OCTOBER 2014 - THE BLOCK ISSUE
IN THIS ISSUE: Monthly Highlights
2
Reports you should read
3
Magazine Summaries
5
Magazine Summaries cont.
6
FREE Resources
7
MONTHLY HIGHLIGHTS This month we saw the reality TV Show ‘The Block Glasshouse’ auction. Those guys really worked hard for 3 months and 2 out of the 5 contestants did really well and all of them made money. 2 groups received over $300,000! Two couples received $10,000 and one team $40,000. It is possible to make money when you use the ‘buy renovate and sell’ strategy. However the reality is close to the figures above – not many make a lot of money however as we know, like the typical fisherman or gambler, you only hear about the successes. The key to any property investing strategy is knowing how much money is to be made, before you buy. This means knowing the end value of your property post renovation, your renovation costs and who your target market is, be they either a renter or buyer. This research is key to renovation riches. I visited The Block on a private tour and met some of the hard working contestants who gave up their jobs and made significant sacrifices for their chance at creating wealth, the end results were amazing. However there were some issues that they were working against them from the get go. The properties were expensive to start with, the location had trams going constantly past the front door and the target market for the area were not after $1million+ apartments. In essence the wrong property in the wrong area targeting the wrong market, things none of the contestants could control, but if you are renovating you can. This month in the Toolbox we have some treats for you. Brad Beer from BMT shares the behind the scenes numbers about The Block and he has even allowed me to share with you the actual Quantity Surveys done on each apartment. One apartment had over $60,000 in depreciation in the first year alone, that might help the buyer get over the $80,000 plus in stamp duty they had to cover. Even the ANZ Economic outlook mentions The Block. As I shared with my Ultimate Guide to Renovation students on our first Q&A call this week – making money from property starts with your personal goals, the timeframe to achieve that goal and then working out what type of property portfolio and investing strategy you need to achieve that.The Block is a great TV show for entertainment but to make money through renovation you need to start with the right property, in the right location, bought at the right price. If you don’t get that right then renovating, even though done well, will not result in a profit Till next month and here is to your property success, Jane
OCTOBER|2014
PAGE 2
Reports you should read Herron Todd White Herron Todd White valuers around the country this month tell us what a typical property is like in their city. For those looking to buy interstate this is a great start to what you might be targeting. They alsoprovide an account as to how this particular sector is performing now and in the future. CLICK HERE to download.
Capital City Market Conditions at a glance A quick look around the country to see what stage the markets are in. Data is sourced from Herron Todd White. Source October 2014.
ANZ Housing Update – HOUSE PRICES MAINTAIN MOMENTUM “Home prices continued to increase in the past week, with all capital cities posting positive price growth in seasonally adjusted terms." Click here for the full report.
ANZ Report Home prices continued to increase in the past week, with all capital cities posting positive price growth in seasonally adjusted terms. Melbourne home prices continued their recent roller-coaster run, posting the strongest weekly gain, followed by more moderate gains in Sydney, Brisbane, Adelaide and Perth. Looking through the weekly volatility, prices are increasing in trend terms in Sydney, Adelaide and Perth while prices are easing moderately in Melbourne and Brisbane.
OCTOBER|2014
PAGE 3
RP Data - Wrap Watch this 10 min video – for a quick recap on the state of the market according to the RP Data and Rismark home value index.Capital city dwelling values moved 2.9 per cent higher over the last quarter, over the last 12 months values are up by 9.3%.
Interview with Bradley Beer plus the actual Depreciation Schedules for The Block This month I interviewed Bradley Beer CEO of BMT Quantity Surveyors. He recently did the depreciation schedules on The Block, as he has over the last 10+ years and he shares his thoughts and covers of so many other things every investor should know about getting the most from your property. For Diamond Investors Choice Mortgages clients jump over to your membership area for the extended interview where Brad. There he also discusses how he has built his property portfolio, his strategies now and for the future and the resources he uses to research the market. Click here to view. See reports and Schedules here: BMT Tax Depreciation Media Release BMT Tax Depreciation Media Maverick 33 BMT Tax Depreciation Media Michael and Carlene BMT Tax Depreciation Media Shannon and Simon BMT Tax Depreciation Media Max and Karstan BMT Tax Depreciation Media Chris and Jenna BMT Tax Depreciation Media Darren and Dee
OCTOBER|2014
PAGE 4
Magazine Summaries and Reviews for the Month Money Magazine Well they have done it again, Money magazine has covered extensively the question of if you should rent or buy an investment property. The cover story is fabulous and one not to miss. As someone who rented for ten years whilst I built my property portfolio I have to tell you this strategy can really work.
Your Investment Property Magazine A great article this month for the things to look at when identifying an area to buy and one set to grow. They also how to evaluate an area and what research to do sharing suburbs good for low risk investors and more that are best for cash flow. Then there is the 65 auction techniques, my favourite is #65 “avoid them if possible as you are paying more than everyone else�. There is also a great investor profile that involves looking back over an existing portfolio and realising mistakes and future opportunities. In the past few weeks I have been talking to a lot of people about subdividing if this is you then don't miss the article on the tax issues associate with subdividing and selling the land. Another great month for YIP.
Australian Property Investor Magazine Packed! The only way to describe this month's magazine. This month API start a new series of Mistakes Experts have made and yours truly is the first on the chopping block. The article was supposed to be 4 pages but as I explained I did so much research learning other peoples mistakes so I didn't make them that I leap frogged off their learnings into a great portfolio that keeps growing and with a great cash flow. Anyhow we all make mistakes and over the 2 page article I share mine - I hope you learn from my mistakes so you can avoid them! Don't miss the great article about Steven a young property investor with a large and growing portfolio, an inspiration story. There are other great investor profiles and articles. Including 40 suburbs where rents are rising (remember you need cash flow to pay for your portfolio whilst it is growing but also growth to add to your portfolio and exit it, so do your research on growth with the suburbs listed). For those looking to buy in your Self Managed Super Fund you are also covered.
OCTOBER|2014
PAGE 5
Smart Property Investment Magazine This month the team at SPI reveal their latest property purchase. This time they secured a 2br townhouse in an outer Melbourne suburb, $53,000 below the market valuation! This is a different strategy to the rest of their portfolio purchases. This one is all about an instant equity gain, unlike their other properties this is not a renovators’ delight. As you know with my Trid3nt Strategy® buying below the market, adding equity through renovation in a capital growth area gives you 3 ways to create equity. I am sure this is not all they have in mind so let's wait and see. Other great article include How to choose your first investment property and another on how to deal with auction nerves. Washington Brown has a great article every renovator or purchaser of a renovated property needs to read.
Enrolments are now closed for 2014 and what an amazing bunch of people we have on-board. The Renovator Network Forum is going strong and all the collaboration and sharing of information is what makes this course different to the rest. This week alone we have had discussions on floor plans, sharing of discounts codes for products, a buyer beware alert and much more. Our first Q&A was great with so many on the call and so many questions! Students move onto Module 2 Suburb selection this week and learn our Dot Map technique and how to get from the 14,000+ suburbs in Australia down to the 3-5 they need to start really researching. I can’t wait to discuss their findings on the next Q&A call, when my Investors Choice Mortgages Diamond members join us as well to have all their questions answered.
Join me on a Webinar Would you like to hear how to make money with renovation as your strategy? If so then join me on this free webinar. Click here to organise a time
OCTOBER|2014
PAGE 6
Websites, Apps & Subscriptions you should sign-up for (mostly free) Apps for mobile devices seem to be the latest thing – there are certainly a lot of companies investing big bucks in free apps; I think they will become the new business card of the future so watch this space. Let us know about any you’ve found helpful enquiries@yourpropertysuccess.com.au www.nest.com Google bought Nest out this year their products ie fire alarms and thermostats can be monitored and controlled from your Smart Phone - something to consider for your home http://moneysmartweek.org.au/ As part of the September Money Smart week they launched a great Financial Health Check this is a really good resource to see how you are tracking with your finances. Use their budgeting and savings goal tools they are great and free https://www.moneysmart.gov.au/tools-andresources/calculators-and-apps/savings-goals-calculator
Borrowing Capacity and Where to Buy Calculator Check out the Investors Choice Mortgages website. Thank you for those who sent me emails on how much you loved the Property Plus calculator. It’s a borrowing capacity calculator that tells you where you can afford to buy AND it shows you on a map all the properties currently for sale and rent in your target area. A wonderful resource, check it out if you have not already and bookmark the page.
Disclosure – I purchase with my own money many courses and reports and I give my personal thoughts and opinions on these products and only recommend those I feel of benefit to property investors. In some cases I am invited to be an affiliate of some of these reports, courses and related products and if you buy through my links, I am paid a commission. I believe this does not influence me, but you need to decide that for yourself. I do believe transparency is vital and hence this disclosure.
OCTOBER|2014
PAGE 7