There will always be someone who’s needs are greater than our own and when any one of us is in a position of wealth than giving back becomes a responsibility. Australians are great givers, donations have poured in for aid relief to those devastated by any kind of disaster or tradgedy from all across the nation but I am talking about more than that. I am suggesting more than just donating to charity. I am talking about being all you can be.

Have you ever entertained the idea of creating a charity, a homeless shelter or a foundation for health research. The opportunities and possibilities are endless, one wealthy Australian property investor I have reaseached recently created a home for troubled teens unable to continue living with their parents.

Another wealthy Australian Jamie McIntyre was an average kid that grew up on a farm in the country he is now a gifted educator. Jamie travels the country teaching other Australians how to create wealth and then to give some of it back. Being all you can be is about digging deep into your soul, it’s about doing what you need to do in order to succeed, it’s about taking that success one step further and creating an amazing legacy to leave behind.

It is true that we can all make a difference and even making a small difference should not be underestimated, there will always be a ripple effect. But just imagine for a while that you could make a big difference. What would it be? What is it that moves you? In what way will you be all you can be?

Have a grateful day

Teresa and the Team at

AustraliaWealth.com.au

Is property still a valuable source of financial security? Does it still offer the same rewards as it has in the past? Is it a viable way to create wealth in our current economy?

Yes, property is still looking good. Australia is still struggling to keep up with it’s population growth, there are still not enough properties to go around, this is a plus for property investors. Tighter lending criteria in the banking industry is another plus if you are considering using property investment for wealth creation.

The housing market runs on a 7-10 year cycle with many properties doubling in value during this time, so be prepared to wait, using a buy and hold strategy. Taking advantage of increasing equity over that time (by buying more properties) can assist you in building a healthy property portfolio that will help fund your retirement. Learn as much as you can about the property market and the area you wish to invest in, study the various strategies open to you and find the one that suits you best. Read books, attend seminars or look into various homestudy programs any or all of these will assist you in making the most out of your chosen investment strategy.

Some questions to consider and answer when thinking about property investment in 2010…

• Is negative or positive gearing better for you?
• What are the benefits of an interest only loan?
• What is the best way to purchase the property, in your name, in a trust or in your spouse’s name?
• What are the investors important checklist criteria when choosing a property?
• What do renters want?

These are just some of the points to consider, the answers may vary depending on your situation and your goals. Getting expert advice is always a good idea. Property is still a worthwhile investment in 2010 providing you do your research, know what to look for and are making an educated informed decision.

Have an Impressive Day

Teresa and the Team at

AustraliaWealth.com.au

1. Select properties within the $250,000 to $500,000 price range.

Properties priced below $250,000 will either be too small, not have the desired quality finishes or not be in the best possible area. If the property is over $500,000 it moves out of an affordable price range for majority of renters

2. Select properties within sought after ‘lifestyle’ locations that will attract consistent rental demand by quality tenants.

Choose established properties in established residential areas.

3. Select properties in areas within 15kms of the CBD but not the CBD or some CBD fringe areas.

4. Select properties within suburbs and streets where limited land is available.

If there is limited land available for further development you will have less competition for tenants.Property values will increase at a greater rate. Limited land also means that the area is in demand – people want to live there.

5. Select properties in areas with proven capital growth over the past 5 years.

6. Select properties close to the water  eg beaches, oceans and rivers.

7. Select properties in suburbs which have a high rental demand.

First call and then visit the top agents in the area and check their rental lists to assess the rental demand, eg. check how many properties are on their ‘For Lease’ list.Talk to the agents rental manager in regard to rental growth in the area.

8. Select properties in areas which have affluent tenants with high disposable income.

9. Select properties close to public transport.

10. Select properties which are in demand from corporate tenants.

Corporate tenants pay more money and are very secure. You can call Relocation Agencies (listed in the Yellow Pages) to find out what suburbs coporate tenants prefer.

11. Select properties close to educational facilities:universities, major public and private schools.

12. Select properties close to major sporting, dining and entertainment precincts.

Eating out is a popular pastime, sporting and entertainment are high on renters criteria when choosing where they will rent.

13. Select properties which have land content.

The general rule is that land appreciates in value and buildings depreciate. This rule is challenged in some areas where high rise apartments command higher prices than some houses in the same area because of the views they offer.

14. Select townhouse style properties.

Townhouses are often preferred over apartments by renters because they are more house like yet still low maintenance. They also offer a higher degree of privacy and security and are cheaper in body corporate fees.

15. Select properties that offer high depreciation and taxation benefits.

If there is no depreciation schedule with a property you are considering purchasing you can engage a quantity surveyor to Perform a Depreciation Schedule Analysis on the property. The higher the depreciation allowance for the property the greater the tax benefit which equals less cost to you in property maintenance.

16. Select properties within projects whose income is not based on short term or holiday letting.

This refers to the holiday based investment where your income is really dependant on the tenant, with little capital growth invovlved. These are within complexes where you are also competing for tenants with other similar properties. This lowers the demand for your property and lower demand equals lower returns.

17. Select properties that are located within smaller low rise boutique style properties.

Buildings with less than 35 units. Larger complexes invite many problems as you cannot control what other owners sell their properties for. If a property is sold at a lower price for personal reason’s the lower price will automatically be transferred to the other units.

18. Selecting a property where the price of the property offers at least a 5% gross rental return based on the long term rental guarantee the real estate agent is willing to provide.

Ask the agent to provide you with a rental price which they are absolutely sure is achievable in the worst case scenario. If the promised and agreed rental is not achieved by the rental agent after two weeks of trying to lease the property, the agent will receive no ‘marketing money’ and will have to make up the difference between the rental guarantee and the actual rental price of the property.

19. Select properties within projects which are guaranteed to be built and completed.

Even large developers can run into problems and decide not to proceed with a project. Check what guarantees are in place before signing any contracts.

20. Do not purchase off-the-plan property which is being sold ’subject to permit’.

21. Select properties which have 3 bedrooms to increase rental income.

Only purchase properties that contain 3 bedrooms or a minimum of 2 bedrooms. One of your goals should be to increase the rental price of your property every year as much as possible. Achieving the highest possible rental returns is far easier with a three bedroom property.

You may be able to overlook some of the above criteria if the property is below market value due to vendor circumstances, but you still need to be able to achieve capital growth and good rental returns.

Have an enthusiastic day

Teresa and the Team at

AustraliaWealth.com.au

Reference: Jamie McIntyre, What I Didn’t Learn at School But Wish I Had, 2002 pp 218-223.

There is a simple formula that is used by many successful investors and has been for as long as property has been available. The simple formula is to buy income producing property that is financed appropriately to achieve maximum tax benefits while you are working. As the value in the property rises and your cash flow increases you are able to refinance, puchase another property and increase your net worth.

Many property investors use a buy and hold strategy to create wealth over time reinvesting the equity to create more wealth. With long term property investment, initial price, interest rates and timing are less significant as time is on your side.

If you want to be successful in property investing it’s a good idea to seek advice from experienced successful property investors. Be responsible for your own education there is plenty of information available.

One strategy to use is to first buy your own home, be patient and allow some equity to grow as well as paying as much as you possibly can onto your mortgage.

Then use the equity in your home to secure an investment property. The best type of loan here is usually a fixed rate paying interest only but do your research first to see if this will be your best option. Look for a median-priced property in a good location and in a region that has long term sustainable growth (large town or city). Make sure the property will meet your needs as well as a tenants.

As cash flow and values continue to increase you can buy more properties using the above method and build a property portfolio. Budget carefully, make sure you know how to utilise all the tax benefits available to you, set reasonable rents and maintain your properties.

When you are ready to retire you are then in a position to sell one or two properties to reduce or pay off your debt and have rental income to continue to maintain the properties and provide you with retirement income.

Fear can stop you making the most of your life but knowledge acquired and then used can help you create wealth and a greater lifestyle for your family. It is best to understand that wealth does not happen overnight but with careful planning and commitment true solid wealth can be achieved. Take responsibilty to learn all that you can especially from those who have already achieved what you desire.

Have a productive day

Teresa and the Team at

AustraliaWealth.com.au

Some facts associated with property investing are outlined below,

• The rate of new dwellings being built is increasing - an analysis conducted by the Commonwealth Treasury estimated that the demand for housing will increase to 200,000 per annum by 2010 while new dwellings are expected to reach only 150,000 to 160,000. Add to that a shortage of available land and the result is an imbalance between supply and demand that can only result in Australian property values increasing.
• Affordability is always an issue.                                                                       When is the right time to enter the market?                                                   The answer to that is always, ‘Now is as good a time as any’. What you must do though is look at ways to organise your finances and understand what way is going to work best for you.

The Government has extended first home owners grant assistance into the first half of 2010 to encourage entry into the property market so if your in a position to take advantage of this. Another option you may consider is to buy and rent. This strategy means you buy in an area you can afford with the intention to rent the property out, the property has the potential for capital gain over time and can often offer a high rental return. Meanwhile you rent in an area that suits you for location and work, with the freedom to relocate as desired. The idea is to get into the market now and stay there for the long term. If, as a buyer you can combine solid research with a medium to long term outlook you will find many opportunities offering good capital growth.

So don’t get discouraged by listening to reports of economic turmoil a few wise men in the past have created massive wealth in similar times, just be open to finding the right oportunity for you.

Power Thought

I am open to the opportunities that are always around me.

Repeat this thought often.

Teresa and the Team at

AustraliaWealth.com.au

Property Investment Strategies

• Buy a second property, then another
• Upgrading your home every few years
• Renovating
• Redeveloping
• Paying off your mortgage quickly
• Buy commercial property
• Joint venture property purchases

Determine what type of strategy you are more comfortable with as they all involve different amounts of commitment and investment. A combination of strategies over time could provide you with variable returns that balance out well. Your choices will of course be in relation to your circumstances and depend on whether you have more time or money available, whether you are after capital growth or cash flow.

One of the common forms of investing for many Australians is using the equity in their current home to buy a second property, then once the equity is sufficient in the second property, buying a third. Income can be obtained through rent which will also assist in paying off the mortgage as well as providing taxation benefits. It is possible to build up a substantial real estate portfolio using this method.

If buying another property seems daunting or out of reach investing in your own home could still give you financial benefits and get you started. Making any amount of extra payments on your mortgage will reduce the amount of interest you have to pay and you will pay your loan off a lot sooner. Loan products can vary quite a bit though, so check yours thoroughly and make sure you understand the terms fully.The added benefit here is that you will be creating more equity which can be a great asset to you in creating wealth. Many Australians have become financially independent through property investing and it is possible for you too.

Power Thought

I am creating wealth in my life.

Repeat this to yourself often

Have a very Happy Day

Cheers

Teresa and the Team at

AustraliaWealth.com.au