13 Ways to Start Powerfully as a Property Investor

1. Know why you’re investing in property
Get clear about your reasons for choosing to invest in property instead of other asset classes such as shares.

Most investors know why they want to invest in property but some do it for the wrong reasons, such as trying to keep up with their neighbours or friends who are investing.

Property investing is not a competition. To buy an investment property just to trump a friend or have something to brag about is not wise.

2. Understand the risks of investing in property
Just because prices have been growing consistently for a number of years doesn’t mean they’ll go on indefinitely.

The truth is, growth in value is rarely consistent and linear. Some years you get growth spurts. Other times it’s stuck in the mud. In short, capital growth is hard to predict.

You could also face vacancies or tenants that default and destroy your property. While there are ways to reduce these risks, they remain a part of investing in property.

If the area is in high demand, discounts are virtually non-existent as vendors know they could get the price they want.

3. Be prepared to stick it out over the long term
Even if you bought in the right area and picked the right property, there’s no guarantee that you’d see growth quickly.

While some areas may experience rare short-term surges, the majority of suburbs go through periods of slow to no growth before values rise.

Therefore, be prepared to hold your property for at least one cycle (around 7 years) if you want to make a solid gain.

This means ensuring you have a solid cash flow to maintain your property to avoid selling prematurely.

4. Learn everything you can
While you’re building your deposit, learn everything you can about property investing. Buy a few books from a range of authors to get a variety of opinions. Once you start hearing the same things over and over, you know you’re ready.

“Be cautious of expensive courses with ‘high hope’ marketing tactics,” warns Jeremy Sheppard, creator of DSRdata.com.au. “Whatever you can learn in a weekend course is not worth thousands of dollars.”

5. Get your finances sorted ASAP
Create a budget so you live well within your means. However, make sure your investment doesn’t stretch you too far.

“Remember that property investing is a long-term game. Don’t plan to tough it out for the first year, because that first year might stretch out to five,” says Sheppard.

6. Start with buy and hold
Capital growth is the ant’s pants of property investing. It’s also the easiest strategy if you know what to look for.

“Start off with this basic strategy,” advises Sheppard. “Once you can nail this, you may never need any other strategy. But even if you stretch into others, they’ll all benefit from having underlying growth.”

7. Identify vested interests
The most noise in the property investment industry comes from people trying to sell you something.

Not all of them are sinister. You’ll find plenty of well-meaning individuals who are simply badly mistaken.

Each council website is different, but most will have a page where you can view development applications.

“You won’t know who to believe sometimes. But if you can recognise when someone has something to gain by the conclusions they can get you to draw, then that’s a good start to protecting yourself,” says Sheppard.

8. Buy the best property country-wide
Plan to buy outside your own backyard. Plan to jump on a plane one weekend and go wherever the best property market is that fits your budget.

“You must learn how to read a property market from its supply and demand qualities, not from your past experience with the neighbourhood,” says Sheppard.

9. Buy existing properties
As a general rule, don’t buy new. New properties come at a premium and like driving a car out of the showroom, can drop in value soon after purchase.

10. Target character houses
If you can get an old period or character house, they usually make great long-term investments. But make sure it is in good condition.

11. Get close to the CBD
The closer to the CBD, the more convenient the property will be for tenants. Proximity to amenities that cities provide is a huge demand drawcard.

12. Development potential
Aim for a decent block of land that at least allows for a duplex to be built at some point in the distant future. A 300 square metre block is way too small – look for 550 square metres or more.

13. Get your head around supply and demand
Prices rise when demand exceeds supply. You want the highest demand to supply ratio (DSR). Sheppard points out that all your research for growth markets should be based on this philosophy. All your interpretation of data should be aimed at gauging supply and demand.

The bottom line
If you start early enough, you can make a number of mistakes and still end up not needing a pension at retirement age. That’s the magical thing about compound growth.

“Property investing is one of the surest ways to set yourself up for early retirement. You’ll never be a billionaire, but you only need to be a millionaire anyway,” says Sheppard.


Source: Propertymarketinsider.com.au

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Key changes to pricing and offers in the last month in Australian consumer banking

Click here to see a summary of the key changes to pricing and offers in the last month in Australian consumer banking.


Note that the deposit rates on offer continuing their downward trend

Key changes:

  • ANZ’s​ Progress Saver has had its ongoing bonus rate reduced by 10bp to
  • Bankwest​ cut the base rate of its TeleNet Saver product from 1.50% to 1.25%.
    The 2.7% introductory rate holds steady at its current value.
  • Commonwealth Bank ​adjusted the $250,000 to $1,000,000 ongoing bonus
    rate tier on its GoalSaver account from 2.50% to 2.30%
  • ING​ reduced the base rate on its savings products from 1.35% to 1.15%. This
    change affects the ≤$50,000 tier on its Savings Accelerator product, in
    addition to its Savings Maximiser rate if the required everyday transactions
    to access the special rate are not made. The special Savings Maximiser rate
    remains unchanged at 2.80%
  • ME Bank ​decreased the bonus rate on its competitive Online Savings
    Account by 10 basis points (now 2.85%).
  • Westpac​ added a $50 cashback offer for eligible students opening a new
    Choice Account.
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Parental gifts and borrowers of convenience

Here is some food for thought. A borrower put their parents on title to help with servicing of  a loan and for additional security, after their divorce.  It was required to be 10%.

The parents passed away and the client could not meet the payments due to adverse life circumstances and was declared bankrupt.

The trustee of the parents estate claimed the 1/10th ownership of the property even though the beneficiaries ( sisters and brother) all said the arrangement was for convenience.

Now the trustee in bankruptcy has a claim from the executor of the parents estate.

A messy situation and if you have done this maybe you should think about undoing it soon.

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The human face of lending

An elderly farmer who lived between Wollongong and Canberra needed finance to sub-divide 9 lots from his farm so he could see them

This would enable him to pay off his debts and to continue farming

He approached numerous banks and financial institutions but was turned down by each and every one

Although he had plenty of equity, he was denied a loan because he did not conform strictly to the lending rules laid down by these big institutions

They informed the farmer that his application was refused because of factors such as it was too remote, the lots were too small, he did not have any pre-sales

The rules precluded him even though his credit was good and it was a sound business proposition

He then approached PCL Money which being one of Australia’s most experienced Finance Brokers understood the need to go and see the farmer’s operation first hand

PCL Money’s philosophy is that in deals like these you need to go get yup from your desk and actually there and get mud on your boots

PCL visited the proposed sub-division, spent some time with the farmer and came away with the impression that it was a solid deal and the farmer deserved support

PCL Money was able to provide finance for the farmer and an interest rate that was better than many of the lending institutions that had turned the farmer down

The famer was able to pay off the loan completely after selling the first three lots

That is the human face of lending and PCL Money understands that people more than just numbers on a balance sheet

AT PCL Money, a client’s needs are our most important consideration .

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One in three people are unable to obtain a loan as a result of credit tightening policies implemented by lenders

One Sydney-based Business Development Manager and former mortgage broker Hank Hong, says that one in three clients are unable to obtain a loan as a result of credit tightening policies implemented by lenders.

“It’s [credit tightening] affected servicing and how much you can actually lend based on incomes,” Mr Hong said. “Certain offers that they put into place, higher living expenses, certain buffer rates, have reduced what [clients] can borrow.

The BDM added that borrowers, who have previously obtained unsuitable loans, are now struggling to manage their mortgage repayments.

“Existing clients are coming back because they’re not being able to service the loans that they were initially approved for because of the tightening of the service calculations,” the broker continued.

“Going back two years ago, people were getting million-dollar loans — $1 million to $1.5 million — with just $80,000 incomes or combined incomes of $150,000.

“They were on fixed rates of 3.99 per cent on interest-only loans, which they could afford, but when these fixed rates come off and the interest-only comes off, those clients are going to struggle to make the P&I repayments.

When looking for a loan you need guidance from a professional that you can trust. PCL Money is one of the most experienced finance brokers in Australia and has the knowledge and expertise to offer their clients the right financial advice.

As a member of the Mortgage and Finance Association of Australia – the MFAA – PCL Money meets their strict accreditation standards for education, experience and ethics.

When you deal with Illawarra Home Loans and their sister company PCL Money you get the benefit of their thirty years of experience in the finance industry to help you with what are often very important major decisions in life.

With PCL Money you can be confident that you are working with a company that has the integrity to help you source the most appropriate loan for you business and personal circumstances.

As an MFAA member PCL Money must adhere to a code of practice that demands the highest standards – ethical behaviour, fair practices and compliance with relevant laws and regulations.

Contact our friendly team to discuss your financial requirements in the strictest confidence. They will can save you time because there are a lot of choices available on the finance market today.

With PCL Money you are working with a professional team that already has extensive knowledge of the borrowing options available.

We can offer you more choices compared to a bank or building society and when you compare their rates you will often find that PCL Money offers a more competitive interest rate than the banks.

This is because PCL Money has a panel of lenders from whom to source loans and are not locked in with any one single institution.

PCL Money can help you avoid the lending pitfalls where a loan offer at face value looks great but can include penalties, fees and charges that are not obvious.

Talk to us and get answers that you can understand to questions like: ‘How much should I borrow and should I have a fixed rate, variable rate or a split rate?’

We will give you straightforward advice on how to increase your borrowing capacity and how to pay off your mortgage sooner.

Find out what you need to know about debt consolidation and how to improve the cash flow of your business.

Contact us today and deal with one of Australia’s longest established Finance Brokers where you can sure that you will get the right advice to help you avoid taking out a loan that you may later regret.

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Want to know about BITCOIN ?????

A lot of monkeys lived near a village.
One day a merchant came to the village to buy these monkeys!
He announced that he will buy the monkeys @ $100 each.
The villagers thought that this man is mad.
They thought how can somebody buy stray monkeys at $100 each?

Still, some people caught some monkeys and gave it to this merchant and he gave $100 for each monkey.
This news spread like wildfire and people caught monkeys and sold it to the merchant.
After a few days, the merchant announced that he will buy monkeys @$200 each.
The lazy villagers also ran around to catch the remaining monkeys!
They sold the remaining monkeys @ $200 each.
Then the merchant announced that he will buy monkeys @ $500 each!
The villagers start to lose sleep! … They caught six or seven monkeys, which was all that was left and got $500 each.
The villagers were waiting anxiously for the next announcement.
Then the merchant announced that he is going home for a week. And when he returns, he will buy monkeys @ $1000 each!
He asked his employee to take care of the monkeys he bought. He was alone taking care of all the monkeys in a cage.
The merchant went home.

The villagers were very sad as there were no more monkeys left for them to sell it at $1000 each.☹
Then the employee told them that he will sell some monkeys @ $700 each secretly.
This news spread like fire. Since the merchant buys monkey @ $1000 each, there is a 300 profit for each monkey.
The next day, villagers made a queue near the monkey cage.
The employee sold all the monkeys at $700 each. The rich bought monkeys in big lots. The poor borrowed money from money lenders and also bought monkeys!

The villagers took care of their monkeys & waited for the merchant to return.
But nobody came! … Then they ran to the employee..
But he has already left too !
The villagers then realised that they have bought the useless stray monkeys @ $700 each and unable to sell them!
The Bitcoin will be the next monkey business
It will make a lot of people bankrupt and a few people filthy rich in this monkey business.
That’s how it will work

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New legislation provides tax cut for first home buyers

The federal government has successfully passed legislation that will allow first home buyers to access their tax-exempt voluntary superannuation contributions when saving for a deposit.

On Thursday (7 December), the federal parliament passed elements of the Turnbull government’s housing affordability plan, which was first announced in the budget.

This plan incorporates the First Home Super Saver Scheme (FHSS), which enables first home buyers (FHBs) to access their tax-exempt voluntary superannuation contributions from 1 July 2018, and the rate of deemed earnings (made from 1 July 2017).

The FHSS permits individuals to contribute up to $30,000 (but no more than $15,000 a year) to their superannuation account, with FHB couples eligible to contribute up to $60,000.

It is hoped that the move will “accelerate” deposit saving by up to 30 per cent.

Further, in an attempt to free up homes for younger, growing families, the legislation will provide an incentive for older Australians (65 and over) to downsize, by allowing them to contribute up to $300,000 from the sale proceeds of their current dwelling, to their superannuation.

Both members of a couple aged over 65 will be eligible to make a contribution; meaning a couple can contribute a combined sum of $600,000 to their super.

In order to be eligible, Australians over the age of 65 must have lived in the dwelling they intend to sell for at least 10 years, and can only make contributions after 1 July 2018.

Speaking after the key elements were passed, Treasurer Scott Morrison, stated: “The FHSSS provides a much-needed tax cut to young Australians saving for their first home. From 1 July 2018, first home buyers will be able to withdraw voluntary superannuation contributions they’ve made since 1 July 2017, along with a deemed rate of earnings, to help buy their home. This will give first home buyers a significant leg-up towards saving their deposit, helping them overcome a key barrier for getting into the housing market.

“The downsizing measure removes a financial obstacle from older Australians who are considering moving to homes that better suit their needs.”

He concluded: “The Turnbull government is continuing to deliver on its commitment to ensure all Australians have access to secure, stable and affordable housing.”

Both housing affordability and FHBs have been in the spotlight recently; according to a recent Bankwest report, Australian FHBs are now spending more time saving for deposits before purchasing a home.

The 2017 Bankwest First Time Buyers Report revealed that on average, FHB couples now spend 4.6 years saving for a 20 per cent house deposit of $111,080 on a median priced home; up from 4.4 years spent saving on a deposit of $103,907 in the previous year.

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National Update

Brisbane, QLD

Sydney, NSW

Perth, WA

Melbourne, VIC

Adelaide, SA

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Non-Capital City Housing Markers A Real Mixed Bag

Earlier this month CoreLogic released their October 2017 home value index results, in this week’s Pulse we focus on what these results look like across the regional housing markets.

According to the CoreLogic home value index results for October 2017, dwelling values across the combined regional housing markets of the country were unchanged over the month.  While dwelling values were flat, they fell by -0.1% over the quarter and were 4.9% higher over the past 12 months.  The quarterly decline in values was the largest fall since the three months to October 2014 while the 4.9% annual change was the lowest annual change since February 2017.


While the data indicates that the rate of dwelling value growth is slowing, there are some differences occurring across the regional markets of the states and territories.

Regional NSW

Dwelling values increased by 0.2% in October 2017 to be 0.7% higher over the three months to October 2017 and 9.7% higher over the past year.  Monthly, quarterly and annual growth rates are slowing however, regional NSW has recorded faster annual growth than Sydney over the past two months.


Regional Vic

The 0.3% increase in values in October was the greatest monthly increase since April of this year.  Over the past three months, values are -0.3% lower while over the past year they have increased by 4.4%.  At 4.4% annual growth, the regional areas of Vic are growing at a much slower pace than Melbourne where values are 11.0% higher over the year.


Regional Qld

Dwelling values were -0.2% lower over the month however, they fell by -0.5% over the quarter and were 1.6% higher over the past year.  Regional Qld dwelling value growth has continued to underperform the quite moderate growth in Brisbane as regions outside of the south-east corner continue to drag on the performance.


Regional SA

Dwelling values fell by -0.5% over the month, were -2.1% lower over the quarter and -0.9% lower over the past year.  While dwelling values are increasing at a moderate pace in Adelaide, outside of the capital city housing demand is much weaker leading to value falls.


Regional WA

While Perth values have not fallen for two months, in Regional WA, dwelling values fell -0.4% in October, they were -1.4% lower over the quarter and -3.0% lower over the year.  This indicates that regional WA values have fallen at a slightly faster pace than Perth values over the past year.


Regional Tas

Values were 0.3% higher in October 2017, -0.4% lower over the three months to October and 5.4% higher over the year.  Although annual value growth was much slower than in Hobart, it has accelerated from an increase of 1.7% a year ago.


Regional NT

Values rose by 1.1% over the month to be 0.7% higher over the past three months and 1.3% higher over the year.  Although growth is still minimal, it is significantly greater than the -5.7% fall in Darwin values over the year.


Growth in regional dwelling values generally continues to lag capital cities however, in most states the growth in values of regional property markets are generally stronger than they have been over recent years.

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Insights From the 2016 Census For Builders and Developers

Australia is changing. Data from the 2016 Census has been released – we provide insights to help you better target today’s market.

Just as our appetite for V8-powered cars is shifting towards smaller, more economical cars, what Australians are looking for in other areas is changing too . The 2016  Census reveals that a great deal has changed in Australia over the past 5 to 10 years. As a country, we’re getting older and we’re less likely to live in a house. Our median weekly incomes have increased, but so too have our rents and need for education. The Census – particularly when combined with data from other sources such as CoreLogic – is a powerful source of information that you can use to your advantage to display your national and local expertise and gain more leads.

Demand from school children and elderly

There are 1.9 million more of us than 2011, an increase of 8.8 per cent.
Primary school and secondary school attendance is up 9.8 per cent and 8.3 per cent respectively on 2011. Tertiary education including universities is up a massive 14% on 5 years ago. As the 1.9 million children currently in primary school progress into a secondary school sector that already supports 1.45 million, education will continue to require increasing investment. Now is the time to start working your contacts for school development work, from new schools to renovations or expansions to existing facilities.

Our population is ageing. There are 664 thousand more Australians now aged over 65 than there were 5 years ago; a total of 3.67 million or 22 per cent. 449 thousand people in that increase are aged 65 to 74, a 27 per cent increase on 2011. And there are 1.3 million Australians aged 60 to 64. Demand for health care, multi-generational living, aged care facilities and senior friendly spaces will be high. Be on high alert for potential aged care facility locations and make sure you have the resources to tender at short notice.

Home Internet and networking

83.2% of households accessed the Internet from home in 2016, a 15.6 per cent increase from 20112. Data needs and speeds are being driven by the continued adoption and increasing use of smart devices and television streaming services4. Smart home applications like Google Home and smart lighting are designed to make our lives easier, but also drive an increased reliance on in-home connectivity.

High-speed fibre networking to the premises will take on increased importance for buyers, especially in greenfield developments and new builds. Consideration should be given in planning and development to multiple wired networking points around the primary residence – particularly in media rooms and offices – as well as in ancillary buildings such as secondary dwellings, sheds and garages.

Medium-density living, and more cars!

Australian families by and large are still living in separate houses, however, the percentage of the population doing so has dropped from 75.6 per cent in 2011 to 72.9 per cent in 20162. This has been made up by a move to semi-detached, terrace houses, townhouses and apartments. Don’t just focus on advertising big projects – adapt and retarget marketing material to attract clients wishing to build smaller homes or apartments.

At the same time, even though we’ve traded our high-powered V8 for a four or six-cylinder sedan1, Australian households have more cars than ever before2. While most households had one or two cars parked at home in 20162, 18.1 per cent had three or more, as compared to 16.5 per cent in 20112 and 15 per cent in 2006 .

Rent hike

Median weekly household incomes have increased $204 since 2011 to $1438. Median monthly mortgage payments have remained about the same as 5 years ago at $1755, however median weekly rent has risen 76 per cent since 2006  and 17.5 per cent since 2011,3. Despite the rent hike, more Australians were renting in 2016 (30.9 per cent), compared to 2006 (28.1 per cent)3 and 2011 (29.6 per cent)2. Whether or not there is a cooling in the investment market, rent hikes point to continued demand and the potential for improved yields.

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