Aug 31

Investment property ‘hotspots’ moving further out

By Hugh Frame | best investment, Economy, Investment, Market, News, Real Estate | No Comments

Investment property ‘hotspots’ moving further out

As the growth in the last two years in areas Like Oran Park and Schofields have shown, investment property ‘hotspots’ are moving further out from the CBD.

The commuter hubs around our major cities were usually within a 20-50km radius from the centre of the city but as our major cities sprawl, we now have commuters who are regularly travelling up to 150km each day just to get to work.

Even The Gold Coast is prooving popular for Brisbane commuters

House prices and high rentals are forcing Sydney city workers to live as far away as Wollongong or Newcastle. In Melbourne, commuters are travelling into the city from Geelong, Ballarat and Bendigo and in Brisbane; the regular commute is common from the Sunshine Coast and the Gold Coast.

Demographer Bernard Salt says the burgeoning and established commuter hubs are growing, attracting “substantial populations”.

The principle reasons stated by Salt for commuter hubs extending out are improved train travel times and upgrades to road links. These certainly make the daily commute more manageable, but there are other reasons why we are seeing demand and price growth in some of these commuter hub areas.

Many of our new areas are being built as integrated towns or small cities in their own right. They are not just expanding commuter suburbs, but places with their own town centres and industrial estates and office blocks as well as other necessary infrastructure like schools and hospitals. They are becoming employment hubs in their own right, offering new local jobs to the increasing population.

Another factor is the rise of technology. Since the early part of this century, executives and business owners have been taking advantage of electronic communication to base families in life-style areas such as the Gold Coast where businesses can be run with a phone and computer with an occasional commute to Sydney or Brisbane. The idea of living away from the hustle and bustle of city life is very appealing to those seeking a beach or country lifestyle for a growing family.

So it’s not all about commuting and convenience to the jobs in the city. It’s often about lifestyle and affordability that contribute to investment property ‘hotspots’ moving further out. Read more: http://goo.gl/rd5QZs

Aug 30

0

Understanding the property cycle with the proof

By Hugh Frame | Auction, best investment, Investment, Market, property cycle, Real Estate | No Comments

Understanding the property cycle with the proof

Wouldn’t it be fantastic to find that all the information we are given by the real estate industry is totally true and utterly dependable? We do our best to assist clients in understanding the property cycle with the proof of what is actually happening in our markets.

This can be a very difficult task sometimes as one of the most powerful lobby groups in Australia, The Real Estate Industry, supply information to the media in such a way that it totally clouds the reality of what is happening in the actual market place.

Auction clearance rates are very high, but selling two properties out of 2 for auction is a 100% clearance rate!

It would be fantastic to see a property market that increased all the time by a nice 7%-8% on average each year. This would see property prices double every nine or ten years and would provide the property investor with the certainty so many seek. There is no doubt that good well-positioned property in the Sydney market has achieved growth of just under 8% for at least the last 40 years and after the last 5 years I believe that half the population of this great city now believe that property prices will just continue to grow year after year.

The same was true at the end of the last Sydney property growth cycle in 2003. The shock and surprise of many who bought off- plan investment property in particular, in 2002 and 2003, to settle in a market that was around 6% and more lower than its 2003 peak on completion in 2005/6 not only shocked but saw many lose tens of thousands of dollars in deposits on property they could no longer obtain a bank loan for as it was not worth the contracted purchase price.

Of course, we had a little ‘shock’ in Sydney when prices clearly went backwards in the first quarter of this year – an expected small correction at the end of a quite amazing growth period of almost 5 years. Since then we read every week of the fabulous clearance rates and the strength of the markets both in Sydney and Melbourne. This weekend’s headlines are very similar to the last 2 or 3 months Dr Andrew Wilson | Aug 28, 2016 1:48 pm Sydney spring auction market opens with more strong results for property sellers or maybe have a look at Melbourne Dr Andrew Wilson | Aug 28, 2016 12:49 pm Top start for Melbourne spring auction property market.

So all is looking fantastic for everlasting growth in these headlines. The reality is perhaps clearer to see in this little article published this weekend, http://goo.gl/cHfcMz. Receipts from residential stamp duty in July were 12 per cent lower than the same month last year, analysis by investment bank RBC Capital Markets shows. Year-on-year changes in monthly NSW stamp duty receipts were at the lowest mark in nearly five years.

Understanding the property cycle with the proof

So clearance rates may be high but we should understand that if only 2 properties are listed for auction and two properties sell by auction, then we have a 100% clearance rate. While current clearance rates are high, they are being calculated on around half the number of homes for auction than we had 12 months ago. The market is obviously significantly quieter when the State is seeing the lowest revenue on stamp duty in the last 5 years. This is nothing to worry about, it’s just another sign that the growth in the Sydney property market has almost certainly peaked and its maybe time to look towards another market that is more likely to be in its growth phase of the cycle.

Aug 23

0

Melbourne’s “investor stock” apartments to upgrade

By Hugh Frame | best investment, Building, Investment, Properties, Property Research, Research | No Comments

Melbourne’s “investor stock” apartments to upgrade.

Not before time, the Victorian Government is insisting on Melbourne’s “investor stock” apartments to upgrade. The draft design standards have been released alongside research showing 60 per cent of apartments recently constructed in Melbourne were of low quality. Interestingly this figure of 60% comes from the developers themselves who are admitting they are “not proud” of many of their recent developments.

Melbourne to improve its very poor unit design

Following on from yesterday’s blog on the large uptake of inner city units from downsizers, Melbourne CBD has been at the very other spectrum of this market. Many developers have been concentrating on increasing their profits by constructing small “shoe-box’ apartments that would not be permitted to be constructed in either of our other east coast capital cities.

It’s almost unbelievable that the new rules will insist that there must be light in the way of a window to each bedroom! Also surprisingly, every unit will require having at least one small storage cupboard; minimum 2.7m ceilings; some green space outside and bedrooms will not be permitted beside mechanical plant in order that residents may be able to sleep! This sounds all a bit third world but this is typical of some recent unit development in Melbourne. If you are not familiar with this market, have a look here: http://goo.gl/wXJWTD

The Sydney buyer has been known to complain about the small size of new units in Sydney, but at least there are minimum sizes, something the Victorian Government will still not legislate. In Sydney, one-bedrooms units must be at least 50 square metres, two-bedroom apartments at least 70 square metres and three-bedrooms at least 90 square metres.

In looking for a good apartment investment, we are always looking for units that will appeal to future owner-occupiers and not just term by term students! This means units must be spacious, have parking and storage space. We also insist on outdoor areas including an entertainment balcony. These may well be included in the new Victorian guidelines but the space constraints are likely to remain. However, there is likely to be a big improvement after Melbourne’s “investor stock” apartments upgrade. Read about the proposed changes here: http://goo.gl/iyXeDO

Aug 22

0

Why buy an apartment Property investment?

By Hugh Frame | best investment, domain, Investment, Market, Properties, Property Research, rent | No Comments

Why buy an apartment Property investment?

Why buy an apartment Property investment? Isn’t it the case that house and land makes a better investment with greater capital growth potential?

There are many reasons why a good apartment will make a better investment than a house and land. The first has to do with the old real estate adage, location, location, location. Most investors have a limited figure in dollars as to what they are willing to spend on an investment property and most are sensible enough to realise that demand on property, and therefore potential capital growth, tends to be much higher closer to the CBD’s of our major cities. In Sydney, you are now unlikely to [purchase a knock-down in the inner west for much less than $1.5 million, this is still plenty to buy a well-positioned two bedroom unit in a desirable inner fringe suburb.

Cost is of course, only one aspect. We must also be sure of our exit strategy on our ‘new’ property investment so we must be confident that there is a demand for the type of property we are purchasing, particularly in the future, when the time comes to sell.

The huge demand for rental of city apartments is two-fold and increasing. The current highest demand is coming from our younger Gen X and Gen Y demographic. If they can afford to buy, the first choice is a near-to-city apartment, close to all amenities and the largest employment hub in the state. If they can’t afford to buy, sharing with a friend in a rental property can not only be so much more convenient, but be substantially ‘subsidised’ by the huge savings in transport (now deemed to be around $22,000 per year) for an average family living in our west. (See: http://www.smh.com.au/nsw/-4jlfx.html)

Equally important is the large numbers of empty nesters moving out of large family homes to buy luxury apartments in boutique-sized blocks who are now making up a sizeable swathe of the prestige market. The e

Empty Nesters are moving to larger units with a sense of community

mpty nesters are looking for spacious open-plan living, with good views and close to water or park side in suburbs where they can walk to cafes, restaurants and shops; they’re also demanding excellence in design, security and comfort.

They are looking for quality apartments with a ‘sense of community’ which usually means gardens, pools and good shared areas where they can get to know and mix with their neighbours. The preference is usually for the smaller boutique buildings of less than 50 units although inner-city prestige units in the larger developments that are now a standard in our most expensive areas, can also be popular because of the location and community services provided.

This trend is happening around the country from Melbourne to Brisbane, not just in Sydney.

Often, the more affordable new house and land can take many years to see the growth of a good city apartment. As first home buyers move to an area of new land release, it is usually a lot less expensive for them to purchase a house and land package than purchase a second hand property due to the grants and stamp duty savings only available to brand new housing. A new home also allows the first home buyer to make some decisions in the build to give them a more bespoke home of their choosing. This can ultimately lower the capital gains potential of a new release area. So, why buy an apartment property investment? Better location leading to better possible capital growth; better tenancy demand, and an increasing demand for the right type of owner-occupier unit at the time of resale are just a few reasons.

What the experts say: “Empty nesters are looking for apartments in good locations and of a good size in those smaller blocks.” Andrew Scriven, Colliers International

What’s on trend: “They like smaller buildings with a sense of community, they like communal terraces or landscaping or pools and gyms.” James Coombe, Architects EAT

What to look for: “They certainly prefer small and intimate … that tends to be more personal so everyone knows each other.” William Smart, Smart Design Studio

Aug 16

0

Tax savings on property investment

By Hugh Frame | best investment, finance, Financial, Negative Gearing, Properties | No Comments

Tax savings on property investment.

Most property investors are aware of the substantial tax savings on property investment that can be legally claimed against the costs of holding an investment property. This is the time of year when most property investors are reconciling their expenses on investment property to send to their accountants in order to receive the substantial tax refund they are probably now due.

It’s also the time of year that the Australian Tax Office issues statements about the type of deductions they will not consider and also deductions that are sometimes claimed and will not only be refused but may also result in fines! You can read more about this below.

It is timely to remind current property investors that they should also have tax variations in place for this financial year. Too often we come across clients who are finding their new investment property is eating into their monthly cash flow and finding that the investment property they now have is affecting their lifestyle. To be ‘loosing’ or spending an ‘extra’ maybe as much as $1000 per month on an investment can drain resources! This ‘loss’ is then magically returned in the form of a large tax reimbursement of around $14,000 come August or September after submitting their annual tax return. Of course it’s great to get this lump sum but better to get the extra $1000 or so each month in your pay packet rather than having to wait 12 months to claim it back. This is what a TAX VARIATION can do for you and it is highly recommended that you have your accountant put one in place for you now if you haven’t already done this.

The list of the top 5 dodgiest deductions became claimed this year are described as,

Transportation of ‘bulky goods’ that can be stored at work
Holiday travel that is not work-related
Fake attendance at a ‘work’ conference
Car-related travel that there is no proof of
Rental deductions with no valid basis

Basically if you don’t own an investment property, and you want to know more abouit tax savings on property investment, have a look at our FAQ’s – “What is negative gearing and how does it work” click here https://propertyinvest.co/property-investment-frequently-asked-questions-faqs/

For more information on dodgy deductions, read more: http://goo.gl/q833rr

Aug 15

0

Census meltdown does not help investment property research

By Hugh Frame | best investment, domain, Economy, Market, Property Research, Property Solutions, Research | No Comments

Census meltdown does not help investment property research

Census data is one of the most important sources of information used by property researchers and the census meltdown does not help investment property research. The big question now is just how complete is the new data acquired in the 2016 census going to be in assisting planning over the next 10 or 20 years?

Regardless of the culture described as “Reckless” at the top of the Bureau of Statistics, it is essential that trust between the citizens of this country and the ABS be renewed as quickly as possible in order that the necessary information used for the development of the future of this country is collected fully and accurately with the blessing and trust of every Australian.

Even before the on-line debacle of census night the ABS was not prepared to explain why it now wanted to retain names. It would save millions by posting login codes to most of the population rather than delivering forms. Had it delivered, or even posted, forms it would have had a backup. Instead it gave most of Australia only one way to submit census forms and threatened fines of $180 per day for people who didn’t comply. The result is we have now a group of elected representatives declaring to the masses who vote that they will not comply to filling in the form, even if it means paying a fine. What chance now of having anything like a 95% return on census information?

Lime Property Solutions Property Research, like other property research groups, plays a critical role in finding the best property investment for clients. Much of the research is analysing professional data supplied or purchased from Australia’s most respected property research agencies such as Australian Bureau of Statistics and BIS Shrapnel. Much can also be found by daily scrutiny of quality media such as the Financial Review. This outsourced research involving the growth and development prospects of different regions and locations, is assessed by Lime by visiting areas and increasing our knowledge through meetings with local developers, real estate agents and local Chamber of Commerce representatives. Once our research is satisfied with an area or suburb we seek out suitable property that meets our strict selection criteria. Like all research bodies, full and accurate census information is an essential resource to do this job. The census meltdown does not help investment property research!

Olympic seven’s gold medal and buying an investment property

By Hugh Frame | best investment, Investment, News, Properties, Property Research | No Comments

Olympic rugby seven’s gold medal as a victory for women’s sport

Team play will make Buying Investment Property so much easier! Olympic seven’s gold medal and buying an investment property

“Australia made history by winning the first gold awarded in women’s rugby sevens at the Olympics with a tight 24-17 triumph over trans-Tasman rivals New Zealand at the Deodoro Stadium.

The Australians had been pre-Olympic favourites, courtesy of winning the 2015-16 World Series, but were forced to weather an early attacking storm from New Zealand before prevailing with a four tries to three win.

Rugby sevens is among the fastest growing sports in the world and the number of women participating in the sport is enjoying a boom.”

These Australian women are certainly a supreme example of how a good group of individuals can become world beaters in an integrated team. Excellent team work will always provide a much better outcome than the sole individual. It’s obvious in any Olympic team sport but maybe not so obvious in the Men’s 400m freestyle with Gold to Australia’s Mack Horton. Even in these supreme individual performances there is a huge engaged team of parents, coaches, physiotherapists, sports psychologists and team mates behind the individual performance.

As in sport, your financial investment success can be improved by forming a strong team of professionals around you. This is part of the standard service Lime property Solutions provides to our clients.

Olympic seven’s gold medal and buying an investment property. Investment in the best locations with investment properties

Here at Lime Property Solutions, we are an industry leading comprehensive investment company with ample experience and expertise. If you are considering buying investment property, we can assist you in fulfilling your needs and goals. We strive for excellence and our team of professionals continually aim to meet and exceed your expectations. We prioritise your needs and requirements to ensure your satisfaction. We offer exceptional buying investment property services that will lead to the right path.

Our mission is to partner our clients in building a substantial diversified property portfolio with minimal risk and maximum growth. As part of our buying investment property services, we provide you with a unique property investment strategy in line with your personal situation. We source the excellent properties that meet your buying investment property criteria. In addition, we manage and organise all your support services for now and your future.

We have been in this industry for many years now and with over 30 years of combined experience, we carry an impressive portfolio of past success stories. When you are interested in buying investment property, we have got you covered. Our team will help you through every single step of the process and ensure you are equipped with the information, tools and resources to achieve your goals.

If you would like to read more about our hugely successful rugby sevens Gold Winning team, try here: http://www.abc.net.au/news/2016-08-09/womens-rugby-sevens-rio-2016-victory-for-womens-sport/7704298

Aug 09

1

Ground floor apartments make a great investment property

By Hugh Frame | best investment, Investment, Properties, Property Research, Real Estate | No Comments

As demographics and life styles change, investors are now realising that ground floor apartments make a great investment property. It was only 10 years ago that generally we’d find the least attractive units for investors in a development were on the ground floor. Usually they were reasonably priced and had a larger area due to a small courtyard but the general impression from buyers and sellers was that renters prefer not to be on the ground floor.

With extra space, ground floor apartments make a great investment property

The ground floor apartment was often felt to be too noisy with not enough privacy and of course, being on the ground floor, they were ‘easy’ to break in to so security was a concern! The security issue always had me wondering in a modern apartment block. It struck me that the security on a ground floor unit, with a common locked door to enter through before reaching the entrance door of the unit, always seemed a lot more secure than the average house and land where many of the property investment buyers had lived happily with no security problems for many years!

Ideas have changed dramatically in the last few years and we now find that ground floor units are often the first to sell in any reasonable apartment development. They are becoming top choice for an ageing population and more people looking for a mid-point between a unit and a house as rising house price inches the backyard dream further out of reach. Also, moving in to a smaller apartment with a courtyard gives the renter or owner-occupier more space and it is very likely to be designed to offer an additional outdoor room.

The younger Gen X and Y, choosing to live in a more affordable unit rather than the traditional house with garden, enjoy the easy access for their larger sporting equipment like golf clubs or surf boards, or even more importantly, a place for a pram, particularly secure where a baby can sleep in the fresh air. Of course, the fact that the lift may break down now and again makes the ground floor even more advantageous. In some developments, we are seeing the ground floor units becoming not only the largest in the development but also the most sought after and certainly more expensive than the penthouse!

The ground-floor apartment with a courtyard that is secure and quiet is now a particularly attractive and scarce property investment. It’s something to look for in your portfolio, not something to avoid, ground floor apartments make a great investment property! Read more http://goo.gl/TT7JhA

Aug 02

1

Tax minimisation and tax avoidance

By Hugh Frame | best investment, Economy, Financial, Negative Gearing, Uncategorized | No Comments

Tax minimisation and tax avoidance

It’s that time of the year again when we go to see our account and sort out our tax for the previous financial year 2015-2016, it’s important we do all that’s possible to look at tax minimisation while keeping in mind that tax avoidance is a serious offence!

So what’s the difference between tax minimisation and tax avoidance? It’s best this question is answered by a qualified tax agent and it is very highly recommended you speak to your own tax advisor about this, but basically tax minimisation is a perfectly legal way of reducing tax through genuine expenses while tax avoidance is just as the name suggests, finding ways of not paying tax which is legally due to the Australian Tax Office.

I find it very difficult to discuss tax minimisation without mentioning the late Kerry Packer, who famously said,

“I don’t know anybody that doesn’t minimise their tax … Of course I’m minimising my tax. If anybody in this country doesn’t minimise their tax they want their head read. As a government I can tell you you’re not spending it that well that we should be paying extra“.

One of the most efficient ways of minimising tax, of course, is to purchase an investment property. As we mentioned in yesterday’s blog, with the exceptionally low interest rates we now have and the high possibility of finding a relatively high yielding, well located investment property, it is highly likely that your new property investment will be more than fully [paid for by your tenant and the tax you can save through legal tax minimisation strategies such as negative gearing.

Just as a reminder for those who have already bought a property investment, you should have your tax variation completed by now for financial year 2016-17 to ensure that you get the ‘saved’ tax in your fortnightly pay packet now rather than waiting until the end of the tax year to claim it all back.

For more information about the difference between tax minimisation and tax avoidance read: http://www.smh.com.au/money/-gqb4w9.html

Aug 01

1

Baby Boomers to spark rises in regional cities

By Hugh Frame | best investment, Economy, Investment, Market | No Comments

Baby Boomers to spark rises in regional cities

The managing director of a minor national research company, Mr Simon Pressley, is suggesting that we may see some significant growth in interest from baby boomers wanting to sell up in the city and move to one of Australia’s many regional cities.

Mr Pressley has specifically identified 40 country towns that could outshine growth in our capital cities over the next few years.

Baby boomers were responsible for the huge increases in coastal property prices in the very late 1990’s and early 2000’s as the older boomers started to scale down or take early retirement. It was around this time that Bernard Salt, the well-known demographer, introduced us to the terms ‘sea-changers’ and” tree-changers”.

Move to the country and live a very comfortable retirement!

While baby boomers have been officially retiring at age 65 since 2011, Mr Pressley is identifying the group again, particularly those on the edge of retirement, to become part of a surge in buyers seeking affordable homes in regional areas over the next 15 years.

He suggests that “maybe hundreds” of thousands, could leave the capitals as superannuation fails to sustain them into retirement.

The huge increases in property prices in our cities and the fact that many do not have sufficient retirement savings will leave downsizing as a practical and in some cases the only option available to many who wish to maintain their current standard of living.

The most popular places Boomers are likely to move to, are most likely those with good lifestyle drivers as well as excellent health care facilities. In other words, places with a “pseudo-capital city” feel to them. A good spacious home in such a place may cost as little as $400,000 leaving the average home-seller in Sydney with a profit of more than $500,000 on which they can live!

Some of the top places in each state are identified as Wagga Wagga (NSW), Geelong (Vic), Albany (WA), Devonport (Tas), Alice Springs (NT), Port Lincoln (SA) and Cairns or Townsville in Queensland. Full list and story can be found here: http://goo.gl/r9FgHB

August 2016

Investment property ‘hotspots’ moving further out

Understanding the property cycle with the proof

Melbourne’s “investor stock” apartments to upgrade

Why buy an apartment Property investment?

Tax savings on property investment

Census meltdown does not help investment property research

Olympic seven’s gold medal and buying an investment property

Olympic rugby seven’s gold medal as a victory for women’s sport

Ground floor apartments make a great investment property

Tax minimisation and tax avoidance

Tax minimisation and tax avoidance

For more information about the difference between tax minimisation and tax avoidance read: http://www.smh.com.au/money/-gqb4w9.html

Baby Boomers to spark rises in regional cities

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