rent Archives - Lime Property Solutions

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.)

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 10

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Is it really time to be asking for a rental decrease?

By Hugh Frame | best investment, Economy, Real Estate, rent | No Comments

Is it really time to be asking for a rental decrease?

This attached recent article from Jessica Irvine of sometime ABC fame, is suggesting renters should now be asking for rental decreases but is it really time to be asking for a rental decrease?

I believe that while there is some truth in the story, it is not the time for a huge number of renters to be asking for a decrease.

The data she uses is all sourced from NSW, particularly the NSW Tenant’s Union and of course, this data seems to support the fall in rentals in Perth and the likely fall in rentals in inner Brisbane and Melbourne!

(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)

I’d suggest to any renter looking for a new property or a new lease that they use their own common sense when negotiating. In Sydney and Melbourne in particular, yields for landlords (yield being rent paid) are now at their lowest ever. Landlords are not inclined to lower their returns even more. Common sense, in this instance, just means having a look around your area and on real estate web sites for comparable property for rent. If you are looking at a unit, then perhaps in some areas you may find that there are many similar units available for rent. In the knowledge that you can easily find another place if necessary at maybe a lower rental, then you MUST try and negotiate a decrease on your current rent or try for a decrease in the advertised rent. If the landlords are desperate, they will negotiate.

If you are sitting in a nice little townhouse or villa, or even a house and land close to the city or even in the middle suburbs of your city, you may find that you are lucky to have the property you are currently renting. There are many areas with plenty of rental properties, but make sure you are comparing apples to apples. It can still be very difficult in many areas of all our east coast capital cities to find the type of home you wish to rent, particularly if it is not a unit, and if there is a scarcity, be prepared to pay for it. Your landlord will easily find someone else who is prepared to give them what they want if you won’t! Maybe it is not time to be asking for a rental decrease.

If you want to know more about rental yields in certain areas or discuss buying new property investment, contact: info@limepropertysolutions.com.au.

Sep 19

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Choosing an investment property and understanding demographics

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

Choosing a good investment property and understanding the demographics

Choosing an investment property and understanding demographics of a neighbourhood go hand in hand.

When we are looking at an area or suburb for investment, it is essential to have a look at the demographics of the neighbourhood to understand the age groups attracted to the area and the likely incomes and type of housing that will be the most attractive for the majority of people wanting to rent and wanting to buy as owner-occupiers in the area.

It makes sense to be buying a modern two-bedroom apartment close to the city for your investment if you know that a large percentage of the population in the area are young professional renters with a reasonably high disposable income who can afford to pay the rental your investment should achieve.

Report found Cardiff as the most segregated city in England and Wales

Likewise, in areas where we see large numbers of retirees moving to smaller single level villa developments, wanting the added security of a gated community, then perhaps that type of property may make the best investment in that type of area.

A recent report from the UK may be of some interest to Australian planners also as we see the median age of residents in our cities fall considerably as young Gen x and Gen Y renters move closer to our city centres. The article entitled “Housing crisis ‘is driving young and old apart as different generations are being forced to live apart‘ , highlights the fact that age segregation is now an planning issue in many UK cities.

The study found that:

Under-30s are stuck renting in Britain’s regenerated city centres
In a rise in ‘age segregation’ the middle-aged dominate the coastal regions
The lack of affordable housing in many areas has damaged society, says a report by the Intergenerational Foundation

Recognise any of these issues for our Australian cities? Older people congregating in smaller towns and outer suburbs has implications on where to place health services and other planning issues as well as some of the more obvious problems ‘age segregation’ may cause.

Choosing an investment property and understanding the demographics of a neighbourhood is essential in understanding the type of property likely to work best for you both for finding renters immediately and for future capital growth in having the type of property most likely to appeal to future owner-occupiers. Read more: https://goo.gl/CbaxP7

Aug 22

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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

Jun 27

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Rentinvestor means you are interested in tenancy and landlord issues

By Hugh Frame | best investment, Property Research, rent | No Comments

Rentinvestor means you are interested in tenancy and landlord issues.

As more and more new owners of investment property continue to rent, being a Rentinvestor means you are interested in tenancy and landlord issues, you don’t want to be the “tenant from hell”, we often read about but you certainly want to avoid the” nightmare landlord”.

It would seem that we have a disproportionate number of tenants whose landlords are deciding to manage the properties themselves and this is very often a sign to keep well clear of becoming a tenant!

As a Landlord, do not try to manage your own property investment

Landlords who do not wish to pay a qualified and experienced agent always have a reason for not using an agent. The first of these might just simply be that the Landlord does not want to spend the tiny percentage of his rental, a cost that is fully tax deductible, on agent fees. I’d say this sign of financial ‘tightness’ would suggest you may be contracting yourself with someone who may not be keen on spending any money on necessary and urgent repairs as they come along. In some cases, landlords will decide to manage their own investment property in order that they can just flaunt the Residential Tenancies Act and they cannot find an agent to work for them.

Even if you find Landlord/manager who seems to do a reasonable and fair job, many have problems in obtaining a refund of their rental bond. Often the bond has not been lodged with the correct authority and/or the owner has very different ideas of ‘fair wear and tear’ to an experienced agent who works with hundreds of tenants each year.

There are some things a new tenant can do for protection like being thorough on an initial inspection and taking many photographs at the beginning of a new lease.

The Greens want Canberra to take over responsibility for rental standards from the states by introducing a national tenancy act as the rules currently vary from state to state. This would seem to be a good idea which will help all tenants. As far as the property investor owner being your first point of contact as a tenant however, we would recommend you keep looking until you find a place with good professional management.

Advantages of renting over buying a home

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

Advantages of renting over buying a home

This little blog seems appropriate following the last blog but this time we look at the advantages of renting over buying a home.

More options in property investment and renting than buying your own home.

For many years, Lime Property Solutions has assisted young couples in particular build substantial equity in property through the relatively new coined phrase “rentvesting”.

In the same weekend, a ‘Domain” article tells us First-home buyers are turning their back on the Great Australian Dream of having their own home to live in and are instead increasingly opting for an investment property first. Described as ‘rentvestors’, a third of investors in 2016 were first-time buyers who had not yet bought their own home, a Mortgage Choice survey found.

So in today’s blog we’ve given you two separate articles to go to on the same subject. As we’ve always said, “Rent money is NOT dead money as long as you take a position in the housing market.”

So if you crave freedom and options but are fighting against the need to put down roots and buy your own home, here are a few reasons why you might consider an alternative.

Negative Gearing
Spreading the risk
Liquefying our assets on retirement
Rent can be cheaper
Freedom to move

See more here: http://goo.gl/Yit4lg and also http://goo.gl/1iFYxM

May 23

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Generation Rent: How do you get enough income to retire?

By Hugh Frame | best investment, Economy, Financial, Investment, Negative Gearing, rent, Research | No Comments

Generation Rent: How do you retire?

A very interesting article in this weekend, “Generation Rent: never buying a property will mean saving more for retirement or the big question it alludes to Generation Rent: How do you retire?

The article correctly points out that Generation Rent will retire into an aged pension and superannuation system that was not set up for people who rent. Recent figures released also point to the fact that one third of all private renters are now classed as ‘long-term’ this figure rising from just one quarter twenty years ago.

Generation Rent faces something no other generation has collectively experienced before – renting in retirement

Terry Burke from Swinburne University states, “Income support systems are premised on outright [home] ownership and therefore Australian pensions tend to be much lower than equivalent countries,”

In Sydney, if you live in the city’s cheapest suburb, Marsden Park, and you retire owning your own average-priced home, you will still be $360,000 better off than a renter. Of course, we have seen the median price of property in Sydney exceed $1 million for a short time so it would stand to reason that most renters will never accumulate this amount of funds without being in the property market.

The Association of Superannuation Funds of Australia data estimates that for someone to afford a comfortable retirement at 65, a single would need $545,000 and a couple would need $645,000, REST Industry Super chief operating officer Andrew Howard said.

Financial experts say it is possible, although challenging, for lifelong renters to comfortably cross the finish line into retirement.

After income dries up, a larger nest egg is needed and savings from not having a mortgage need smart investment. The key would be to invest the difference rather than simply saving, so why not contact Lime now and learn how easy it can be to be a rent-investor? http://goo.gl/1fvwnf

May 17

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More Massive infrastructure spending for the Gold Coast

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

More Massive infrastructure spending for the Gold Coast

It’s very much changed days since the Global financial Crisis for the Gold Coast as More Massive infrastructure spending for the Gold Coast is announced.

Outside of Sydney, Australia’s sixth largest city has shown the best capital growth in Australia over the last few years and all pointers are that it’s not going to stop for some time.

More Massive Infrastructure spending for the Gold Coast Artist’s impression of new Casino

Even the most conservative of commentators is suggesting that over the next twelve months, both weekly rents and average dwelling prices will rise and maybe substantially.

The local population is growing, vacancy rates are very low, employment growth is around the highest in Australia thanks mainly to the huge increase in our tourism industry since the lows of the GFC and the massive infrastructure projects that are taking place from the spending on transport links like the new light rail project, the new town centre and other infrastructure being built around Coomera, the upgrade of the universities and airport and of course, the 2018 Commonwealth Games, just to mention a few, and now a possible $2 billion to be spent by Crown on Jupiters Casino.

The Star Entertainment Group and its Hong Kong partners may build up to five new towers with 3000 hotel rooms and apartments on the Gold Coast as part of a $2 billion master plan centred around the expansion of its ageing Jupiters casino.

Construction of a proposed 200-metre high hotel and apartment tower, which includes 350 apartments and 700 hotel rooms of 4.5-star quality, will start in 2017. Four further towers may be built at two-year intervals depending on demand for the initial tower.

Negative gearing reduced to schoolboy debating

By Hugh Frame | Economy, Investment, Negative Gearing, Property Research, Real Estate, rent | No Comments

Negative gearing reduced to schoolboy debating

“Negative gearing reduced to schoolboy debating” states one of our most respected papers today. It was also said that the only thing worse for a government than houses becoming more expensive is houses becoming cheaper…. so Mr Turnbull has now set one of the big issues for the coming election on negative gearing. Rather than keep repeating what negative gearing is all about, take a quick lesson from our FAQ page click here (8^th question down on the list): http://propertyinvest.co/property-investment-frequently-asked-questions-faqs-information/

This is the 4^th blog we’ve written on negative gearing in the last couple of months simply because it’s such a hot topic! I do think this is the best headline we’ve seen yet; a headline that really captures what all the fuss is about – lots of shouting, lots of claims and counter claims, big assertions and at the end of the day ‘schoolboy debating’ with a confusing outcome.

The Prime Minister says no change to negative gearing or capital gains tax

So let’s just try and summarise again what the two sides are saying. Let’s look at the current Government position and Mr Turnbull first:-

No change at all to people who wish to buy an investment property things to go on as is.
No change at all to capital gains tax things to go on as is
No change at all to our current system – nothing is going to change!

Hopefully this is quite clear to all.

Now for the leader of the opposition who does want some change to property investment and people hoping to purchase an investment property to assist with building asset for their future. Firstly, for those who currently own investment property:-

No change at all to people who own investment property
Slight increase in capital gains tax (maybe?)
No change at all to everything else

Quite clear? Mr Shorten will ‘grandfather’ current rules so no one who currently owns investment property will be affected by new rules. The big change he does intend making is that negative gearing will not be allowed on older investment properties purchased after 2017. However, if you purchase a brand new investment property, then there will be no changes at all!

Hopefully this makes the implications of all the debate simple and clear.

rent

Is Property investment a better investment than shares?

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

Is it really time to be asking for a rental decrease?

Choosing an investment property and understanding demographics

Why buy an apartment Property investment?

Rentinvestor means you are interested in tenancy and landlord issues

Advantages of renting over buying a home

Generation Rent: How do you get enough income to retire?

More Massive infrastructure spending for the Gold Coast

Negative gearing reduced to schoolboy debating

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