Why Invest in Property
One of the main advantages is the ability to use a relatively small amount of your own cash to control an investment of much greater value – usually at least 5 times the value of your own equity in the property.
Property may not appreciate as quickly as listed shares do sometimes, but there is underlying security and comfort in the physical bricks and mortar and the prices of property are less volatile.
We can assist property investors with a wide range of services.
Ownership Structuring Advice
Do you know the best way for you to own the property?
Should it be owned by the higher income earner to take advantage of negative gearing tax concessions, or by the lower income earner to minimise future capital gains tax liability?
Should it be owned jointly? If so, should you own it as joint tenants or as tenants in common?
Would you be better off owning a property through a self-managed superannuation fund?
We can assess your circumstances and objectives, and assist you choose the ownership structure that is right for you.
Finance Structuring Advice
The way your mortgages are structured can have a big impact on how soon you can invest in additional rental properties and the extent of any tax deductions available in the future.
- Should your loans be interest only or reducing?
- Would a line of credit loan be better? What are the pitfalls?
- Will fixed interest rate, variable rate or split rate be the best option?
- Should you ask for a redraw or offset facility?
Let us help you structure your finances in the best way for your needs and arrange the right finance for you. Getting the finance structure right will help make getting your second (or subsequent) investment properties easier.
Income Tax PAYG Withholding Variations
If you acquire a negatively geared rental property, and expect to receive a tax refund at the end of the year as a result, it is possible to receive the benefit of the tax refund much sooner than waiting for your tax return to be processed and refund received.
We can obtain approval from the Australian Taxation Office on your behalf to allow your employer to reduce the amount of tax they withhold from your pay each week/fortnight/month. Getting your tax refund sooner can assist with the cashflow needs of holding a rental property.
The capital cost of the building structure itself is written off over a 40-year period, and the cost of whitegoods, floor coverings, blinds and other non-structural items are claimed over a much shorter period.
Changes to the tax laws from 1 July 2017 mean that depreciation of furniture & fittings cannot be claimed unless you are the first owner of the asset, or the property was deriving rental income prior to 1 July 2017.
A depreciation report prepared by a quantity surveyor is required to establish the cost of the items which may be claimed as a tax deduction. Of course, the cost of the depreciation report itself is tax deductible in the year of purchase.
Property Investment Analysis
Rental income and taxation benefits can help you with the costs of holding a property investment.
Using specialist Property Investment Analysis software, we can model potential returns from an investment property.
Property Professional Referral Service
You’ve heard it a thousand times before and you’ll hear it a thousand times again: location, location, location. When it comes to property investment, they say nothing is more important than finding the right area or suburb for your purchase.
What is it that makes one location better than another for property investment? What are the key drivers that will ensure strong rental demand and what are the catalysts that will generate good capital growth? What type of property gives you the best tax incentives and what type of property provides the best exit strategy when it is time to sell?
When buying an investment property, it is essential you consider the needs of your prospective tenants. You should be looking for properties close to schools, transport, shopping, hospitals and entertainment facilities, and there needs to be good employment opportunities in the area. The best investment opportunities are rarely in your own suburb. But knowing where to buy is only one key factor in successful property investing.
We have found some people are happy to do their own research when it comes to property investment, but there are other who want to invest in property but never get around to it as they don’t have the time or skills to do the research themselves, lack confidence in choosing their investment, or may benefit by having a professional choose the property for them to take the emotion out of the investment decision.
We can identify if property investment is appropriate for you, work out the type of property and ownership structure best suited to your wealth creation strategy, arrange the finance for you, and work with you to ensure you maximise available tax deductions – but we don’t find the property.
To assist potential investors, we have established a referral relationship with BlueWealth Properties – Australia’s largest residential real estate research company (yes – we are paid a referral fee if you buy a property through BlueWealth).
BlueWealth research all capital city and several major regional markets to identify the best time, place and type of property to invest in. They then use their market position to gain access to review many development projects (apartments, townhouses, or house and land packages), and only approve the best of the best – their rejection rate has consistently been over 85% of developments reviewed in the past few years. They then negotiate with developers on the approved stock to get the best deal for their investors.
BlueWealth have a team of over 20 dedicated staff all committed to help you on your property investment journey. They provide education and support throughout the process, including your own microsite (personal website) where you’ll have access to relevant information about the property you are buying. They do not charge you for these services. BlueWealth are licenced real estate agents and are paid a sales commission by the property developer, just as the real estate agent is paid by the vendor when you purchase a property you have identified yourself.
We also have established a relationship with a developer in the Hunter Region who builds house and land packages and townhouses for investors, and marketing marketing agent who have access to properties in regional areas. We will receive referral fees in either case.