Property Management Update June 2015
for people to purchase investment real estate in Australia over recent years. A bump for building
Whatâ€™s in the federal budget for real estate? It's that time of year budget season. As states and territories, business executives and low-income families alike hold onto their seats, Australian Treasurer Joe Hockey has laid down a budget with a number of impacts on the housing market. This is important to pay attention to, whether you're buying a home as an experienced investor or a first time buyer - but what's going to change? Steady as she goes in the tax corner "If it ain't broke, don't fix it" seemed to be the motto on taxes relating to real estate in the Australian Budget, with no significant change
to many important fees. In a May 12 response to the budget from the Real Estate Institute of Australia, CEO Amanda Lynch said the tax arrangements that have been held in place will be great for property investment. "With other sectors of the economy slowing, housing will play an increasingly important role and it is pleasing to see the government has not tampered with tax arrangements that have been proven to help stimulate housing investment in Australia," she said. This pertains to both negative gearing and the Capital Gains Tax, both of which have proven good incentives
Furthermore, the budget contained packages that will have benefits for the supply side of the housing industry, by boosting construction businesses - something the Housing Industry Association is thrilled by. "The $5.5 billion 'Growing jobs and small business package' provides important support to a wide-ranging group of small businesses in the residential construction industry," said Graham Wolfe, HIA chief executive for industry policy and media relations in a May 12 release. This statement referred to the small business sector as the "engine room" of the housing construction industry, so this grant might have some fantastic benefits for this part of the residential real estate market. Given that Australian Bureau of Statistics figures already have trend approvals sitting at 18.2 per cent higher
in March 2015 than the year before, this is a strong base to work from! This could mean we're about to see even stronger growth in housing construction, and all the growth benefits that come with it. This gives first time buyers of property for sale more options grants available to this group are usually only for use on new homes or the construction of a dwelling. Boosts to construction means more new properties for first homer buyers or investors. Contact us to find out what's in your area. Looking for information about SMSF Investment? Make sure you visit firstnational.com.au and click on the â€˜Looking to Investâ€™ tab on our landing page. From there, you can navigate to our Self Managed Super area where we answer all your questions.
36 Ceafield Road Para Hills West Low Maintenance 4 Bedroom Home!
4 bedrooms or 3 plus study 2 bedrooms with Built in robes Formal lounge Ducted Air conditioning Gas Heating Bathroom and separate toilet Parking space Fully enclosed private rear yard Rear pergola $275 per week $1,650 bond
Investor growth is also a concern because investors often have smaller deposits than owner-occupiers and are more likely to speculate.
Investor access to mortgages tightens The chances of a significant property adjustment are rising as momentum builds for serious mortgage lending reform. Statistics for the big four banks reveal that more lending risk has entered the system, putting pressure on regulators to find a way to slow the market. Investor market share reached 35.3% in the March quarter – up from 34.2% the year before – while the share of interest-only mortgages rose from 36.8 to 38.8%. The increase in interest-only mortgages poses a risk because these loans are more sensitive to movements in interest rates than principal-and-interest loans.
Banks have increased their mortgage volumes by 8.6% & investor volumes by 12.2%, thereby increasing their exposure to Australian housing. All four of the major banks recently responded to regulatory concerns by making it harder for investors to access mortgages. However, credit ratings agency Moody’s has called for more reform, which would have the effect of further slowing the market. Moody’s believes banks will gradually revise mortgage risk weights over the next 18 months, while also increasing the quantity and quality of their capital holdings. This will probably mean less housing activity and reduced price growth.
Source: Real Estate Business
Recently Leased ANDREWS FARM 53 President Ave 3 bed 1 bath 1 car $250 pw PARA HILLS 12 Warrigal St 3 bed 1 bath 5 car $320 pw PARA HILLS WEST 89/51 Beafield Rd 2 bed 1 bath 1 car $240 pw PARAFIELD GARDENS 29 Armstrong Ave 3 bed 1 bath 1 car $275 pw SALISBURY EAST 26 Coolibah Rd 3 bed 1 bath 1 car $285 pw SALISBURY EAST 8/33 Harris Rd 2 bed 1 bath 1 car $280 pw Do you have another investment property we don’t manage? Ask us why you should consolidate your portfolio with Taylor’s First National.
Investors should crunch the numbers properly
First National Real Estate's CEO Ray Ellis says before investors walk away from purchasing a first or next investment property, they should crunch the numbers correctly by considering property depreciation. ‘Your next investment property may actually be more affordable than you think if property depreciation is correctly claimed’ said Mr Ellis. Astute investors usually consider the potential rental return of the property, the location in proximity to local services and facilities, local employment drivers and historical growth of properties within the area.
out the tax deductible costs and other deductions involved in owning the property such as property management fees, rates, interest, repairs, maintenance and property depreciation’ said Mr Ellis. ‘These deductions add to the investor’s net cash return and every deductible dollar comes back to the owner at their marginal tax rate’. Some investors fail to consider the financial benefit of claiming depreciation prior to making their purchase. The following example shows how one property investor identified an additional yearly cash flow of $4,992 from property depreciation.
‘They should also work
The property investor was considering purchasing a ten-yearold house priced at $560,000. They did some research and asked their Property Manager for a rental appraisal, which resulted in an expected rental income of $530 per week, or $27,560 per year. The investor was also able to work out an estimate of the costs involved in owning the property. Expenses including interest rates, management fees, rates, repairs and maintenance costs came to a total of $36,060 pa. After contacting a Quantity Surveyor specialising in property depreciation for a free assessment of the depreciation deductions they could expect, they found they would be able to claim approximately $13,500 in depreciation in the first full year.
Without claiming, the property investor would experience a loss of $103 per week during the first year of owning the property. By claiming, the weekly cost is reduced to $7, saving them $96 per week or $4,992 in the first year of ownership. ‘An investor who crunches the numbers prior to making a purchase will gain a better perspective on the affordability of the property and their future cash flow. Once they purchase the property, a Quantity Surveyor such as BMT Tax Depreciation can be engaged to prepare a property depreciation schedule to ensure depreciation deductions are accurate and maximised’ said Mr Ellis. http://www.firstnational.com. au/media/australian-realestateblog/2015/May/Investorsshould-crunch-the-numberscorrectly#sthash.7MzNskal.d puf
Can I add property I already own to my self-managed super?
This will depend on whether the property is residential or commercial. You can buy a commercial property that you already own and even borrow against it, as long as you meet the borrowing criteria i.e. a
maximum Loan to Valuation Ratio of 72% for residential property and 63% for Commercial Property. If you want to buy a residential property, it cannot be owned by a related party as it must be kept at ‘arms length’.
It must be purchased from and leased to an unrelated third party. We recommend you
seek independent professional financial advice before making any property investment decisions.
Property Management Taylorâ€™s First National manages one of the largest Property Management Portfolios throughout the North and North Eastern suburbs of Adelaide. We employ full time Property Managers, a Maintenance Co-ordinator, a Property Inspector, an Accounts Manager, a Sales Investment Consultant, plus administration staff and a full team of Maintenance Contractors to ensure all properties are managed in a professional manner. Our fully computerised and online banking system allows us to monitor where rents are paid to at the push of a button, hence ensuring landlords investments are returning their maximum potential. We are firm believers in the value of Real Estate as long term investment and through our guidance, many of our landlords are now multiple property holders. Whether you are investing in Real Estate for the first time, or are an experienced investor, we can assist you in building a rental portfolio and creating wealth through property investment. Why not PHONE US TODAY and speak to one of our property management team.
Are You Looking To Expand Your Investment Portfolio? Below is a selection of some of our properties currently on the market.
To view all of our properties, visit our website at www.taylorsrealestate.net.au
MOUNT BARKER Address on request Secure Low Risk Investment In the picturesque Adelaide Hills and adjacent to the Mt Barker-Hahndorf Golf Club, & only 35 minutes from the Adelaide CBD, this quality 4 brm, 2 bathroom home is sited on a huge 761 sqm north facing lot with easy care grounds in the sought after Mountain Glen Estate. Leased to the Defence Housing Authority through to September 2017 at $460 per week
Paul Taylor 8264 2223 $450,000
SALISBURY 8/24 Fleet Street Modern Contemporary Living Built in 2009, by RossDale Homes, this 3 bedroom townhouse many features include, large formal lounge, huge master bedroom with en-suite style 2 way bathroom, modern kitchen, meals and second living area, tiled laundry and 2nd toilet with wash basin, linen press and desk area, split system reverse cycle air conditioning, carpet to bedrooms and floating floors throughout main traffic area, pitched roof u/cover entertaining area, secure c/port with r/door, good size fully fenced rear yard, safe for kids and pets, low maintenance garden. Currently leased at $295 p/wk.
Gavin Armstrong 0408 802 350
Published on Jun 9, 2015