Blog articles on investment property

Jan 11

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Huge property investment success can put you at risk

By MLKtech | Uncategorized | No Comments

So you have invested in a home in one of our east coast capitals over the last two or three years and you don’t realise that your huge property investment success can put you at risk! The warning comes from some financial experts in today’s media.
(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home.)
Most of us are protected from very risky investment by The Australian Securities and Investments Commission (ASIC). ASIC offers client consumer protection to retail investors where financial advisors deliberately miscategorise their clients or when companies fail to properly disclose their businesses. However these protections are not available to sophisticated investors and this is where the problem now lies! Unknown to many successful mum and dad property owners, and in particular successful property investors, the growing assets you have acquired over the last couple of years re-defines you as a ‘sophisticated investor’.

What is a ‘Sophisticated Investor?’
A sophisticated investor is a type of investor who is deemed to have sufficient investing experience and knowledge to weigh the risks and merits of an investment opportunity.
For certain purposes, net worth and income restrictions must be met before a person can be classified a sophisticated investor. The distinction makes an investor eligible to buy into certain investment opportunities, such as pre-IPO securities, that are considered “non-disclosure” or “non-prospectus” issues. Typically, a sophisticated investor must have either a net worth of $2.5 million or have earned more than $250,000 in the past two years to qualify.
Sophisticated investors may have to prove their net worth prior to being eligible to purchase certain security types. Investors will often have their personal accountants send this proof to the brokerage firm. Sophisticated investors are the dream clients of most financial services firms, as they generate much higher fees than retail investors. Read more here.
Certain assumptions are made about sophisticated investors: that they can hold their investments indefinitely (the funds do not need to be liquidated for cash needs), and they can assume a total loss of investment principal without causing severe damage to their overall net worth. You may have made this $2.5 million simply on the value of your own home and one or two investment properties, do you really want to be classified as a sophisticated investor and lose your ASIC protection?
(If you want to know more about property investment and asset growth, contact us now at info@limepropertysolutions.com.au.)

Jan 09

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Is Property investment a better investment than shares?

By MLKtech | best investment, Investment, Properties, rent | No Comments

The beginning of a new year and another perennial article is published in today’s paper asking the age old question “Is property Investment a better investment than shares?”

The answer, of course, is ‘yes’, even when the study methodology makes it as difficult as it possibly can for property to exceed shares!
(Please contact us at info@limepropertysolutions.com.au. for further information or the chance to discuss this and other issues in the comfort of your own home.)
The largest problem in trying to compare growth and return in investment property to the share market is always the methodology used in the study. The article printed in today’s news “Rent or Buy. The evidence is in” (read article here) is at best confusing although the result is perfectly clear – property is the better investment!

The article is not really about investment at all. As the title suggests, it is asking the question “Are you better off renting or better off buying your own home?” Most people would have enough common sense to know that you are actually better off owning your own home (as the study also finds!) but the confusion arises when the comparison is made between investing all the funds you don’t spend on buying your home into the share market thus, in my mind, making the comparison one of investing in property to investing in the share market. This is NOT the case in the methodology scenario described. Why you ask? Because a well set up investment property for someone earning around $100,000 per year would possibly deliver an additional few thousand dollars per year in positive cash flow – it would not be a cost and certainly not a significant cost.

When we examine the idea of ‘rentinvest’ (see earlier blogs for more details) where we continue to rent but also buy a property investment, then the article really makes no sense at all in the real world. We do not think your own owner-occupier home is a real investment – it is just something we must have to live in. The only way to measure share investment against property investment is to compare apples to apples; that is make sure we are comparing an investment property return against a share market return.
However, whichever way we look at it, property investment makes a great deal of sense!

(If you want to know more about property investment that can be cash positive after tax from day one, contact us now at info@limepropertysolutions.com.au.)

Jan 03

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A healthy and prosperous 2017 to all our property investors – Happy New Year!

By MLKtech | Uncategorized | No Comments

So it’s another year and time to wish a healthy and prosperous 2017 to all our property investors – Happy New Year!
New Year resolutions often include goals for becoming wealthier and doing something about looking after our financial future. They are great resolutions to make and, unlike many other resolutions, if we don’t do anything about it, we don’t feel bad as we don’t really notice our inaction until nearer the end of the year!

The big thing about keeping a resolution is Taking Action! Changing what you do is essential if you wish to change your current outcomes ….. and as far as wealth creation is concerned, there is no easier way than property investment.
(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home.

New Yorkers have just celebrated their 10th Good Riddance Day; maybe some of us need to do something like this in the privacy of our back yard or at a local park!

Basically a huge shredder was set up in Time Square where people could publically destroy their physical and emotional ‘baggage’. People threw in notes and placards, pills and bills, and piles of clothes; anything representing their baggage of 2015. A line as far as the eye could see stretched all down Broadway.
The simple rule was that any member of the public could come to destroy, “any unpleasant, embarrassing and downright forgettable memories from 2016”. This was done with passion shredding papers with the words ‘NEGATIVITY” and “PROCRASTINATION” written on them, smashing up IT equipment with hammers, destroying credit cards and throwing out mementos from old relationships.

Good Riddance Day has its roots in an old Latin American tradition where people sew objects on dolls and set them on fire letting their pain and frustrations dissipate in the smoke! Read about last year’s event here

And what became of all the shredded rubbish? It is recycled and used as confetti as the famous Time Square Ball dropped at midnight.
Get yourself moving forward again in 2017 here in Sydney and look at doing something different – A Happy and prosperous New Year to you all!

If you want to know more about safe capital growth investment over the next few years contact: info@limepropertysolutions.com.au.

Dec 20

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Turn $15,000 into a staggering $10 million through property investment

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

$15,000 into a staggering $10 million through property investment

Scott and Mina O’Neill, aged 28 and 29, own 25 properties worth more than $10 million across the country
The married couple purchased their first home together in 2010 in Sutherland, south of Sydney
They have built their property portfolio by rentvesting, renting their own home and investing in others

A young couple in Sydney’s south have turned $15,000 into a staggering $10 million through property investment.

It’s a great Christmas story and one any young couple should be thinking of repeating starting in 2017!

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home.)

Scott and Mina’s story can be found here http://dailym.ai/2gNPBDS

It’s a story many other young couples could share and one many have shared, turning a relatively small savings account into a multi-million dollar portfolio. Their story is almost a perfect duplicate of the information to be found in the Lime property Solutions free eBook which you can download free from here: www.limepropertysolutions.com.au

To turn $15,000 into a staggering $10 million through property investment, the O’Neill’s have used the strategies Lime teaches and recommends, particularly with understanding markets and market timing. They have, in a relatively short period of time, built a portfolio of 25 investment properties while they continued to rent their own home. Lime Property Solutions can explain a few things to clients which would make their portfolio even less risky and almost certainly better performing than what the O’Neill’s advocate. For example, a better understanding of yield and return can make a portfolio much better performing over a relatively short time-span.

If you want to know more about how you can build a multi-million dollar portfolio through property investment, write to: info@limepropertysolutions.com.au.

This couple manage to make their millions through rentvesting.

Rentvesting refers to purchasing an investment property but continue renting. You could turn $15,000 into a staggering $10 million through property investment!

Dec 15

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Will we see Apartment prices drop in Sydney and Melbourne?

By MLKtech | best investment, Building, chinese investment, foreign investment, Uncategorized | No Comments

The Sydney and Melbourne unit markets in particular have been buoyed by Chinese investors, but six months on from a bank clampdown on foreign lending, will we see apartment prices drop in Sydney and Melbourne?

The word has been that apartment prices in Sydney and Melbourne may drop because of over-supply but the real danger may be the thousands of Chinese property investors who bought apartments in Australia are now scrambling to save their investments. Already, a number of apartments bought off-the-plan by Chinese investors have failed to settle due to the buyers being unable to secure finance for settlement.

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home.

In these cases, the developer is entitles to keep the 10% deposit paid at exchange of contract and on-sell the apartment. In many cases it makes sense to reduce the price of the apartment for a quick sale. With possibly hundreds of new apartments being on-sold ‘below original cost’, this would soon affect the whole city-wide apartment market. Read more: http://www.abc.net.au/news/2016-11-28/chinese-property-investors-worried-after-big-banks-change-rules/8062530 Related Story: Tough new loan laws see Chinese investors opting for private lenders

In mid-year year, the major lenders stopped lending to offshore investors in a bid to reduce risk. Lenders were worried by some applications with fraudulent proof of income, and wanted to rein in lending to avoid being too reliant on Chinese borrowers. These changes are now having a major impact on the property market, particularly in the foreign investor’s favourite locations in Sydney and Melbourne property investment hotspots. For the estimated 50,000 Chinese buyers involved there has been crushing disappointment. It is estimated that up to 30,000 investors are affected.

As well as our Australian lenders, China’s banks have cracked down on money heading abroad, so investors have been left trying to borrow from other Asian banks. With up to 30,000 units unable to settle, it is difficult to see why this will not affect the major city apartment markets. We are more than likely see Apartment prices drop in Sydney and Melbourne over the next couple of years.

If you want to know more about safe growth investment over the next few years contact: info@limepropertysolutions.com.au.

Dec 05

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Stamp Duty Must be Reduced

By admin | best investment, Economy, Financial, Investment, Negative Gearing, News, Property Solutions, stamp duty | No Comments

Stamp duty must be reduced

NSW Planning Minister Rob Stokes has recently broken ranks with his Liberal colleagues and suggested that the federal government should make changes to negative gearing. It’s all part of the Sydney ‘affordability’ debate but it is a reduction in stamp duty which is a much better way to improve affordability. Most studies into negative fearing show that its removal is unlikely to drop property prices by any more than half of one percent, yes just 0.5%.

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home.

On a very low-priced Sydney home at $550,000, the stamp duty payable to the State Government is over $20,000. Ion the same property, it would likely reduce in value by just $2,750 if negative gearing incentives were removed.

Mr Stokes argued that adding new supply to the market would not make property affordable on its own and suggested changing tax benefits for investors should be changed. In our view, it’s a pity Mr Stokes could not do the arithmetic in the last paragraph and then realise that he and his party can actually do something now to assist affordability rather than doing the political usual of putting it in the ‘too hard’ basket then passing the problem off to someone else. Read more : http://www.domain.com.au/news/stamp-duty-adding-years-to-the-depositsaving-plans-of-sydneys-home-buyers-20161202-gt2jjz/

Property Council of Australia chief of policy and housing Glenn Byres says the $40,000 an average home buyer in Sydney pays on top of their purchase price in stamp duty is a concern. In just four short years, the NSW Government’s stamp duty revenue has doubled from $4 billion to $8 billion. Stamp duty must be reduced if we are to help first home buyers.

If you want to know more about how you can save on stamp duty buying a new property investment contact: info@limepropertysolutions.com.au

Nov 22

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The Block is a warning for renovators

By Hugh Frame | Auction, best investment, Market, News, Property Research, Real Estate, Research | No Comments

The Block is a warning for renovators

It seems to be easy money, buy an old place, renovate and make a fortune but the reality is the Block is a warning for renovators. Most, if not all of the many series of The Block have actually made huge losses but the average viewer is left with the feeling that renovation is a great way to make money!

The worry is these shows give a totally unrealistic expectation to budding renovators.

Washington Brown, Lime’s preferred supplier of depreciation schedules (www.washingtonbrown.com.au) has recently run some numbers on the supposedly successful sales in the recent Port Melbourne series and the numbers do not add up!

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home.

The following is from The Washington Brown Report:-

“ From a financial point of view the development, which consisted of transforming a 1920s art deco building into a luxury apartment block, was one of the worst he has ever seen.

While I understand the magic of television, Channel 9 has outdone David Copperfield in creating the illusion of a profit to the public!

Let’s look at the numbers:

According to reports Channel 9 bought the site for around $5 million, which allowed for 6 apartments. Only 5 were sold on TV and for calculation purposes let’s say the acquisition costs is $4.2 million.

The construction cost and depreciation allowances totalled over $11 million, for the 5 apartments alone.

That’s $15.2 million alone in construction and acquisition costs.

It’s worth noting that under the Income Tax Assessment Act 1997 the initial vendor (ie. the developer) has an obligation to pass on the actual costs of construction to the purchaser, where the costs are known.

Let’s not forget there’s then a variety of other costs involved in buying and selling, and undertaking a property development, including:

Stamp duty
GST on the sale
Demolition
Marketing
Agents’ fees
Legal fees
Interest
Rates

Whilst some of these costs may have been avoided due to contra deals, the bulk would have to be outlaid by Channel 9.

I estimate these additional costs to conservatively be $2 million, which brings the total cost to $17.2 million.

The Block’s total sales realised just a little over $12 million, leaving the development in the red by around $5 million, yet it has been indicated that profits of up to $715,000 were made by the contestants.”

Just Google “How much did the block cost channel 9” , probably best to go to page two of your results and read some of these articles. It is unlikely that any of The Block series has actually made money and the The Block is a warning for renovators, not an endorsement to make money!

If you want to know more about the pitfalls of renovation and how to make money from property without the work and hassle contact: info@limepropertysolutions.com.au.

Nov 21

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What should you be looking for in a new investment property?

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

What should you be looking for in your new investment property?

It makes sense to understand changing demographics because what you buy today as a ‘good’ investment property may not be so good in 10 or 20 years when you decide it’s time to sell, so what should you be looking for in a new investment property?

An investment property that works today may not be as desirable as a home for our population of tomorrow so it’s important to keep track of changing demographics and buy an investment that is most likely to appeal to tomorrow’s owner occupier market.

Just a couple of decades ago, the average Australian household had around five people living in it. Just five or six years ago, the average home had just over 3 persons per household. This has increased slightly as more and more older children decide to stay at home for much longer. The big family for most Australians is a thing of the past, in the 2012 census it was stated that most households within a small radius of the centre of most of our cities had less than two persons per household!

The growing demographics of home owners and renters, the growth group for new households comes from:

Young professionals
Young couples
Empty nesters
Retirees
Single parent families

It would seem that with older children staying at home longer, as well as the above growth demographics, it’s important to consider their needs for a good investment property.

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home.

There is a move towards the city centre with these groups and the need for well-designed units and townhouses with a bathroom each is becoming an essential for shared living, whither with a relative or a friend. Good-sized bedrooms are also an essential with room to entertain.

Nearly 60 per cent of those aged 15-29 are still living with their parents across the 35 wealthy member nations of the Organisation for Economic Cooperation and Development. In Italy, Slovenia and Greece more than three quarters of that age cohort have not yet flown the coop. Australia’s proportion has reached 54 per cent. Read more https://goo.gl/B3U0kW

This is a trend that is unlikely to change for some years, particularly as house and unit prices continue to rise. Make sure you buy an investment property that will work for you in the future, do the research now before you buy. So what should you be looking for in a new investment property? Consider the future demographics that may eventually want to purchase your investment property.

(Please contact us at info@limepropertysolutions.com.au for further information and the chance to discuss this and other selection criteria issues in the comfort of your own home.

Nov 15

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Is a unit a better investment than house and land?

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

Is a unit a better investment than house and land?

Is a unit a better investment than house and land, one of the most common questions we are asked by property investors? It’s amazing the number of Real estate homilies that are so completely inaccurate yet so many people are prepared to believe them.

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home.Location will make the difference

Location will make the difference, not building type

One of the common ones is that we should only buy house and land, the old saying being that “land appreciates but buildings depreciate”. I wonder how you would get on trying to convince Hollywood star Russell Crowe of this this one. Russell has opened the doors of his Finger Wharf apartment in Woolloomooloo to select off-market buyers ahead of an official listing early next year.

His price expectations on the landmark harbour front apartment are $30 million, which would break the current national apartment record of $25 million…… And the land content of this apartment is exactly zero as it is built on a wharf above water. The original selling price when bought off the plan in 1998 was $9.8 million. Crowe made the purchase in 2003 setting a Sydney record of $14.35 million. Current neighbours include billionaire Lang Walker and broadcaster John Laws.

Will Donald Trump burst the Australian housing bubble?

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

Will Donald Trump burst the Australian housing bubble?

Speculation is rife on everything financial, with Donald Trump at the wheel of the world’s largest economy; the biggest of these questions for the property investor is will Donald Trump burst the Australian housing bubble? Read more: http://www.smh.com.au/business/the-economy/is-donald-trump-going-to-burst-australias-housing-bubble-20161111-gsnee0

Will Donald Trump affect Australian property prices?

It was written at the weekend, “given his propensity for lying, exaggerating and generally raving, nobody can know what Donald Trump will actually do as president. He probably doesn’t know himself.” The article does not confess to general raving and exaggerating itself in that there is absolutely no evidence of an Australian housing bubble! Australia is the largest island nation in the world, it includes WA and FNQ, Tasmania, SA and everything between. There is a possibility of a ‘housing bubble’ in our two largest cities, but in many other places, prices are less than what they were 10 years ago. This is in Australia and we can’t talk about an Australian bubble, that’s Donald Trump talk!

(Please contact us at info@limepropertysolutions.com.au for further information or the chance to discuss this and other issues in the comfort of your own home.

According to the bond market reaction, Trump may burst the Sydney/Melbourne housing bubble by causing interest rates to rise.

The Trump plan, in its essence, is very simple and markets clearly believe it will work. He is planning a major infrastructure investment and, unlike Australia, he won’t let public servants constantly get in the way of the infrastructure momentum. But he will re-fire the American steel furnaces, because he doesn’t plan to use Chinese steel.

Trump also plans to lower the US tax rate and suck the enormous sums that American corporations are holding overseas back into the US. Along the way he will make it harder for Canadian, Mexican and Chinese exporters to tap the US market. He says that will be done via higher tariffs. The world is going to move from an increasingly globalised one to one where nations will look more inwards. But given today’s communication and transport systems there is a limit to this change.

The more common fear is that he could start a trade war with China that would cause a global recession which would obviously affect Australia. That would not be a good way to achieve lower housing prices. Hopefully there is enough sanity left in Congress to prevent such madness and just consider the more benign interest rate story.

The last Reserve Bank board meeting was forecasting another RBA rate cut or two by the middle of next year. Trump’s policies, if implemented, will cause a period of inflation resulting in RBA increases and that could certainly cool down the Australian housing market.

So will Donald Trump burst the Australian housing bubble? The media are always looking for stories which may deliver this result, time will tell but maybe they are on to something here that will see prices stabilise in Melbourne and Sydney.

If you want to know more about possible ‘property bubble bursts” or discuss buying new property investment, contact: info@limepropertysolutions.com.au.

Huge property investment success can put you at risk

Is Property investment a better investment than shares?

A healthy and prosperous 2017 to all our property investors – Happy New Year!

Turn $15,000 into a staggering $10 million through property investment

Will we see Apartment prices drop in Sydney and Melbourne?

Stamp Duty Must be Reduced

The Block is a warning for renovators

What should you be looking for in a new investment property?

Is a unit a better investment than house and land?

Will Donald Trump burst the Australian housing bubble?

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