General Tips
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1.
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Don’t buy with your emotions.
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2.
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Surround yourself with like minded people. Property investment is not for everybody.
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3.
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Hanging with the wrong crowd could talk you out of your passion to succeed in real
estate, and ultimately stagnate your opportunity to wealth.
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4.
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Get advice from people who are fellow investors and learn from they success &
trialsome experiences.
The best way is to join social groups like Platinum Property Investment Club.
We have bi-monthly meetings of approx 1 hour with guest speakers that provide informations
that can help catapult you in your investment strategies
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Finance
Generally, when looking for an investment property, look for an area that:
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1.
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Has consistently achieved strong capital growth
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2.
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Has high rental population (for example government sites or universities)
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3.
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Has easy access to amenities such as shopping, schools, transport and hospitals.
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4.
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Is reasonably close to major centres (city or larger towns if regional areas)
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One or more of these factors make the property more attractive to renters (and lenders
in terms of securing the loan against the property). Based on the current interest
rates and property market, positively geared property investment may also be a possibility.
Lenders generally require a stable employment history, proof of savings and no defaults
on credit history but there are exceptions to these rules with different lenders.
Property Manager
Tips for Landlords
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1.
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Do your homework: Research = Results. This is true in all aspects of property investing
and leaves you with the assurance that you have the best that you can to ensure
a good return on your investment.
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2.
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When seeking a property management company, remember that the company that offers
the cheapest rate and promises the highest rent may not always be the best choice.
Ask for a list of inclusions and services that are included in their management
fees. Also request evidence that supports their appraisal and be sure that they
are taking your personal circumstances into consideration.
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3.
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Stay on top of maintenance and repairs. A well maintained property is much more
appealing to potential tenants than a property that is run down and in need of repairs.
This also affects how long and how often your property will be vacant.
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4.
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Adding extra features to the property benefits both you and the tenant.
Extra features such as air conditioning, ceiling fans, dishwashers, garage remote
controls, etc can be used as leverage when it comes time to review the rental amount
on your property.
Make sure you retain your invoices to get the tax benefits from your purchases.
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Tax
Owning a rental property can provide significant tax benefits mainly by the use
of Negative Gearing.
While the eventual ultimate aim for most investors is to have a portfolio of positively
geared properties, initially it is through negative gearing and the associated tax
benefits that investors are able to purchase real estate at minimal cost to themselves.
The difference between the amount of rental income from your property and the expenses
related to the property are (assuming there is a loss) tax deductible.
There is also provision for non-cash expenses - for example depreciation on items
such as light fittings, carpet, building costs, etc, which may increase your available
deductions. These non-cash deductions help increase your loss, and consequently
increase your tax benefit.
Calculation of depreciable items on your property is very specialised, and Iseppi
& Co Accountants recommend that the services of a Quantity Surveyor be used
to ensure you maximise your depreciation deductions.
In order to maximise your tax benefits and minimise your out of pocket costs, it
is essential to keep all receipts for tax deductible costs for your property.
Some examples of deductions are as follows:
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1.
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Advertising expenses – looking for a tenant
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2.
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Agents Fees/Commissions – for managing the property and collecting rent
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3.
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Gardening/Lawn mowing
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4.
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Insurance Premiums – building, fire, burglary, public liability, loss of rent
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5.
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Interest expenses on loan
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6.
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Pest Control
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7.
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Postage and Stationery
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8.
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Travel Expenses – for inspections, repairs, rent collection etc.
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9.
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Quantity surveyor report (cost estimate) – for determining construction costs and
depreciable asset costs for building write-off and depreciation purposes
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10.
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Rates (Council and Water)
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11.
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Repairs and maintenance (excluding initial repairs)
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12.
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Swimming pool expenses
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13.
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Telephone calls and rental (related to dealing with real estate agents, tenants,
repair service providers, and other rental property matters
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It is important to contact your accountant prior to purchasing a property to ensure
you setup your investment in the most tax effective way because once the contract
is signed there is no going back.
We are happy to help with any Rental Property queries you may have, and will work
with you to ensure you are getting the full tax benefit from your property.
Builder
Building a new home can seem daunting but really it is very easy if you select the
right builder. Selecting the right block of land can make a big difference.
Below are a few tips when selecting a block of land:
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1.
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Choose a block that is near level. Select a block of conventional shape with a wide
frontage.
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2.
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Consider aspect
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3.
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Consider restrictive building covenants.
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4.
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When constructing an investment property, don’t let emotion take control. Remember
to only build what the rental market is looking for.
This will then allow you to build a home that will always be in demand and increase
the capital value for years to come.
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5.
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Be aware of the extra site cost involved ie; extra footings, extra slab, concrete
pumping etc. Make sure all these are included in the contract.
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6.
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Allow up to 3-4 months building time. Settlement takes place approx 2 weeks after
registration.
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7.
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Read the inclusions in the contract.
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