happen”.

We know from survey data that people with SMSFs have a keen interest in property, both residential and commercial. So now the door is open for them to get serious.
Obviously we’d like to help.

So this is a good news story. SMSFs are on train to be a major force in Australian property.

A WORD OF WARNING THOUGH: Beware of the self-proclaimed SMSF experts/specialists. From what I have seen of them some are ex-Financial Planners that have seen an opportunity to make a quick buck from this seemingly complicated financial structure. Generally they charge an absolute premium for providing no better advice than you can get from your Accountant or existing Financial Planner. It’s not that complicated, the rules while different are not hard to learn.

The idea of an SMSF is to make money for your future, not to give it to someone else for their future.

If you would like to know more please feel free to give us a call…

1300 131099