Gen Y: five things you need to know about getting into the property market

May 8, 2012 admin No comments

A recent survey has found that most Gen Ys in Australia want to have an investment property before they own their first home.

This research got us thinking about the top five things Gen Ys needs to know about the property investment market.

  • Use discretional income to invest in property – Lots of young Australians are on excellent salaries for their age compared to the previous generation. So, a couple of options are to eat out less, including less takeaways, or reduce daily expenses (e.g. car parking), or cut back on alcohol. Put the money you save from reducing this expenditure and put it towards an investment property.
  • Rent inner city and select investment properties in cheaper areas – Living close to where the action is a great option if you want to rent. From an investment perspective, look for properties in suburbs that are cheaper (ie out of the city) that will have a good rental yield and have growth potential.
  • Is buying with friends or family an option? Many people are choosing to invest in properties together with friends or family. This is a good option if you really want to get into the market and don’t have enough money to invest on your own. But, be warned that you’ll need strategies in place if the investment doesn’t work out so you don’t ruin friendships.
  • Do you qualify for any state or federal government grants? There’s the Federal Government’s $7000 first-home buyer grant, but there may also be some state-based schemes to assist you in making the move to invest and buy your first property.
  • Start saving now – There’s the obvious bank accounts with various rates of interest and incentives. The Federal Government also has a first-home saver account The Government pays 17% extra for the first $5500 contributed each year. However, the account must remain open for four years to qualify.

If you’d like further information on investing in property, please contact ParkTrent today on 1800 652 224, or email us at contact@parktrent.com.au.

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Pre paying interest on your rental property

April 30, 2012 admin No comments

The ability to pre-pay interest is appealing to property investors, rather than owner-occupiers, because only investors are able to claim a tax deduction for interest payments on their loan as well as other costs. Paying your interest in advance can have more than one benefit for investment loans.

By paying 12 months interest in advance, investors can claim the deduction this financial year, rather than wait 12 months for the tax benefit.

The strategy is especially appealing whenever tax cuts are scheduled for an upcoming financial year. It makes sense to bring forward deductions to a year when you are liable to pay more tax. So, whenever tax cuts are scheduled to be introduced on 1 July, make sure that you consider prepaying interest in June for the upcoming financial year.

You should also consider prepaying interest in one financial year if you expect to receive less income in the following financial year.

But the ability to pre-pay interest is only suited to individuals with the cash flow to take advantage of the opportunity, not just this year, but each year for the term of the loan.

Twelve months’ interest on a $250,000 loan would amount to $17,850. This is a significant amount of cash to have on hand and while the full amount is tax deductible, the amount you get back is determined by your marginal rate. Hence, someone on the top rate of 46.5 per cent who paid $17,850 interest in advance and claimed it as a tax deduction would get back $8300 through the tax system but still pay out $9550.

Investors need to ask themselves if the strategy will be ongoing and for how long. If you think rates are likely to go up in the next 12 months and you know you will have the ability to pre-pay interest on an annual basis for a number of years, it may pay to fix your rate for longer.

Borrowers can make arrangements with the lender to have the loan drawn down in time to allow pre-payment of interest by June 30.

What expenses you can claim

If you own an investment property, you may be able to claim a tax deduction for a raft of expenses in addition to the interest on your loan.

The Australian Taxation Office advises on its website that you can claim expenses relating to your rental property but only for the period your property was rented or available for rent – for example, advertised for rent. A very handy ATO guide is Rental Properties Guide

When landlords claim body corporate fees, they should also make sure they don’t include contributions to sinking funds, which can’t be claimed as a deduction. Items such as fridges and washing machines can’t be claimed as an upfront deduction but must be depreciated over a number of years. Depreciation can be claimed for items such as freestanding furniture, whitegoods and TV. You can claim the full amount of items costing $300 or less in year one.

You may also be able to claim a capital works deduction for construction costs such as improvements to driveways, fences and retaining walls.

Expenses could include:

  • advertising for tenants
  • bank charges
  • body corporate fees
  • borrowing expenses
  • council rates
  • decline in value of depreciating assets
  • gardening and lawn mowing
  • insurance
  • land tax
  • pest control
  • property agent fees or commissions
  • repairs and maintenance
  • stationery
  • telephone
  • water charges, and
  • travel undertaken to inspect the property or to collect the rent.

Additionally, if part of your property is used to earn rent, you can claim expenses relating to that part only. You will need to work out a reasonable basis to apportion the claim. For example:

If a two-storey private property leased the second floor, representing 30% of the total floor area, and allowed use of the laundry (an area that takes up 10% of the total floor area of the house), the owner can claim 35% of the expenses for the property; this equates to 30% (second story), and 1/2 of 10% (laundry) = 35%.

Taxation Ruling IT 2167 – Rental properties will give you more details about apportionment. [source: www.ato.gov.au]

If you’d like further information on investing in property, please contact ParkTrent today on 1800 652 224, or email us at contact@parktrent.com.au.

Credit to Latrobe Financial for some of the information in this blog

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Property Investment Using Home Equity Loan

April 23, 2012 admin No comments

Investing in the real estate industry can create long term wealth for many individuals. Without a doubt, property investments can be a lucrative business when managed properly. However, many would-be investors cannot shoulder the burden of two separate mortgages from two different properties. The good news is that, a home equity loan is there to make both ends meet.

A home equity loan allows homeowners to borrow against the equity in their existing home so they can finance a new property investment. Equity refers to the amount a homeowner has already paid on the existing property. This money will be used as collateral for the second mortgage. The amount of money granted from your equity will largely depend on the current market value of your existing property.

Refinancing a home can be a great investment option that bears fruit in the future. However, there are also dangers associated to the investment. Investment in property using a home equity loan is a serious decision, which shouldn’t be taken lightly. Remember, you will be responsible for two loans, with each using the home as collateral. If you fail to make regular payments on either loan, then you will definitely be putting your property at risk. Unforeseen financial situations like sudden loss of a job, illness or death can possibly make you and your family homeless. Another disadvantage of refinancing the first mortgage is that it generates additional interest that you wouldn’t want to shoulder.

Property investments can be a good income generator in the real estate industry. But before anything else, make sure to seriously discuss with your financial advisor about your other viable financing options. Study the local market and be certain with your employment status, paying capabilities and set up appropriate insurances so you can avoid risking your family’s shelter. Remember, if you cannot pay the loan, the lender has the right to start foreclosure.

Feel free to contact ParkTrent to find out how our team can help you.

 

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ParkTrent’s How To Guide: Getting your property ready for the next tenant

April 16, 2012 admin No comments

Rental properties can be a steady income generator that makes easy money without requiring too much work on your part. However, you will also have responsibilities of making (and keeping) your properties habitable to your tenants. In fact, you may be required by law to fix certain problems before allowing any tenant to move in. This is the first in ParkTrent’s new How to Guide for Property Investors. Read on to learn how you can make your property rent-ready between tenants.

Although this seems like an obvious statement, upon tenant move out, make sure to examine the dwelling and take note of everything that requires repairing. Don’t overlook minor problems like slightly grubby walls, worn carpets or loose fixtures so that you can prevent major repairs in the future. Most minor problems are easily fixed without breaking the bank, however when they are ignored, more often than not, they turn into big problems that can cost. Also remember that most tenants don’t report minor problems unless they find these problems really annoying during their tenancy, so the onus is truly on you to carefully inspect your property once tenants are out.

Once your property has been vacated, see to it that even the smallest issues are attended before the new tenant moves in. You need to clean your property well to ensure that your rent-ready property is clean and fresh – it also sets a standard for the new tenant. Pay special attention to the flooring and walls as pet stains, mold and mildew are considered health hazards that may endanger your new tenant. Get rid of the things that were left behind by the previous occupant. Check on the conditions of the lights, smoke detectors, door knobs, exhaust vents, walls, window panes, and many other items that can otherwise put the safety and security of the potential tenant at risk. If your budget will allow, take the vacancy as an opportunity to update your property. Spray for pests, add a fresh coat of pain, buy new fittings, or even perhaps do major renovation –  especially in the kitchen and the bathroom areas if they are looking a bit dated.

Of course if all of this sounds like too much effort, you can always hire a property manager to take care of this for you. Feel free to contact ParkTrent to find out how our team can help you.

Many businessmen are making their fortune by building a portfolio of rented properties. Make use of the above tips so you can have your fair share of the multi-million dollar real estate industry.

 

 

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Reasons to Attend Property Investment Seminar

April 10, 2012 admin No comments

There are many ways that you can invest your hard earned money but the problem with most of these investment options is that you are often pushed to choose between high risk and low returns. If you need some sort of professional guidance in the real estate business, then we highly recommend that you take some time to attend a property investment seminar.

There are many advantages of attending a property investment seminar, foremost, you will learn the ins and outs of the property investments. Attending the seminar will help you understand the real estate business and learn how to develop a portfolio that will allow you to reap the rewards of property investing.

Free lectures are given by property experts and gurus who will walk you through the complicated world of the real estate market. By getting advice from these experts, you will be able to maximize your returns from your properties. You will also get some of those burning questions answered by these professionals. The seminars also cover tax laws, property appreciation or depreciation, financial plans, government incentives and many other cash flow options and benefits that are geared toward acquisition of property.

Attending an investment property seminar can sometimes give you an opportunity to meet property owners, experienced property investors as well as those new to the property market. If you are a property buyer, seminars are great opportunities to find properties at a much lower market price. Generally, property investment seminars will help you set the path to a low-risk property investment which consequently enables you to generate higher profits from your properties.

Are you planning to enter the real estate industry? Do you want some help with regards to your property investments? Want to avoid costly mistakes from bad investments? If then, you should attend a property investment seminar! ParkTrent regularly holds such seminars. For more information on when the next seminar in your area is, please visit http://www.parktrent.com.au/properties-group/property-investment-seminar/property-investment-seminar.aspx or call us on 1800 652 224.

Clue -> We have been holding our seminars for the last 17 years, with an average of 600 people attending each week.

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What to do this Easter and ANZAC Day

April 2, 2012 admin No comments

Easter’s a great time to take a sneaky break from the hectic start to the working year. It hits you like a sledgehammer when you realise the season is changing, we’re nearly into May and where on earth has the year gone?

Whether you’re away as a family or going to visit family, part of the fun is planning some activities that can really add some adventure and fun into your Easter holiday.

If you’re looking for theme parks and zoos in Australia, you simply cannot go past the Gold Coast for the best theme parks and the Sunshine Coast for zoos.

Zoos

Australia Zoo on the Sunshine Coast is definitely one of the biggest highlights in Queensland if you’re travelling with kids. The main attraction there are the crocs, although there’s also a significant sprinkling of koala bears, kangaroos, reptiles, and other animals native to Australia. If your child is looking for more interaction, or if you’re travelling with a smaller child who would like a milder share of spectacle and play, you should go to the Kiah Park in Gympie. There are also cruises in the area which allows you to view Australia’s water wilderness. The Caloundra Cruise which explores the Pelican Waters is a favourite.

Theme Parks

For the kids who are dedicated adrenalin junkies, they will lurrrve Queensland’s Gold Coast and their significant aray of extremely impressive theme parks. The major are almost next door neighbours, so you can stay anywhere on the strip and still find all of this theme parks accessible. There’s the outback spectacular, Movie world, Wet and Wild and Dreamworld in this precinct with Sea world a amongst the plush resorts at Southport.

Dreamworld, which is most known for its Big 6 Thrill Rides spans about 30 hectares and is a hit with bigger kids. Sea World is a fast favourite among smaller kids. They can watch live dolphin shows here, visit the Shark Bay, and frequent the Polar Bear Shores. There is also a new 4D theatre showing Planet SOS. This show orients kids about the necessity of saving the environment so that these precious creatures are protected. The Sea World is actually more than just a theme park. It’s also a clear reflection of Australia’s passion to save the environment and raise more eco-responsible citizens.

So whatever your choice – get out there – get yourself a multi park ticket and give the kids a thrill they’ll never forget.

Art and Craft

IF you’re really into the spirit of Easter, you could go prepared with some art and craft materials that are sure to satisfy any bored youngster – particularly if the weather turns.

Check out some of these great ideas at Kidspot.com .au. A lot of city councils will also run events activities that are free for the kids. Check out these sites for some inspiration for the kids and big kids too!

 

Events Queensland

my247.com.au

Everguide.com

Eventfinder.com.au

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Mistakes property investors should avoid

March 26, 2012 admin No comments

In life, you work hard in the hope that when the time comes you’ll have enough of a nest egg for you and your family to get you through the rest of their lives, comfortably.  A proven investment strategy and one that will yield good returns in the long terms is investing in the property market.  But for novices in the investment arena here are some mistakes that you should avoid when dabbling in property investments. This is what www.parktrent.com.au has to say about it.

1.  Letting your emotions dictate your purchases – Treat your purchase as a business venture.  You don’t buy property because it’s close to where you work.  You buy it because you see it as an investment and as such, you want it to earn for you.  If you want to earn profits from your business venture you will put in a good amount of time in research and planning before you can even begin to make a purchase.

2.  Letting your property’s value dwindle -– Property values decline when the environment it belongs to is underperforming.  You need to maintain your property to keep it on the upside.  Watch out for telltale signs around you that may lead to a decline in property values so you can avoid it.  Also, if you have rental properties, always check that you’re getting the right rental values in the market.  You need to keep your ear to the ground for news about how the property market is doing so you can adjust your financials accordingly.

3. Putting all your eggs in one basket – When your goal is to build a property investment portfolio, you need to manage all your properties with considerable effort.  It’s better to have a diverse property portfolio so you minimise your risk even if your investments are all in one industry.  Your properties can be used as leverage in future business decisions so it’s better to be flexible with the variety.

4. Being in it for the short term – Property investment is a long term exercise. Buying an investment property involves substantial upfront costs like stamp duty and legal fees, which alone can amount to several thousand dollars. Plus, when you sell the property, you’ll face other costs like the real estate agent’s selling commission, capital gains tax and sometimes advertising costs.  You should usually budget for around 5-7% of the property selling price as additional expenses.

In order for you to make a profit on the sale, the value of your investment property needs to grow by more than the value of these costs and the after tax costs associated with holding onto the property. That’s why you should probably regard property investment as a long term strategy and be prepared to hold onto it for at least five to ten years.  Sure, during periods of rapid market growth, you may be able to make a faster profit but this call for good research, good luck and good timing – something that can be hard to get right.

A sensible approach is to treat your investment property as part of your overall investment portfolio for the long term.

 

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Experienced Property Investors

March 20, 2012 admin No comments

Shanti and her husband Muru are experienced property investors with a portfolio of properties across Australia.  Shanti and Muru have been dealing with ParkTrent from the start of their investment journey, having first met Ron Cross in a coffee shop over ten years ago.

“Our property investment story started with a bang” says Shanti.  After attending a ParkTrent presentation in the ACT and being impressed with the opportunities offered by property investment, the family flew to Queensland to inspect property at the start of the boom in 2000.   Shanti explains that the ParkTrent seminar helped to give them the confidence to “get on the path to wealth creation”.

Shanti and Muru developed a good relationship with ParkTrent staff who were aware of the types of properties that would interest them.

“We were regularly updated on new property developments that could suit our requirements” says Muru.

In 2004, they purchased a property in Sandstone Point, 52km north of Brisbane in the Morton Bay Region.

“We always chose new properties as they provide the best tax advantage and a reliable income stream, which helps us maintain our current life style” says Shanti.  Shanti reports that over the years property investment has provided them with financial freedom to pursue the better things in life.

Muru and Shanti continued to re-invest their earnings into expanding their portfolio.  Their next investment property was in the ACT in 2007.  In 2009 they bought an apartment “off the plan” in the City of Melbourne.

If Muru and Shanti ever decide to sell one of their properties to realise capital gains, owning a diverse range of property in a number of geographical areas will allow them to choose the strongest market for the sale.

Shanti and Muru value the ParkTrent gala dinners which provide “first class entertainment”, as well as the opportunity to meet like-minded people and share property investment experiences.

“We have valued the support and advice from ParkTrent over the years and the encouragement we received from Ron Cross himself” says Muru.

 

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Queensland Property given an extension to the building boost

March 12, 2012 admin No comments

Property Investors in Queensland have been given a three month extension to access the $10,000 Building Boost.

The $140 million scheme was first introduced in August 2011 to stimulate the Queensland building industry. With over $100 million still available, the Queensland Treasury has agreed to extend the scheme for a further 3 months until April 2012.

The extension has been applauded by industry groups such as the Master Builders Association, The Urban Development Institute of Australia and the Real Estate Institute of Queensland. Queensland Treasurer, Andrew Fraser, said there has been increased uptake since the extension and applications for the grant now exceed 5,600.

The grant of $10,000 is available for the purchase of any property valued under $600,000. The Queensland Government also offers first home owners $7,000 and an increased transfer duty concession rate. This means first home buyers purchasing a property under $500,000 in Queensland don’t pay any stamp duty. Combining these grants gives a saving of over $17,000.

According to the latest Property Council-ANZ Property Industry Confidence Survey, the findings from 2,800 industry professionals across the nation give Queensland an above average confidence rating against other locations in Australia.

The Queensland economy is valued at $260 billion and growth for 2011-2012 is forecast at 5%. The Department of Employment, Economic Development and Innovation is forecasting business investment in Queensland to surge by 27.7% over the coming year and export volumes to grow at a decade high rate of 10%.

With a booming economy and a chronic undersupply of housing, Queensland property is set for strong rental yield and future capital appreciation. ParkTrent currently has a range of properties that would meet the criteria for the $10,000 Building Boost. Speak with a ParkTrent professional today to ensure you don’t miss the April deadline.

Call 1800 652 224 or email us via contact@parktrent.com.au

 

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Queensland enters mining boom: take advantage of property investment

March 5, 2012 admin No comments

Queensland is currently experiencing a mining boom. According to the Department of Education, Employment and Workplace Relations, mining will create 69,200 jobs over the next 5 years and ABS figures show 30 per cent of these will be in Queensland.

Queensland has expanded activities in the minerals and coal sectors and new Liquefied Natural Gas (LNG) ventures are adding to the boom. Australia has eight LNG mines under development and, according to Bank of America Corp, of the six new LNG ventures approved globally in 2011, five are Australian.

This means there will be thousands of workers requiring accommodation in the region. Figures from the Office of Economic and Statistical Research show more than half the mine workers in Central Queensland reside on the Capricorn Coast or in Rockhampton suggesting the Fly-In/Fly-Out and Drive-In / Drive-Out workforce is reaping huge pay packets at the mines and enjoying the idyllic lifestyle on the coast.

The Real Estate Institute of Queensland says mining activity has pushed median house prices up. Rental prices have also skyrocketed with a standard house in central Queensland attracting $1800 a week in rent. Property Investors in Queensland can also take advantage of the three month extension to access the $10,000 Building Boost incentrive.

Property investors are reaping capital gains and high rental yield by strategically securing property in this market. House and Land packages are currently available at beautiful Zilzie Bay on the Capricorn Coast. Located near Rockhampton, Zilzie Bay offers a wonderful lifestyle for families and an easy commute to the mines – all with the magnificent backdrop of Great Keppel Island.

To find out how you can take advantage of Queensland’s mining boom, Contact ParkTrent today by emailingcontact@parktrent.com.au or call 1800 652 224. We can also arrange for a property investment consultation with one of our Property Investment specialists, free of charge at a time that suits you.

 

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