Nils Sweeney researches where Investors are investing

Gotta luv Nila Sweeney of the afr

She has been researching the property market and has identified that properties increased by over 10pc around Australia - with bank economists predicting further rises over the next 2 years.

Investors interest in property is rising and mortgages are being written 

This is where The gurus are predicting 

Scott Kuru, Freedom Property Investors

• Gold Coast: Surfers Paradise, Southport
• Perth: Baldivis, East Perth
• Melbourne: Eynesbury
• Sydney: Bankstown, Liverpool

Arjun Paliwal - InvestorKit

• Rockhampton (Qld): Wandal, Kawana
• Townsville (Qld): Berserker, Kelso, Condon, Kirwan
• Perth: Gosnells, Kelmscott, Carey Park

These areas all have median house prices below $500,000 - affordable , strong rental yields and low inventory yields - good indicator of growth 

Kent Lardne -  Suburbtrends

• Adelaide: Golden Grove, Eden Hills, Moana, Trott Park
• Mackay-Whitsundays (Qld): Glenella, Marian, Rural View
• Townsville: Bushland Beach, Bohle Plains, Mount Low
• Cairns: Redlynch, Brinsmead
• Perth: Caversham, Pearsall, Yangebup, Aubin Grove, Secret Harbour
• Brisbane: Eatons Hill

Terry Ryder, founder of property market research firm Hotspotting

• NSW: Shoalhaven local government area
• Sydney: Surry Hills
• Perth: Carey Park

Anissa Cavallo - EDA Property

• Melbourne: Melton South, Fraser - There’s a new hospital being built, household incomes are increasing strongly, and house prices are still affordable

Damian Collins - Momentum Wealth

• Perth: Bayswater, Clarkson, Mandurah - cheap , accessible , station , close to city 

9 Things to look out for when buying a property 

1. Area with strong demand, with  rising population - need for housing 
2. demographics - find Affluent residents are less likely to default on rent payments, m
3. Close to commercial centres - with a diverse and growing local economy 
4. Close to  infrastructure such as schools, parks, public transport
5. Strong rental yield of more than 4.5 per cent 
6. Low vacancy rates
7. Affordable
8. Limited amount of land to avoid potential oversupply in the future.
9. Get a loan when interest rates are high - so you know you can afford the property .  When interest rates decrease, you will have additional funds to pay off the property faster.

Here’s the article in the afr 

End of year tax planning - 7 strategies on how the wealthy save tax

Ivan Kaye  and the team at Ark - accounting and financial planning gurus 

Tax rates are being cut from July 1 . The threshold above which the 37 per cent tax rate applies will increase from $120,000 to $135,000, while the threshold for the 45 per cent tax rate will rise from $180,000 to $190,000.

Consider  defering  your income or pay relevant expenses before June to minimise your tax mobility this year 

Michelle shares 7 strategies to help you reduce the amount of tax you pay - or maximise your tax refund . 

1. Prepay expenses 

Make annual payments for income protection insurance, insurance payments , work-related subscriptions, union fees, technology and work-related travel to claim tax deductions on these related to this financial year. Think about prepaying your interest on mortgages of your investment properties for the year and pre-pay  insurances and property management fees. 

Because of the tax cut there is actually an advantage to it in the sense that you get a deduction this year at the higher tax rates rather than next year at the lower tax rates.

2 . Delay the receipt of income

For business owners, deferring receipts and not invoicing for goods or services until after July 1 can push income into the next financial year, 

 EOFY bonus payment can  be paid in July instead of June.

Defer capital gains by potentially holding off on an asset sale until July.

3. Sell loss-making investments

To offset capital gains made during the year, selling any underperforming or loss-making assets before June 30. 

4. Make charity donations

With donations of more than $2 to an Australian deductible gift recipient being fully tax-deductible, they can “be very useful for last-minute tax planning”,

With an immediate tax deduction for the contributed amount, donors can carry forward any unused portion for up to five years if they’ve overestimated their tax liability.

 Instead of committing to a single charity upfront, donors can gradually distribute the funds to eligible charities later, giving them ample time to make thoughtful giving decisions.”

5. Repair investment properties

Investment property before June 30 to claim a tax deduction. 

Inflating rental property repair claims is on the ATO’s tax deductions hit list this year - so make sure it’s a repair and not an improvement (which can be depreciated over time) 

6. Claim work-related expenses

Home office expenses can be claimed using one of two methods, either the fixed-rate method – where taxpayers can claim 67¢ per hour for every hour they work from home – or the actual cost method, where home-based expenses are apportioned to the amount of time they’ve spent working from home.

If you use  the actual cost method - you  need to have kept records of every expense that they are looking to claim, and “be able to show how they’ve calculated the amount that relates to the working environment and the amount that’s private in nature. 

In terms of time spent working from home, taxpayers using the actual cost method either need to have a record of the hours they’ve worked for the whole year or can base their calculations on a typical four-week WFH sample.

7. Max out super contributions

Taxpayers can make concessional contributions to super of $27,500 per year – this includes both employer contributions and any personal contributions you  make via salary sacrifice. If you have not maxed out these contributions, have spare cash and are looking to boost your  tax deductions, this is a no brainer 

Both the payment and notification have to be received by the fund by June 30.

It’s possible that you  may not have maxed your super in previous years - Providing your super balance is less than $500,000, you can catch up on up to five years of unused concessional contributions.

thank you Michelle at afr for inspiring this article 

If you need me to refer you to a good accountant - to help you with these strategies - let me know - would be delighted to assist ! 

#accounting #tax #taxstrategies #wealth #eofy 

why people are still punting property in Australia - even after continuous gains !!

Nila Sweeney gets  insights from  Warren Hogan at Judo Bank, Eliza Owen at CoreLogic Australia , Shane Oliver at AMP, Louis Christopher at SQM Research, Mark McCrindle, Simon Kuestenmacher, Cameron Murray 

on why people are still punting property in Australia - even after continuous gains !!

Anabelle Tungol and Didith Gabrillo share there stories that give clues 

Here are 9 reasons 

1. Increase rents 8.5pc pa 
2. Lack of supply 
3. Fomo - fear of missing out 
4. Population growth - immigration 
5. Weakness in building approvals 
6. 1st homebuyers incentives 
7. Baby boomers transfer of wealth to children 
8. Sense of home ownership in the psyche of our nation 
9. People are moving further out of cities to buy what they can afford

click here for article

Another interesting article by Scott  Kuru 

Some comments 

Dax  Stanley

Great piece, Nila! 🌟 Buyers seem to be playing a long game, betting that today's high prices are tomorrow's bargains. Reminds me of 'buy high, sell higher.' Curious to see how this optimism holds up!

Adam Kentwell

Sentiment in many recent articles seems to be “prices can’t keep going up because metric ‘x’ is the highest it’s ever been.”

I’m sure that was the same case 40 years ago, 30 years ago, 20 years ago and so on. Buy whenever you can buy, and you’ll likely do well in the long run.

Shanaka Ubeysekara

Of course, only to say they are 

NOT taking any chances. Either way you look at it, it’s a basic necessity or one of the safest investments (if not the safest) of all the asset classes out there. Rest is just noise. It will be

what it will be yesterday, today and tomorrow!

Jerome Lander

No surprise at all.  Years of undersupply are likely to continue under current government policies and given council attitudes and NIMBYs everywhere and an ineffective building industry short of trades (and effective quality tradespeople even more so), and buying has been shown to be superior to renting both lifestyle wise and financially.  The required appreciation from property isn't large to have it make sense.  But just ask a renter how they find their landlord and how well they are respected as a renter; often landlords are awful.  Its hard to see quality areas in Sydney not having further appreciation.

Illan Samuel

Buying investment property  is a tax free haven -if you can get it right and gain over time.... tax free money is a hey factor in building wealth .

Is Geared Property in your SMSF a good thing?

Chris Magnus from Ark Total Wealth says most of his clients want to have their own home debt-free with super savings that will provide them  with a regular income.

If you are 55 and the gap between what you’ve got and what you need to retire is large - you may need to take remedial action and make some geared investments 

Work backwards 

• How much money  do you need when you retire 

• What do you have now

• How do you get there?

If you want to add a geared investment property to your retirement savings, there are a few things you need to think about.

Can a geared property or a few geared properties in an smsf help you to get there?

Is a 10 year investment time horizon between buying a property and when you plan to retire deliver the capital gains required ?

• yes if the property doubles in 10 years -
• and if it doesn’t - can you wait a further 5 years ? 

⁉️What to buy , ⁉️where to buy and ⁉️when to buy are key questions 

Here are my 3 tips from experience 

• Do your research and use professionals who you know like and trust …..
• Be wary of the property spruikers 
• Get independent advice - who does not have a vested interest in your decision of what to buy! 

If you wish to make money from gearing, Shane Oliver of AMP says to consider geared share funds.

If your property asset grows to be about $2 million in combined member benefits, and you move to pension phase at 65, super rules will oblige you to withdraw 5 per cent of the SMSF, or $100,000, each year.

Will the investment property be able to deliver the rental income to allow this level of income to be withdrawn as a statutory minimum. Or will the asset need to be sold to fund the retirement income?

I suppose  this is not a bad problem to have 

Inspired by an article by John Wasiliev of the afr - sharing  his views on investing in geared property in your smsf  :-

Click here to read it 

Start Embracing AI

If you haven’t embraced AI yet - speak to the team at BSI Learning for a crash course! 

click Here for the link

Here is a great email from Chris Gray about aI  Hi Ivan, I'm not sure about you, though I'm still not entirely certain what to think about the rise of AI? One one hand, it's incredible what it can do already, though on the other hand, you can't help but think it's a little scary. And that got me thinking... Artificial Intelligence is here to stay whether we like it or not. It's no longer a pipe dream or science fiction.  Right now, we're in exactly the same place that everyone was when they introduced the telephone, internet, smart phone and several other technologies that changed the way we lived. People think they have a decision as to whether they adopt the technology in their business and life. They don't. The technology is being adapted whether we like it or not (although I do still know people who have fax machines). So the decision is really whether to be at the forefront of adoption, or to find yourself playing catch up as everyone else adopts the technology around you.  Pete from our marketing team was sharing with me on Monday how there has just been another giant step forward in the ability of AI, though rather than try to explain to me what that step was, he simply sent me a few text messages and this email: Hi Chris, GPT just updated their model to something called ChatGPT 4o. It's basically faster and more capable, though the big change was that they added the ability to have natural conversation. It's not available to use on the computer yet, but I can use it already on my GPT app. You literally press a button and start talking. So out of curiosity, first thing this morning I wanted to see what that looked like for Your Empire. I hit record on the computer and had a conversation, not knowing what would actually happen.  Here's a link to the recording:

The above button links to the audio he posted. Take a listen. I was absolutely surprised and shocked. Below is the text message conversation I had with Pete:

Pros: Speed and Efficiency: ChatGPT quickly provided a wealth of information that would have taken me hours to gather on my own. Broad Knowledge: It offered insights from various sources, giving me a comprehensive view of Your Empire’s offerings. Convenience: I could get the information I needed anytime, without having to schedule calls or meetings. Cons: Contextual Understanding: While ChatGPT is great at providing information, it sometimes lacks the deeper contextual understanding a human expert might have. Verification Needed: It’s always a good idea to verify the information from multiple sources to ensure accuracy.

Here's what I really want to know... Are you using AI already? What is the one thing that has blown your mind about the capabilities of AI and how it can be used in the real world.

Help to Buy Scheme for frontline and essential workers - A Free Service

The Help to Buy Scheme is a Labor Government incentive which allows first home buyers (or second home buyers without a current property) to purchase with only a 2% deposit. The Government will then fund and own 30%-40% of the property.

Yes, you have the opportunity to partner with the government to buy your own home!!!

This will then allow the home buyer to get into the market quicker with a lower deposit, lower income, and lower ongoing home loan repayments. The applicant can then choose to buy the Government out at a later date.

Advantages of the Help to Buy Scheme

The main advantage is that it will get you into home ownership sooner. This can be broken down into a few

points...

Eligibility for the Help to Buy Scheme Australia

Expected eligibility criteria for the Help to Buy Scheme

Income of less than $90,000 p.a. for a single applicant, or $120k for joint applicants.

Must be purchasing a property to live in & must not currently own a property in Australia or overseas.

Must be over 18 years of age.

Must be an Australian Citizen.

Must have a 2% deposit.

There will only be 10,000 spots made available initially.

The Scheme is expected to run for 4 years, with 10,000 spots available each year, for a total of 40,000 spots.

These places will be released to individual participating States & Territories on a per capita basis.

Help to Buy Scheme: Expected start date

The Scheme is expected to start "Early 2024". Although, 01/07/2024 wouldn't be too surprising.

More details on the Housing Australia's Media Release Can be seen here , and Julie Collin's interview on ABC,

They should be  releasing the Scheme in early 2024.

If you'd like to be kept updated, please sign up here and type waitlist 

How to apply for the Help to Buy Scheme

You currently are unable to apply until it is released. 

We will be watching the scheme carefully and contacting all interested applicants as soon as the scheme is ready for release. 

If you'd like to be contacted when the scheme is ready, please register here. 

We will use this information to keep you updated and to check your eligibility and prepare your submission. 

That way we can get you one of the 10,000 spots ASAP and ensure you don't miss out. 

Register here for a free service. 

How do you find a property in an area that grows faster than others?

There are many factors that determine what property to buy !!

One is location location location 

Make sure that your area  has consistent buyer demand!

But what research has shown is that some properties in the same location increases more than others!!

So, How do you find a property in  an area that grows faster than others? 

Easy says Robbie Baskin! -  find a property where the LVPP is a 5 Quintile 

Hmmmm 🤔🤔🤔🤔🤔🤔🤔🤔🤔

What is the LVPP? 

And 

What is a 5 Quintile ?

LVPP

The LVPP identifies  how much of the purchase price is derived from land vs. the building. 

The formula is pretty simple - find the land value of a house or unit and divide it by the purchase price!!

Land Value / Purchase Price. 

Quintiles

A 5  quintile represents the top 20% of properties with the highest Land Value Contribution for that area, and 1 represents the bottom 20%.

Robbie Baskin of Frontya’s research shows that the LVPP formula is a strong indication of how your property will increase in an area compared to others! 

So here’s the trick 

Buy a house or an apartment  where it's Land Value Contribution is in the top 20% for its area then chances are you'll achieve an annual property growth rate of 1.5x to the market.