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Property Investing

Property Investing: You’re now an Investor and a Landlord

Posted by Emma Herbert on 8 November, 2016 2:23 pm

When it comes to property investing, there are many things to consider. Something that is often initially overlooked is the fact that as an investor, you’re also becoming a landlord. You’ll want to be renting out that new property to be servicing your mortgage and that in itself leads to a whole new kettle of fish for you to consider BEFORE purchasing that first investment.

Now, before you start thinking we’re advocating managing your own properties, slow down. It doesn’t matter whether you look after the day to day running of the property yourself or engage a property manager, these are issues to think about before you even sign the contract.

The Key Investor/Landlord Considerations

New VS Old

Many investors start with the idea of purchasing a cheaper investment property which generally equates to an older property. This may be driven from an emotional standpoint of “I don’t want my tenants to have a better home than me” or simply a financial one. Either way, this can lead to increased maintenance costs, limited depreciation opportunities (more on this below) and, last but not least, lower quality tenants. You want tenants that will look after your property, so choose a property that will attract the right sorts. The cost of tenants not paying rent or having to be evicted can exceed their bonds, leaving you out of pocket and rueing your earlier decisions.

How much is enough?

Rents are a difficult thing to balance. Everyone realises that if rent is too low your investment will quickly become a liability. Something often overlooked is that higher rents can lead to vacancies which actually do more harm than good in the long term. For instance, with the current weak rental market, holding an existing tenant is pure gold. Even a rental hike of $10 per week could cause them to look elsewhere, forcing you to chase new tenants. If you’re renting at $400 per week and it’s vacant for only two, that’s $800 lost for a gain of only $520 over a year. Yep, the math doesn’t lie. So use your head, use your contacts, use any information available to you to find the right balance.


If you don’t know what depreciation is, then you’re in for a treat. Even if you do, knowing and maximising are two separate things. Depreciation in its simplest form is a way to reduce your tax based on the reducing value of items within your property. This is most pertinent in brand new homes, where it’s filled with brand new things, each of which has dropped in value as soon as it left the showroom floor. Hiring a quantity surveyor to identify these items could just be the best money you ever spend, as the deductions continue for a number of years, providing long term benefits.

Use your Property Manager

If you’re not running rentals as a business yourself, then you probably don’t have time to deal with an investment portfolio of tenants and will have engaged a property manager. That’s great, especially when you start to utilise them to the max. A good property manager can and will incorporate your bills and rates into the service, at no extra charge. They’ll pay these straight from the rent, keeping excellent records that you (or your accountant) will be most thankful for come tax time. Remember, they’re more than just rent collectors.

As you can see, there’s so much more to investing than just buying a bargain. That’s why it’s important to get the right advice. At Australian Property Panel, we’re here to help, stepping you through the process from start to finish. And finish is not just the purchase of a property, but the creation of a property portfolio for you to enjoy the life you want. So why not come along to one of our free seminars, or simply get in touch with one of our friendly advisers now.

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Owning an Investment Property can be cheaper than you think

Posted by Andrew Jackson on 16 September, 2016 3:27 pm

Owning an investment property can be far more affordable than you think, particularly when you claim all of the tax deductions available. To explain how claiming these deductions can assist, let’s examine two average Australian taxpayers:

Bill who feels he can’t afford an investment property and Kate who owns one investment property. The Australian Taxation Office allows income producing property owners to claim a number of deductions for expenses involved in holding a property. These would include property management fees, rates, interest, repairs and maintenance. Investors are also entitled to a non-cash deduction for the wear and tear on the structure of the building and the fixtures and fittings within the property over time. This deduction is known as property depreciation.

Kate VS Bill.

Kate earns the same salary as Bill, however she has purchased a three bedroom rental property for $600,000 just over one year ago. Her property is rented at $545 per week, a total rental income of $28,340 per annum. The income earned from Kate’s investment property is also taxable, therefore her total combined income equals $113,340.

Kate is also able to claim deductions for expenses involved in holding the property, such as management fees, insurance, rates, interest, repairs and maintenance. These expenses for a typical three bedroom property would amount to around $39,067. Kate also obtained a tax depreciation schedule from BMT which showed she could claim an extra $14,200 in depreciation deductions in the first nancial year.

The results are in…

From the picture you can see Bill takes home $63,293 income after paying $20,707 in taxes. Kate earns the same take home wage however her income-producing property entitles her to claim $53,267 in deductible expenses including depreciation. This further reduces her taxable income to just $59,073 making her income tax payable $11,814. By maximising the property deductions and claiming depreciation, Kate’s property is costing $35 per week to own after tax.

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value of knowledge

The Value of Knowledge

Posted by Grant Orr on 9 August, 2016 12:36 am

No matter what circumstances information is valuable, worthwhile and normally accessible.

Ensuring you are gaining “Value” from the information you have been given is generally measured or indicated through receiving more than the effort you put in. Within the residential investment property market it could also mean obtaining “confidence in your future”.

Information can be measured in terms of what it can actually do for you. You can purchase books to gain knowledge but it is unlikely you can be educated from the shelf. Great information which educates you and gives you sound knowledge is intangible and should be individual to you, that is, the solutions should be designed to fit your needs and outcomes.

Knowledge can be difficult to appreciate or determine its true value or worth before you actually receive it; the long term strategies of property investment may take
a while. This then tends to result in a leap of faith, in some opinions, yet if you look at it logically, if the information is based on a criteria and logical approach is it that much of a leap? If there is a recipe for a more financially secure future, you’d probably be first in line to pay for it, particularly in times when the market could be volatile.

The confidence of someone who obtains knowledge versus someone who hasn’t can highlight the difference between the financial assets or property portfolio held and presents clear anecdotal evidence of how educated clients view their current and future financial positions.

Purchasing property is one of the largest and most expensive investments generally made. No one has a crystal ball and to ensure that as much risk is mitigated as possible it should be thoroughly researched, analysed and critically evaluated.

The questions we most often hear from people about their financial future are:

  1. Will I have enough money in the future to do what I want?
  2. Am I investing in the right place?
  3. Can I reduce my tax?
  4. What are my options when things change?
  5. How can I keep an eye on my investment property?

There are always different challenges, not only in building a property portfolio but in life itself. Being prepared for those challenges, understanding them and having a core base to support you along the way assists in giving you peace of mind, even if it is through knowing you have support when required.

When we wrap it all up, what outcomes do we aim to achieve or would you expect?

  • Emotional Value – enable you to make a well informed decision about your future
  • Financial Value – through Capital Growth, Rental Returns and Tax Reductions
  • Practical Value – making it simple, following through and saving time
  • Intrinsic Value – facilitating and project managing through skills and knowledge

There is only one thing we can generally predict “You do nothing you will achieve nothing”.

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Brisbane investing safe bet

Brisbane is a safe bet

Posted by Peter Spencer on 2 August, 2016 3:41 pm

Investors who are speculating on big capital gains in Sydney and Melbourne look set to be cruelly disappointed – but Brisbane is a safe bet.

BIS Shrapnel believes that house prices in Australia’s two biggest cities will experience limited growth between now and June 2018, while unit prices will actually go backwards.

Sydney’s median house price is forecast to rise 2.1 per cent to $980,000, while the median unit price is forecast to fall 0.7 per cent to $670,000.

Melbourne house prices are expected to climb 3.8 per cent to $680,000, while unit prices are expected to decline 4.0 per cent to $480,000.

However, the picture is different in Brisbane, where house prices are tipped to rise 13.5 per cent to $590,000 and unit prices are tipped to rise 5.7 per cent to $460,000.

Hobart, Darwin and Adelaide are forecast to experience increases in house prices and decreases in unit prices. Perth and Canberra are forecast to experience decreases in both categories.

The Hobart forecasts show house prices rising 4.1 per cent to $380,000 and unit prices falling 1.8 per cent to $280,000.

The Darwin forecasts show house prices rising 2.7 per cent to $575,000 and unit prices falling 2.5 per cent to $395,000.

Adelaide house prices are forecast to grow 1.1 per cent to $455,000, while unit prices are forecast to drop 1.5 per cent to $335,000.

Perth house prices are forecast to decline 2.6 per cent to $565,000 and unit prices are expected to decline 3.4 per cent to $425,000.

Canberra house prices are forecast to decline 1.8 per cent to $540,000 and unit prices are expected to decline 4.1 per cent to $465,000.


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