You can even ask the questions

Just a quick update, I am really excited to be sharing some valuable information in one of a series of Business Masters Interviews.

You won’t want to miss this FREE teleconference.

I am being interviewed by David Zeltner from Cash Profit Coaching on “How to Take the Headaches out of Property Investing”

I will be sharing some great information that I know will support you. David will be asking me some really specific questions, however if you have any burning questions that you want answered please email them to david@cashprofitcoaching.com.au in 50 words or less before 10am in the 1st February. David will collate them then I will answer them for you.

FREE Tele Conference

Time: Wednesday 1st February 6.15pm – 7.15pm Sydney Time (AEDT).

(6:45 CDT / 3.15pm WST)

*Please note this tele conference is limited to a number of lines so it’s a case of first in scenario.

Click this link for more information and your login details http://tinyurl.com/businessinterviews

I look forward to answering your questions.

TO SIGN UP CLICK HERE…

Paul Pritchett

Portfolios

If you had a win on the Melbourne Cup and invest in property – Tuesday 1 November would have brought you extra good news.

Weak inflation leading into the September quarter for 2011, down to 0.6% from 0.9% assured investors good news on Melbourne Cup day – a drop in the interest rate by 25 points.

The big four banks were quick to act with three of the four major banks dropping their rates by the Reserve and the nab slightly less.

Inflation is low and likely to stay that way for now – retail figures are flat, people are saving rather than spending.

The Good News

But its good news for property investors with competitive property prices, excellent rental yields across the country and the rising confidence in property prices.

The mining boom rolls on with a seemingly insatiable demand for our resources coming from the nations that seem to have unlimited demand – Asia.

In the next issue we will discuss the state of the Australian property market leading into the new year and our informed prediction on where we think things are headed.

At Portfolios we are committed to property investment as a long term process – with great rental yields and flattening prices now is a great time to buy. Give us a call to find out how we can help you.

The passing of Steve Jobs saddened the technology world – and those touched by the genius synonymous with Apple. So what can great investors learn from such a person?

Steve Jobs epitomised the technology era – like a Father of the faith bringing the world into a modern technological era – seeing the rise of the personal computer and more recently mobile devices such as the iPod and iPhone.

Lets have a look at what it was that captured us all about Steve Jobs. There are many lessons I feel we can translate into our property portfolio and handling the current and emerging property market.

On Innovation

Steve said that “innovation distinguishes between a leader and a follower” Property investors like yourselves need to be innovators, always looking for the next deals and focusing on growth, looking for ways to broaden, improve, mould your strategy.

The great property investors see their portfolios like a business, a place that has room for innovation. Particularly in uncertain times.

Why do you invest in property? What are you doing with your investment? Is it merely a retirement plan, or do you have a greater purpose – a plan to use your portfolio to continue to grow what you do, invest in something else or use your social conscience. Its not just your portfolio but what you do with it that will really separate you out.

Focus

Steve talked about focus and excellence as the opportunity to focus on those few things that you have chosen carefully to undertake – not say yes to every good idea that comes along.

As property investors we need to understand where we are at – what our focus is and what the end goal looks like. Only when we understand these things can we really focus on the property portfolio that is our best strategy.

Passion & Purpose

Good property investors are passionate about property. They love buildings, they get a thrill out of the deal, they understand the investment imperatives and are always looking for ways to grow or secure their portfolio.

Steve aptly said “being the richest man in the cemetery doesn’t matter to me… going to bed at night and saying we have done something wonderful… that’s what matters to me”

Resilience

On a final note, and a great word of assurance for property investors in the current market, Steve had a lot to say about resilience in developing a successful outcome.

On remembering losing his job at Apple originally Jobs said “It was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick. Don’t lose faith.”

Good property investors plan for the long term. They don’t panic, they don’t behave erratically and even in a flat or down market will still find those deals that work now and into the future.

What Can We Say Then?

To those looking to invest in property – now is a great time with dropping interest rates and bargains galore in the market – whilst rents are not declining. Life deals well to the calculated risk taker – what are you waiting for?

The team at Portfolios are passionate about property investment from finance to property to the long-term deal.

“Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in square holes… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think they can change the world, are the ones who do.”  Steve Jobs.

Click here to read McGrath Market Review Winter 2011.

Have you ever wanted to have a high quality NSW property that is never to be repeated on deal and location?

Built right on the sand of a beautiful beach with uninterrupted views of the ocean.

The key benefits:

1. Priced at $199 000 inc GST , under current market valuation
2. A guaranteed nett rental return of 7% for the first 3 years with the first year rent paid upfront in full at settlement
3. No stamp duty payable under a current NSW government initiative
4. High depreciation benefits, now and ongoing, Year 1 is a forecast of $12 300 alone.
5. Has an independent body forecast for capital growth of 7.2 % for the next 5 years and the last 10 years historically 9%
6. An experienced owner operator that acts in your interests
7. Free complete furniture package
8. Positive cashflow up to $146 per week

View Property Now

You Will Need To Be Quick

We have been given the opportunity to make 30 of these properties available to you, but you have to jump at this.

It’s a case of first in best dressed because I am sending this to 24 000 people and after our newsletter late last week now only 24 remain.

One of the main reasons people fail to create wealth through property is procrastination.

Remember the best time to increase your property was 10 years ago, the next best time is now.

View Property Now

The Area

Birubi Beach in Port Stephens NSW is just over 2 hours drive from Sydney and 45 minutes from Newcastle.

A local experienced resort developer and operator is offering Portfolios Property some lots in their new and exciting development.

This property is offering a nett 7% rental return for the initial 3 years. The studio and dual key apartments current valuation is 5% over the contract price excluding furniture.

Overseas investors have already exchanged on 30% of this project.

The immediate area boasts 7 tour operators bringing over 800 tourists to the beach every week, this discounts the additional local tourist trade in the wider Port Stephens area. This resort development offers tourists a unique experience in accommodation, immediate coastal beach access, and of course a wide range of activities.

This adds up to a red hot real estate investment for you.

View Property Now

Other Information

Project is set to commence in March 2011 with completion expected May 2012. A Sunset clause is inplace for December 2012. Terms are 10% cash upfront with a FREE furniture package for the first 30 people.

You can download a Portfolios Property investors report on the Birubi Beach Resort or View Property now.

A more detailed development brochure will be posted here soon.

There are a limited number of these properties available and we’re telling over 30,000 people.

Don’t delay! Call Us NOW or visit our property website.

You Haven’t Missed It!

Sign up today and watch previous sessions from your computer…

Portfolios is supporting this event with our partners Renovating For Profit. We have had a long and fruitful relationship with Renovating For Profit and believe this program will suit any one interested in investing in real estate. If you wish to ask us more questions please leave your details in the fields following Cherie’s letter below. You can also register and catch up with past seminars at any time.

Hi, its Cherie from Renovating For Profit here.

I’ve got some great news to share with you. I’m involved in a brand new ONLINE event where myself and five more of Australia’s most knowledgeable real estate professionals are coming together for a new online conference.

Its called the Masters of Real Estate Investment and this event is new and unlike anything I’ve seen, because it will deliver good quality property educational content straight to your computer from the internet, at absolutely no cost to yourself.

Topics to be included cover developing a positive cash flow property portfolio, renovating for profit, creative property deals – including how to buy property with next to no money, property tax structures and smart property development strategies.

Many of you who have seen me speak before, know I’m a big advocate of self education. Even if you pick up only one new tip, its that one tip that could potentially help you on your way to financial independence.

To date, I know that 9 hours of online property content has already been developed, all put together by professional investors and speakers like myself. The content will be good and more importantly, share information and strategies that you can use in the current property market right now.

The conference series kicks off on September 16th with an overview of the Australian property market with John Lindeman, head of research at Residex, Australia’s oldest property research company.

John’s presentation is amazing and a must for serious property investors!

I think you will really love this and truly hope you value the information. To be part of the event, please CLICK HERE to register now.

Enjoy!

With the Kindest of Regards

The sub prime market in America caused all sorts of problems for the lending marker world wide, raising the cost of lending for lenders and of course increasing interest rates for the average borrower. We examined this in our last article on the sub prime market.

But the low doc market in Australia did not cause the same issues locally as the sub prime market did in the US.

Why?

In short the Australian Reserve Bank knew about the American sub prime market and long prior to banks being able to offer low doc loans was able to put a watch on the market and keep it under control.

About Low Doc Loans

“The term ‘Low Doc’ came about because borrowers need fewer documents to apply for a loan. Rather than provide payslips or tax returns, a borrower can simply state what their income is, a process called “self-verification”. Low-doc loans are primarily for self-employed people with limited records of their income.”

One of the controls over the low doc market has been the Australian Taxation Office. Unlike the IRS in America, the ATO has been watching the low doc market for people who understate the income on tax records for tax purposes and then ’self determine’ their income to be higher for the lender. With this stand over tactic the low doc market has not had the same free reign.

History

Back around 2005-7 when the low doc market was booming the Reserve Bank was more concerned about borrowers who used low-doc loans to overstate their income and get their hands on more money.

“In its biannual Financial Stability Review, early 2005, the Reserve put low-doc lending on its watch list, citing it then as a potential threat to the banking system.” This action perhaps protected many Australian property investors and home owners from the credit crunch that took hold from late 2008.

Some Banks More Exposed Than Others

The rural / regional banks in Australia, perhaps desperate to increase their market share, were the major protagonists of low doc lending. Banks such as the Adelaide Bank was at one stage lending over 30% on low doc with Suncorp around 10% with the majors staying somewhat in single digits.

Criteria In 2010 – Greater Stability

Today, in Australia, to be able to apply for a low doc loan you must be able to secure 20% of the equity yourself. Banks will no longer lend above this amount on a low doc loan giving the borrower and the lender a healthy buffer against loss.

If you look on the Portfolios Property site you will see in each of our property deals we supply both low doc and full doc scenarios with lenders requiring 20% or more equity for low doc.

Managing Lender Risk

The lenders also manage the risk by requiring mortgagees to take out lenders insurance. Mortgage insurance protects the lender from default and can cost over $10,000 on an average loan.

The financial difficulty and bankruptcy clauses in the US has allowed them to become a nation of entrpreneurs, but has also made it too easy to default.

The ‘get out’ clauses in Australia are much tougher than in the US. While lenders here went on a spending spree in similar proportions to America, the regulatory constraints of getting out of your debt in Australia is much tougher than overseas. In America lenders in many instances were simply walking away from the properties leaving the keys in the door and sometimes within months were back in another mortgage again.

Having a glut of properties worth nothing, with huge mortgages over them, and no one to buy them stung the American, and world financial system hard.

This situation hasnt been and is unlikely to be repeated in Australia with tighter controls.

A Good Strategy For Some

We recommend you review your loan types with Portfolios. Low doc loans are still available and in the right conditions can be very profitable.

Contact Portfolios for more information using the form below.

Welcome to the end of the 09/10 Financial Year.

Paying tax is something we all need to do but none of us like to do.

Next tax time you could be adopting legitimate tax minimisation strategies reducing your tax burden whilst building a strong investment property portfolio.

Find out how…

Before reading this article you should always seek proper, independent financial advice before making any investment decision. See the Disclaimer section at the end of our legal page.

With tax time looming we will all be doing our tax returns and probably realising one thing – we are paying too much tax.

Tax is not a bad thing – someone has to pay for our roads, schools and other infrastructure, but there are legitimate ways to reduce your tax by using the money for something more worthwhile like building an investment property portfolio.

We get questions all the time – how can you own a property for under $30 per week? Why so little?

Well one strategy is Negative Gearing.

What Is Negative Gearing?

Negative gearing strategy in Australia is motivated by our tax regime, which allows deduction of ongoing losses against taxed income. This is further offset by taxing capital gains at a lower rate.

This might sound complicated but in reality it isnt.

How It Works!

You purchase a property and incur costs on that property – these costs include third party expenses, loan interest and set up costs.

If the costs on the property are greater than the (rental) income generated you will technically be incurring a loss on that investment.

But the story continues…

You Earn An Income? This Is How It works

In Australia the losses made on property are able to be weighted against your taxable income.

You will need to have a clear picture of your costs versus income to know your losses – costs include depreciation, setup costs, mortgage costs and interest, ongoing maintenance and property costs such as rates. Just like your personal income – you can claim anything that contributes to the generation of income in your property.

All Portfolios properties come to you with a clear understanding of the costs involved so you make an educated decision on the potential for negative gearing of the property before purchasing.

Your capacity to cover the loss is an important factor in determining the right deal.

So If It Is  A Loss Why Do It?

There are a number of reasons why people consider negative gearing as an option for their property investment strategy from straight tax minimisaton through to the great investment returns to be made on the property.

Many of the Portfolios properties are expected to return in excess of 250% return on investment giving you great returns in any market.

Property is a great investment, but like any investment there is risk and you should seek proper independent financial advice.

Talk to Portfolios and see how we can help you make those steps to a future in property investment.

In this second article we give you further insight into making property renovation a great opportunity for you.

The truth is that renovating investment property is an involved and complicated process. But we can help.

In last month’s article we looked at a range of issues including starting out with your end game in mind, understanding the gains you wish to make by having a clear picture of your entry costs, improvements to be made and buffering a contingency.

I remind you that becoming a great project manager is perhaps the best skill you can bring to any reno deal.

Here are some more tips to guide you in successfully renovating an investment property:

1. Be Armed With Knowledge

When you look at a property there is a lot you will need to know about it. Here are some questions you might ask:

• What is the property worth?
• What needs to be done?
• What should be done to capitalise on a profit?
• What is the cost of works?
• Based on your end result get an honest market appraisal on your plans

Due Diligence and knowing all the ins and outs are the key.

2. Know Who Your Selling To – Remember Capital Gain Is The Game

Too often in investment property renovation investors are unclear of the market they are selling to. Make sure when you are deciding on the kind of dwelling you are ending up with that the improvements will suit the local demographic.

For example, if you are renovating a small two bedroom apartment in a dense urban area surrounded by chic cafes and restaurants you are likely to be targeting a young professional or possibly even singles market. Know what this market is looking for and adapt appropriately. Also use colours, textures and furnishings that are appropriate for your market.

This is a good time to remind budding renovators to not get too personal or emotional in your improvements. You are improving to sell not to live in. Keeping it simple also keeps the profit larger.

3. External Factors

What else could possibly hinder the profitability of your development? Use the settlement period to discuss your plans with the local council, if independent assessors are involved perhaps get them onside with your ideas.

Build a relationship with a reliable building team – particularly one you might be able to pay to handle your estimating for you – if you aren’t planning on doing it yourself. Truth is we do very little of our own physical work now purely managing the deal and the project.

At Portfolios we can even show you strategies how to finance the deal using other people’s money and time.

4. Get Loan Pre Approvals

This is your greatest bargaining tool. Both vendors and agents love them and it could help you get a better purchase deal.

Also once you have costed the entire project and built in contingencies, and been approved for the finance then you can get to work immediately and not spend costly months waiting for additional finance.

5. Ask If You Are Unsure

Asking questions can save you from embarrassing mistakes. Ask experts, get information on your potential deal from everywhere possible including competing agents, local council, neighbours, builders, professional property inspectors, valuers, independent property information specialists, and the list could go on.

Financing The Deal

So the deal looks good and you have done your homework – like in any income generating opportunity (or business) you have to spend money to make money.

We have personal experience in renovating property. By talking to Portfolios we can show you how to structure the deal and in turn finance it to maximise your returns, and our friends at Renovating for Profit can show you how to make a lifestyle out of renovating investment property.

First things first fill out a portfolio review or give us a call and we will help you through the steps to making a good life out of investment property renovation.

Make It Happen – you’ll love it.

Paul Pritchett

Most Searched Terms: Portfolios Property, renovation for investment, capital gain, capital growth, Australia, Sydney, Melbourne, Brisbane, Newcastle real estate market.

You can have it all from $7 per week in Kingaroy

July Property Of The Month, Kingaroy, is still offering a great entry into the property investment market with the potential for fantastic returns both in rental and capital gains.

Find out how to purchase an investment property for under $280,000, costing you from $7 per week depending on your financial situation.

Kingaroy is a busy, and popular little town located in the northern Darling Downs positioned as a regional centre with a strong and diverse economy.

The town is located approximately two hours North West of Brisbane and just 90 minutes from the burgeoning Sunshine Coast.

Over the past ten years the region has had an average capital growth in excess of 12%  with forecast growth of 8% being predicted over the next ten. Like all areas of the Darling Downs there is a predicted strong growth over the coming years as new industry moves into the region including coal mining, wind-farming and a 400 MW power station, alone in the immediate proximity.

With rentals fetching $260 per week this property might cost you as little as $7 per week, depending on your tax situation.

Portfolios is offering turn key investment properties in this region including 3 bedrooms, 2 bathrooms, double lock up garage and air conditioning.

You can purchase a property in Kingaroy through Portfolios for as little as $260,000  for a brand new 3 bedroom home on a large block.

To find out why we think this is such a great deal have a look at the properties at www.portfoliosproperty.com.au or follow the link directly to the property.