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.)

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.

Why it is important to invest in property

A little understanding of how we are supported in our old age by our government should make it clear why it is important to invest in property.

Before Federation, most states had introduced a means tested state pension for older people who could no longer support themselves. By 1910 the new Commonwealth Government introduced the age pension for men over 65 years old and women over 60 years old who had lived in one of our states for more than 25 years. This was probably no big deal as only around 7% of the population lived to be over 65 years of age, and the likelihood is that the majority of these were from relatively well-nourished middle class families who could support themselves. It was not until the late 1930’s early 1940’s the number of over 65’s reached 10% of the population.

(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 reality is that all working Australians are making some tax contribution to support our older Australians throughout their working lives and have been doing this for over 100 years. The irony of the situation was that only 1 out of every 10 contributors, at most, lived long enough to benefit from the government scheme! Even back in the 1930’s and 40’s, seventy years of age was a very old person, so even those who made it to age 65 usually only had a very few years of state pension before dying.

It was Keating’s government back in 1993 who recognised that as most Australians, (not just 1 out of 10) were living to 65 and 10 or more years beyond, the age pension was no longer affordable to government. The ‘answer’ was compulsory superannuation and then, more recently, rising retirement age to 67 for both men and women. This still means that the average female in Australia today will have around 18 years to live, the average male around 14 years. Without allowing for inflation, at an average Australian income for these 18 years, the average couple now needs around $1.3 million to live an average life in retirement. For most, it is very unlikely that they will achieve this through superannuation alone, but just one $500,000 property investment could deliver another $500,000 for retirement in just around 10 years of ownership. This one property investment could well be the difference between a comfortable 20 years of retirement or 20 years of living below the poverty line in the later years of life. This is why it is important to invest in property. More and more we are becoming a ‘user-pays’ society, we can’t depend on government handouts in our old age.

If you want to know more about how you can prepare for retirement through property investment contact: info@limepropertysolutions.com.au.

Read more: http://www.smh.com.au/federal-politics/political-news/australian-life-expectancy-hits-alltime-high-20161027-gsccau

Melbourne needs an oversupply

SQM Research managing director Louis Christopher claims that Melbourne needs an oversupply of apartments as vacancy rates tighten throughout the city.

There is little doubt that Melbourne did have an oversupply of residential units but it now appears that vacancy rates in Melbourne are going ‘against the trend’ and more housing developments are needed.

22,000 new homes needed for Victoria over the next year

There are certainly small pockets of the inner city where there are still more units than required and it is still the case that Melbourne needs more diversity of housing types and dedicated investment in affordable and social housing. The middle ring and outer suburbs, in most cases, still have very low vacancy rates and house prices have continued to increase since 2012.

The concern of most property investors has been the oversupply of units in the CBD area but now, according to SQM, even the unit market is tightening and yields throughout the city for landlords are on the rise.

BIS Shrapnel has warned of a “huge apartment hangover” due to oversupply in the Melbourne’s apartment markets but the huge increases in population in Australia’s fastest growing city may prove this forecast to be false.

It is now estimated there will be 22,200 more homes than necessary in Victoria by 2018. Also, it is estimated that in n Victoria almost 40 per cent of tenants are paying over a third of their income in rent.

Many property investors have been very concerned about the quantity, size and quality of many of the apartments built in the CBD area of Melbourne over the last few years but the more astute investor has realised that Melbourne needs more than small inner-city units to satisfy the continuing demands of a growing population.

Even if SQM have it wrong here, there is still opportunity for price growth in the middle and outer suburbs as Melbourne sees a tightening supply and some needed yield growth.

Read more: https://goo.gl/n93d7o

How many investment properties do I need? – Prepare to live for 100 years

A common question from our property investors is “How many investment properties do I need?” A new book now available is suggesting that children born now in western Sydney have a 50% chance of living beyond 105 years! Some really interesting facts and figures in the attached article but the information should not make much difference to how many investment properties you need for a happy, long life. Read on to find out why?

“A life well lived requires careful planning in order to balance the financial and the non-financial, the economic and the psychological, the rational and the emotional. Getting your finances right is essential to 100-year life, but money is far from being the most important resource. Family, friendships, mental health and happiness are all crucial components.

How many investment properties do you need to achieve your goals?

You can’t have a long and financially successful career if your skills, health and relationships are depleted. Similarly, without sound finances, you will not be able to afford the time to invest in those crucial non-financial matters. Getting the balance right is hard in a short life – and while it is more complex in a long life, there are many more opportunities to do so.”

All extracted from today’s article and all making perfect sense to me, so what is the answer to the question “How many investment properties do I need for a comfortable long life”. If this is a question you have pondered then there is a basic misunderstanding of why we buy investment property! A property investment is not an end in itself but a means or the vehicle you use to help achieve your end goal. Your end goal is not the number of property investments you own but the financial goal you have set yourself.

With most people it is sensible to aim for a retirement income of around 75% of your final income. If you can achieve this then retirement should not interfere too much with your current life style and you should have enough discretionary income to purchase the things in life that keep your life interesting. Basically, this means if you are earning $100,000 per annum, then you should be aiming for a retirement income of around $75,000 per annum. If two partners are earning $100K each, then the goal should be around $150,000 per annum joint income. To ensure the income you want, you can use the 20 times rule. This means if you want an income of $100,000 in perpetuity then you should aim for an asset base of 20 x 100,000 = $2,000,000 outside of the value of your family home. Why $2 million you may ask? Well in safe secure investment, we can’t expect much more than 5% of return on average on funds invested. This means if you have $2 million invested securely then you will have an average income of $2 million x 5% = $100,000 for the rest of your life.

So to answer the question of how many investment properties you need, you must look at your financial goal. If your goal is to accumulate $2 million then the number of properties that will achieve this amount all depends on initial value and time in the market. One median-priced Sydney property of $1 million value today will see you with an investment property asset base of $2 million in 10 years time (minus the $1 million of purchase loan you probably still owe). Give Lime property Solutions a call and we can discuss your personal plan and your personal goals in the timeframe you are considering.

Read more: http://goo.gl/zkhmQA

Understanding the property cycle – obvious and predictable news as South coast property on the rise as Sydneysiders chase good value

Latest news this weekend tells us that South coast property is on the rise as Sydneysiders chase good value, this is the next obvious step in understanding the property cycle.

The ‘hot’ area for price growth is the South Coast property market. We are told that this market has been dormant for years after the global financial crisis (2008) but now prices in the Shoalhaven area near Nowra and the pristine waters of Jervis Bay are growing faster than Sydney!

The ripple effect sees property price growth in Sydney’s outer regions

So let’s just have a look at how this is so predictable in terms of understanding the property cycle.

Anyone who did not realise that up until the end of 2015 Sydney was in a house property price boom must have been living in a country that was not Australia! The ‘boom’ seems to have been going on since around the middle of 2010. Now if you lived in Blacktown in 2012/13, you may have been wondering what the media were talking about when they said Sydney house prices were booming because there was nothing happening in Blacktown!

By the end of 2013 beginning of 2014 all of a sudde3n we are being informed that the highest growth area in Sydney is in the Blacktown area, all of a sudden prices just took off. However, people living in Liverpool and Campbelltown and even Wollongong could only scratch their head when they read that prices in Sydney were ‘booming’ because the price of their home hadn’t really changed much over the last 10 years!

By the beginning of 2015, the hottest growth markets in the Sydney basin were Liverpool and Campbelltown showing double digit growth – to be expected as the ‘ripple effect’ extended to our outer suburbs.

Basically, price growth starts in the centre of our major cities. As the inner suburbs become too expensive, the market ripples out to the middle suburbs. Over a relatively short period of time, these middle suburbs become too expensive so property buyers move out to the outer suburbs.

Today’s article is now informing us that this ripple effect has moved out of the Sydney basin and the greatest growth has now passed Wollongong and has reached the south coast market.

Understanding the property cycle is helpful in assisting the property investor choose the next ‘boom’ are for their next investment property.

Read more: http://goo.gl/lGql96