While small in size, there’s lots of big things about Niddrie

 

In an ongoing series of Melbourne suburb profiles, Jeff Grochowski from Accrue Real Estate discusses the lifestyle and property investment potential of Niddrie.

While not officially recognised as a suburb until 1994, the area of Niddrie had been settled in the 1870’s and used predominately as farming land. The name ‘Niddrie’ originates from one of the original houses in the area, which was named for its owner’s birthplace in Scotland. Located just 13 kilometres north west from Melbourne’s CBD, Niddrie is a quiet suburb sandwiched between Essendon North and Keilor East.

The population of Niddrie is around 5,000 and the suburb is well serviced by public transport with tram Route 59 running along Keilor Road. This provides easy access to the CBD and all the suburbs in between. The seven bus routes that service the area make it very convenient to get around in Niddrie and the surrounding suburbs. This easy access to public transport makes Niddrie a great place for young and old alike and means the car can be left at home a little more often, helping the environment and the hip pocket.

While small in size, there’s lots of big things about the suburb of Niddrie. The Niddrie Shopping Precinct is popular and unique enough to have its very own website, which provides a trader directory and keeps everyone up-to-date with all the news and happenings of this vibrant locality. The Niddrie Shopping Precinct is located in Keilor Road and has over 180 local business owners. It offers a diversity in product and service that would leave bigger suburbs envious. Boasting “international culture, atmosphere and bargains”, the precinct covers shopping categories form automotive to wine and beverages, with everything from fashion, beauty, hardware and lifestyle in between.

The vast array of cafes and restaurants offer great venues if you need a break from all the shopping and the range and diversity of cuisine certainly keeps the foodies happy. Thai, Italian, Chinese, Turkish, Greek, Japanese, Mexican, Vietnamese, Portuguese and Spanish fare are all in close proximity – you can get hungry just from the aromas that escape the kitchens of Keilor Road. If more retail therapy is required, Niddrie is a short distance from both Essendon DFO and Westfield Shoppingtown in Airport West.

The housing styles of Niddrie are predominately weatherboard or brick veneer, reflecting the growth of the 1950s and 60s, but like all suburban Melbourne there are increasing numbers of quality multi-unit developments and new family homes. The area also provides residents with excellent parkland areas, including part of the popular Steele Creek Trail and Spring Gully, Rose Creek and Keaki Court Reserves.

While offering lifestyle opportunities that suit modern singles and young couples, Niddrie is particularly attractive to young families due to its proximity to a range of great schools – public and private – including Essendon North Primary, St John Bosco, St Bernard’s College, Buckle Park College, Ave Maria College and Penleigh and Essendon Grammar.

With its proximity to the city and airport and the range of lifestyle options it affords, Niddrie represents a great place for investment.

Contact Accrue Real Estate to learn more about Niddrie and other Melbourne property investment opportunities.

The most popular place to be: Investing in Point Cook

Investing in Point Cook

 

In an ongoing series of Melbourne suburb profiles, Jeff Grochowski from Accrue Real Estate discusses the lifestyle and property investment potential of Point Cook.

Topping the 2017 list of most popular suburbs for house sales, Point Cook is an outer suburb still growing through land release and development. The Central Flying School opened at Point Cook in 1914 – this went on to become the home of the the Australian Flying Corps and the Royal Australian Air Force, the second oldest air force in the world. A museum is now located at this site. Later growth occurred after World War 1 when the area was used as market gardens. Major growth did not occur until the 1990’s; this development continues.

The great thing about this rapid development is that is has also included the development of facilities to make Point Cook a great place for families and singles. New schools and new shopping precincts have been added to the area without the loss of the parks and reserves that provide the suburb with the community and country feel.

Key to Point Cook’s growth is the freeway that provides easy access to the CDB, which is only 26kms away. The suburb is also close to Altona Beach and Werribee Plaza but it also has its own coastal park and neat local shopping hub. This means Point Cook can offer a modern lifestyle for singles and families.

Being a newer suburb, the architecture is mainly contemporary but the range of styles is diverse enough to suit any taste. There are a number of schools, both primary and secondary, allowing families plenty of choice.

With the median price for a 2-bedroom unit under $380,000 and a 3-bedroom unit at $4735,000*, Point Cook represents a great place for investment. The continued interest in the area is likely to keep rental demand high and provide a diversity of tenant.

With its lifestyle options and development potential, Point Cook could be the place for your next investment.

Contact Accrue Real Estate to learn more about Point Cook and other Melbourne property investment opportunities.

*realestate.com, updated April 23rd, 2018.

Image attribution: Point Cook – This image was originally posted to Flickr by Rexness at https://flickr.com/photos/25287507@N02/5092058664

Family-friendly with breathtaking views: Investing in Doreen

Investing in Doreen

 

In an on-going series of Melbourne suburb profiles, Jeff Grochowski from Accrue Real Estate discusses the lifestyle and property investment potential of Doreen.

Originally settled in the mid 1800’s, Doreen is surrounded by the foothills of the Yarra Ranges and the lush forested levees of the Plenty River. This provides the suburb with some breath-taking views and Doreen has a pleasant combination of rural and urban living.

Key to Doreen’s popularity is its family friendliness. There are two primary schools and two respected private schools, Ivanhoe Grammar Schooland Plenty Valley Christian College, giving families excellent choices if they are looking for good schools. Several other schools are also available nearby.Doreen also has several parks and picnic grounds, includingCollingrovePark which is adjacent to the Laurimar Wetlands. This impressive park features imposing gum trees and several innovative playground sets, making it the perfect place for a family outing. There are also barbeques for a picnic lunch.

Doreen provides both a safe family-oriented lifestyle and an environment that provides everything singles are after for a more fast-paced urban lifestyle. In Doreen, the luxuries of country life can be enjoyed alongside the conveniences of modern living as there is lots of open space but it is still close to the city. There is plenty of shops to provide retail therapy and the café and restaurant scene is constantly growing.

With the median price units under $350,000*, Doreen represents a great place for investment. The population has an average age between 20 and 39, a group consisting of those who are beginning to build a family and those with young families, meaning a high rental demand and diversity of tenant.

With its community and country feel, and close proximity to the city centre, Doreen could be the place for your next investment.

Contact Accrue Real Estate to learn more about Doreen and other Melbourne property investment opportunities.

Image also attached (citation: Google Maps, accessed 6 May 2018)

Property Investment

Property Investment

 

Melbourne continues to be one of Australia’s best performers with regard to property investment, even outdoing traditional rival Sydney. Investors are attracted to a number facets of Melbourne, including its growing population (projected to overtake Sydney by 2030), the number of workers based in the inner city (an increase of 24 percent in the last decade) and Melbourne’s consistently high performance in liveability indexes. Melbourne has a diverse range of suburbs in which to invest. The inner eastern and south eastern suburbs continue to hold value and there are a number of fast growing outer-suburban areas as well. Melbourne property prices also make it the perfect place to consider investment

Key to investment is finding the best suburb; key to finding the best suburb are these simple tips.

1. Auction clearance rate

This is the percentage of properties that go to auction and actually sell. If demand in the area is high, but thereare not enough properties on the market, it is likely there will be multiple bidders at each auction and the properties will sell. Suburbs with high clearance rate make good investment areas.

2. Time on the market

This is generally measured in days (DOM – days on market) and is the time it takes for the property to sell. The count begins when the property is listed and ends at the sale date. If there is a high demand in the area, the DOM rate drops because buyers do not want to miss out and purchase quickly and may make offers prior to auction. Suburbs with low DOM can be good for investing as it indicates the popularity of the area.

3. Property vacancy rate

This gives an indication of the rental properties that are currently vacant. A high vacancy rate can indicate renters are not looking to move into the area, while very low rates make the area potentially good for investment as it is unlikely any property will be vacant for a long period.

4. Rental yield

This is linked to low vacancy rates and can be a reflection of an extended period in which finding a rental property in the area is difficult. This creates demand from tenants and in the past has lead to situations where rents are determined by a bidding war (this is to be outlawed by legislation in 2018). High demand for an area will push up rents in tight rental markets and increase rental yield.

5. Rental proportion

This is the number of renters in a suburb as a proportion of the total amount of residents in the suburb. This proportion gives a good indication of the potential competition for any rental investment property. Especially when considered with the property vacancy rate and rental yield, this can suggest whether an area is likely to be a good investment. A high proportion of renters will likely mean a larger number of landlords to compete with in the rental market.

6. Online search interest (OSI)

This is the number of people searching online for property compared to the number of properties available for sale. So if there are 20 properties for sale in a suburb and 200 people searching for property in that suburb the OSI is scored at 10. Like many of the statistics we have looked at, this can be a strong indication of demand exceeding supply; the larger the OSI the less property available and the more likely prices in the area will rise.

Of course, if the thought of tracking through data to find these figures is not appealing, there are other options. Accrue Real Estate is a well-established, premium property introductory service with staff experienced in tracking the Melbourne property market. So if big data is not you, let Accrue Real Estate lay out the facts and figures on the best real estate investments.

Chance originally uploaded by Mark Strozier, used under CC.

Starting with a property – but not necessarily a home

starting-with-a-property

 

The Australian dream of owning a home is deeply ingrained into our culture. But like many things in the 21st century this dream is undergoing a shift.

In the past, people would begin by saving a small deposit for a house, borrowing for the longest possible term knowing they would either pay the house off in the distant future or use it to ‘step up’; buying a property to suit an expanding family. The key to this for many people was compromise. The property was not necessarily in the area they wanted to live or it did not have all the features they wanted but it was affordable.

Today, many people are making alternative choices. Rather than purchase to live in, they make their first property purchase for investment purposes. This allows them to get a foot into the property market with less compromise than their parents made with their first purchase. It can also take some of the emotion out of property purchase; you are not necessarily looking for a kitchen you like or a backyard in which you can relax.

Once you are on the property ladder it is much easier to make progress and the property gives you a solid asset.

Another benefit of starting out with an investment property is the rental income that is being generated by the property. This allows you to service the loan more effectively while your asset is appreciating in value. As well, many of the expenses associated with a rental property, including the interest on the loan, are tax deductable. This allows savings at tax time and perhaps a once a year bonus for something extra.

As already mentioned property investment shouldn’t involve emotion, it is a head over heart task.

Things to get your head around

Investing doesn’t involve looking for a property that you want to live in. When buying an investment property, the focus should be on properties that provide strong rental yield and growth and areas that are showing good property appreciation. Also consider the tenancy rate of the area. Consider amenities in the area, especially public transport, and the proximity to the city.

Buying an investment property means you will also have to give consideration to the task of landlord. This does not have to be arduous, as a property manager can deal with the day-to-day requirements, effectively being a buffer between you and your tenant. However, you do need to know that you can cover costs if the property becomes vacant for an extended period.

You also need to be aware of the associated costs of purchasing property. Some of these costs can include: stamp duty, conveyancing fees, legal costs, and pest and building reports.
An investment property is likely to be part of a long-term plan, especially if you aim to maximise the return on your investment. It is important therefore to know how starting a family might impact on your ability to make repayments.

Always get advice

Investing in property isn’t going to be the best way forward for everyone. It is a great way to get a start into the property market but it does require thought and planning.

The good thing is that there are always professionals who can help you look at the possibilities, including investment property for sale. Accrue Real Estate can walk you through every step of the property purchase process. The Accrue experience includes introducing clients to property generally not available for public purchase. This provides clients with a non-competitive, less stressful environment that not only saves time but can also help them save money. Accrue Real Estate has helped assist many new and experienced buyers and are ready to help you achieve your property goals as quickly and securely as possible.

(Image courtesy of Mark Moz/Flickr)

Knowing how much money is needed to buy a property is key to investment

property management

 

Knowing how much money to borrow to secure a property is key to investment, but like many of life’s big decisions, there is not a one-size-fits all answer or solution. There’s also a number of aspects to consider – it is not necessarily as straight forward as it might initially appear.

The first consideration is the size of the deposit. The larger the deposit the better, as it demonstrates to the lender you are financially secure. The deposit also determines the loan-to-value ratio (LVR).The LVR is a percentage calculated by simply comparing the amount of money you have to borrow to the value of the property. If the property is $500,000 and you have a deposit of $100,000, then you will borrow $400,000 or 80%, which in the LVR.

Your deposit will also determineif you need to factor in the cost of Lender’s Mortgage Insurance (LMI). This is an insurance policy designed to protect the lender should financial loss occur if the borrower is unable to afford to keep up with their home loan repayments. LMI may be a condition the financial institution places on you to borrow. While this cost is usually added to a mortgage, it can add thousands to the mortgage – and you will pay interest on this amount. Take a look at the table below, which gives cost estimates on LMI for a number of scenarios*.

Cost of property 5% deposit 10% deposit 15% deposit
500000 17,480 8,820 4,888
550000 25,812 9,702 4,857
600000 28,158 13,392 7,293
650000 30,505 14,508 7,901
700000 32,851 15,624 8,509

Source: Quotes taken from YourMortgage LMI calculator, correct as at 10 January 2018.

To avoid Lender Mortgage Insurance, a deposit of at least 20% is needed (so, on a $500,000 property the deposit would need to be at least $100,000).

There are also other costs associated with property purchase; these are sometimes also factored into the total borrowings.

Mortgage fees

Depending on your financial institution, there will be a number of upfront fees that could be charged at the establishment of your loan. This may depend on whether you are a new or existing customer or whether there are document preparation and valuation fees. Always ask your lender to outline these before signing any documents.

Insurance

A property is a large asset that you will want to protect; you therefore need to insure it from the time of purchase. Home and contents insurance will be needed if you are planning to live in the property. If the purchase is for an investment and you plan to rent it out, landlord insurance should also be considered.

Stamp duty

Death and taxes! Stamp duty is applied by all Australian states and territories when property purchase is made. Cost varies around the country – Queensland is cheapest and South Australia the most expensive but regardless of your location you will need to have the money to cover the cost of the tax as well as a mortgage registration fee and a transfer fee. The last two of these charges are smaller but still need to be factored in. As with other costs they can be added to total borrowings but this will increase mortgage and interest payments.

In Victoria, costs for a $500000 purchase would be:

Stamp Duty Mortgage registration fee Transfer fee Total
$21,970 $111 $1365 $23,446

Legal fees/conveyancing

There are options for DIY conveyancing but this is probably not advised unless you have some legal experience. You can either employ the services of a solicitor or a registered conveyor. This will depend on the type of purchase you are making. A solicitor can give greater legal advice but a conveyancer is likely to be cheaper.

Property management

If the purchase is an investment and you want to rent it out, you will need to consider engaging the services of a real estate agent or property management service. If the property is not already tenanted, you will want to do this quickly to ensure you have a tenant as close to settlement as you can. This will mean you will have the rental payments to offset the mortgage cost almost as soon as you start paying them.

* These estimates are based on a 30-year mortgage and are indicative results only. Your financial institution will give exact costs for your specific situation.

Property Management

property management

 

Once you have purchased an investment property, you want to know it is working for you. For it to be an asset and not a liability you need to find a tenant. Of course, you don’t want any tenant. We’ve all seen the Current Affair reports of ‘the tenants from hell’ and you want your investment cared for not destroyed. You could try renting the property out yourself. Advertise for tenants. Interview applicants. Check references. Collect rent. Take phone calls if something needs fixing. A colleague of mine who rented a property he owned in the same street in which he lived once had a phone call at 10pm to inform him that the light globe needed changing!

There is an alternative … you can engage the services of a property management service.

Benefits of using a property management service

1. Tenants are a generally higher quality

Put simply, the right tenant is the most important safeguard to your investment property. An experienced property manager will have screened thousands (if not tens of thousands) tenancy applications and will know how to select the best candidates. They will have the know-how to analyse applications for potential warning signs and will have made the contacts to quickly follow up references. They will also know the laws around tenancy applications and tenancy itself, ensuring they are unlikely to be scammed or take measures likely to end in discrimination lawsuits.

2. Tenants are more easily foundand tend to stay longer

Lost rent through vacancy can be an issue, especially if it is an extended vacancy period. However, there are other costs associated with tenant turnover that can also effect the success of an investment property. Each time a tenant leaves there is cleaning, new locks and possibly minor repairs. There are also the associated marketing costs and the screening potential tenants – all of which can be time consuming and ultimately costly.

An established property manager will have a policy of tenant retention that they will have trialled and improved over a number of years. Policies such as this will consist of systematic approaches to ensure happy tenants and maximise the length of stay for a tenant as well as maintain the value of property.

Property managers will ensure the property is ready for rental and suggest and oversee any minor improvements that may need to be made to maximise revenue. Because the property manager will have local knowledge of the area, they will have access to the data on comparable rates. They are also in the business of marketing properties so they will know where to advertise your property to maximise reach. All this is essential to getting your property rented quickly.

3. Rent collection

It is likely that the rent collected each month will be an essential part of maintaining a successful investment plan. This doesn’t allow room for negotiation with a tenant about rental payment. A property manager is a buffer between you and the tenant; they know the rental law and will have established processes for chasing rental payment or taking further action if necessary. Remember my colleague with the light bulb to change? After a few months of phone calls, he hired a property manager. “Best move I ever made”, he said. “The property manager knew how to deal with the tenants from a ‘professional’ viewpoint. He taught them how to follow the agreement of the lease; that’s his job. And the tenants got the idea – the property manager didn’t have the same emotional connection to the property I did.”

Most property managers will tell you that this is the main reason it is easier to manage someone else’s rental property.

4. There are less legal issues

We’ve already mentioned that property managers know the law as it pertains to property rental. No one goers into property investment expecting problems but the future is anunknown and you need to be as prepared as you can be. Engaging an established property manager is one way of being prepared.

5. Less maintenance

It is a simple fact of life that houses wear. Weatherboards need re-painting. A roof may require a new tile now and then. A well-maintained property not only keeps tenants satisfied and happy but also maintains (and increases) the value of your investment property. A property manager may have in-house maintenance staff to take care of simple repairs. They will also have access to established and experienced contractors who will have been checked for quality and cost. If a major problem occurred, they will know whom to contact quickly to get the work done efficiently and at the best price.

An experienced property manager will also establish a program of preventative maintenance designed to eliminate complications by dealing with them early – before they become a costly problem. This will involve regular inspections of the property, reporting back to you with suggestions and feedback on anything that may need to be looked at.

6. Personal benefit

Of all reasons for engaging a property manager, this may be the best one of all. Put simply, there will be less stress. You won’t to deal with emergencies (like middle of the night light globe issues!), chasing rental payments, evictions, rental scams, lousy tenants or the mountain of paperwork. Having a good property manager also means you don’t limit investment to property near where you live; potentially you could invest in the other side of the city or even interstate. And, of course, if you are not worrying about your property and you don’t have to be tending to it you will have more time to spend do what you enjoy with family and friends.

https://commons.wikimedia.org/wiki/File%3AWell_kept_detail_-_panoramio.jpg;
groothelm [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons.

Is property investment for me?

Property investment continues to be popular in Australia and it is not hard to understand why. A property investment can be a way to financial security in retirement or provide your children with a foothold on the property ladder. But investment also brings with it risks. How do you know if you are in a position to invest? What do you need to know before you buy? If you are curious about this and what leads to successful property investment in Australia, the following tips provide a broad overview of what you need to know.

Do due diligence

Any investment requires planning and preparation; because of the costs involved this is especially true of property investment. Check each step of the way with thorough research. Ask for advice but always qualify information yourself, ultimately you will bear the cost of mistakes.

Set your financial goals

This is another essential part of investment. Firstly, you need to have a clear indication of why you are investing in property in the first place. Is it a retirement plan or something more short term? Is it for your own benefit or is it to assist your children? Knowing when you want to achieve your investment goals will help with planning to reach them. Your investment goals will be set to your own risk profile and depend on your own personal attitude toward risk. It is important that you determine this to ensure that the investment does not cause stress or worry.

You also need to establish your current position. You need to know your assets, income and expenditure and what that will allow you to borrow for investment. Once you have a clear picture of this, you need to be sure you are able to maintain a budget that will support any repayments on the investment. This does not have to be a dire situation; most people find they are able to modify spending to find extra savings. Also keep in mind that your tenants are helping you topay your mortgage as you sit and watch your investment improve in value.

The size of the initial deposit will be the most significant consideration. Most experts consider 20% the minimum deposit needed, but it is possible to purchase property with as little as a 5% deposit. However, this will attract further costs for Lender’s Mortgage Insurance (LMI). Other associated costs include stamp duty and legal fees. You need to be sure of all these costs before committing to an investment purchase.

Know the taxes

Property investment brings both bad and good news with regard to taxes. Initially, you need to pay stamp duty on the property purchase (around 2 – 3% of the price of the property; depending on which state you are buying in). This has to be paid at the time of the purchase and some people choose to add this cost to the amount of money they are borrowing. While this pays for the tax, you then pay interest on the extra amount you have added to your loan.

Council rates are another form of property tax which must be paid annually. Payment can be in one lump sum or spread across quarterly payments. This payment will also cover garbage collection and other municipal charges.

There is also anannual land tax if you have substantial property holdings (the threshold in Victoria is $2500000). While this may not effect a single property purchase it is worthwhile checking out details before making a purchase.

The good news with regard to tax is that there are a range of tax deductible expenses which your investment property will generate. These can help reduce your tax bills as well as improving cash flow. An investment property is negatively geared if the income from the rent is less than the interest paid on the funds borrowed. This negative gearing allows you to offset any loss in the expense of owning and maintaining an investment property against any income you earn. This allows you to use the tax system to bear the brunt of the short term losses of the property investment.

Location, location, location

It is important that your purchase is located in a desirable neighbourhood. The location should also include easy access to public transport or parking, shops & restaurants, schools and recreation area, such as parks and beaches. All these considerations determine the market value of your property and how much it will increase in value. The demographics of the area are another important consideration in whether the area is desirable to tenants.

An investment property needs to be an area with a strong rental market, which is essentially determined by supply and demand. You want to look for an area with a low vacancy rate (ideally below 3.5%), as this can indicate the area is attractive to renters. Low vacancy rates would also suggest it is unlikely any property will be vacant for a long period.

The location of your property also needs to be in an area where the rental proportion is not too high. Every suburb will have owner occupiers and renters. The proportion of each will determine whether an area is likely to be a good investment. A high proportion of renters will likely mean a larger number of landlords to compete with in the rental market.

There is help

Earlier in this article we mentioned asking for advice. Learning about property investment is a key strategy to success in property investment. And the good news is that if the idea of hunting for a property doesn’t appeal, the thought of having to find tenants gives you nightmares or any of the undertakingsassociated with real estate investing just turns you cold, you don’t have to go it alone. Accrue Real Estate is a well-established, premium property introductory service which will take the stress out of the process. With associates in all the fields related to property investment Accrue Real Estate can help turn your property investment dreams into reality.

Good reasons for investing in real estate

 

1. It is a (relatively) safe investment

No one goes into investment intending to lose money and the well-known phrase ‘safe as houses’ gives voice to the reason property investment is still key to investment strategy. Melbourne propertycontinues to gain value, outperforming traditional rival Sydney and according to research by AMP, Australian property value has increased at a rate comparable to that of the share market since 1926. Investment in the share market affords much more volatility and requires a great more expertise and specialised knowledge. Investment in shares? Snakes and ladders. Investment in property? Safe as houses.

2. It’s tangible

When you invest in property, you have a physical asset. One that you can touch and see. It doesn’t just exist on paper or float around in some cloud. A property is there for you to look at.

3. It can lead to wealth accumulation

Property investment is an established step in the accumulation of further wealth. It offers leverage by providing a tangible asset that can then be used as security for further investment. Lenders are likely to lend more against the value of the property than the value of a share portfolio. As the capital growth of the property increases so too does potential borrowing power. In building a property portfolio it is this borrowing power that allow the portfolio to expand.

4. It provides ways for tax reduction

A key benefit of property investment is the tax breaks that can come from being the owner of rental properties. The Australian Taxation Office (ATO) allow investment expenses to written off against tax. This lowers income and therefore the tax bill but also offsets any gap between the rental income and property costs.

The ATO also allows any property owner obtaining income from their property to claim a depreciation benefit. As a building gets older and the fixtures and fittings within it age, they depreciate in value. Property owners can claim this depreciationas a tax deduction.

Another tax benefit of property ownership is its relation to capital gains tax (CGT). If you sell your own residence, you do not pay any CGT on the profit. If it is an investment property you are selling, and you have held that property for more than 12 months, you pay CGT on only half of the profit. These three tax benefits continue to make property investment an affordable option for many Australian families.

5. It can assist children get into the property market

As the property market continues to grow, many parents have concerns for their children ability to buy a house. They worry that they will never buy and be permanent renters. But when considering long-term investment, it doesn’t just involveone lifetime – investors can also think about their children, too. Property investment today is one method mums and dads are using to provide future assistance for their children. A property purchased today can provide future borrowing power that will enable parents to assist their children with a deposit or purchase when they need it most.

6. You can take control with a self-managed superannuation fund

While it may seem they are only a recent innovation, self-managed superannuation funds (SMSF) have actually been around for a while. It has been the changes in borrowing laws that has brought SMSFs to the fore, as it is now possible to invest in property through superannuation. The best part of buying property through a SMSF is its taxeffectiveness. The sale of a SMSF property attracts a capital gains tax of only 10%; however, it reduces to zero for over 60s. The set-up of a SMSF is quite complex and would require advice and assistance but it can be a realistic method of property investment and securing a strong financial future.

7. It is a solid strategy for the future

Property investment can provide immediate reward but is also a solid strategy for the future, and not just with regard to financial benefits. Bu utilising some of the tax strategies discussed earlier, it can be possible to purchase a residence in a specific neighbourhood, rent it for a number of years and then occupy it at a later date when it is more financially viable to be a personal residence. Structured correctly, this could even provide a first home.

8. It is more stable then securities

Historically, the property market tends to have greater stability than the stock market. There are a number of reasons for this, but it is largely due to the fact that firstly, property purchase requires a greater effort and secondly there is far more regulation in property requiring much more paperwork and associated cost. Short-term speculators jump on stocks and shares, which sell and trade quickly. The property market requires time – this reduces market volatility. Even during crashes, crises and recessions property market prices will hold their own or at least level off.

9. It can fulfil a desire!

Fast cars are wonderful – even better is having the classy garage to drive them into! Property investment and property tradingcan provide for a wider selection process; selection is not necessarily based on personal needs but market trends. A ‘trophy property’ in a sought after area is attractive to people who may not have the incentive to purchase or invest. As well, as we have discussed, the better the property the better the tax benefits and the greater the borrowing power, all of which can provide the ability to build a portfolio of ‘trophy properties’.