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Doctors love this new property

Generally, Doctors are an astute group.  They don't have a lot of time to spare, have large tax problems and want/need easy care investments.

This one fills the bill very well.

Two new buildings in an existing development which is already an outstanding success. To be finished in February 2011.

Position, position, position as they say try this- next to a new A$1.6 Billion hospital which will have 700 beds and a staff of 5000 people AND next to a new Private Hospital with 320 beds AND next to Griffith University which has 15,000 students and expanding to 20,000 AND the new A$1.8 Billion Light Rail  System starts outside the main entrance to the main hospital . where is it? in Southport on the Gold Coast, Queensland.

Of the 42 1 and 2 bedroom units for sale 13  have been sold to Doctors so far in only a matter of weeks since it's release.

Post graduate Doctors, students from overseas, graduate Doctors needing to live next to their Hospital, lecturers, staff all find the proximity to the new Hospitals and the University fantastic. Add in 4 swimming pools, a lavish gymnasium, sauna, walking paths through a large bushland park and opposite the Southport Sharks Australian Football Club for entertainment, meals and also only 4 kms from the business centre of Southport and the Broadwater and you can see why this development has such great appeal.      

Finding new sites for investor houses

Have just spent some time looking at developer's land sites.These are offered to us on a regular basis by most of the developer/builders. it's interesting to see what is on offer. for instance, of 5 sites we saw north of Brisbane we could only recommend 2 for our clients to view.

It has become something of a trend for people to buy sight unseen on house and land purchases. Sometimes, people base their whole decision on a quick look at Google Earth! This is all you beaut for the sellers, but when we looked we saw where a number of houses had been purchased off the plan to be built and they were in places we would never have recommended. Out of the way, a long way from public transport, nothing really to suggest a big capital gain could be achieved, and in fact difficult to rent . If at all possible we like to have our prospective clients view the actual location even if it is a bare block of land, that way they sleep well at night knowing full well where and what their investment property decision gives them- peace of mind and another step on their ladder of building their wealth.    

Cash, property still leading the way

• By Karina Barrymore
• From: The Courier-Mail
• June 22, 2009 12:00AM

Where your money goes ... residential property and cash are the most popular investment classes, a study has found / File Source: NEWS.com.au

CASH and residential property, Australia's two most popular investments, have proved the strongest performers in today's volatile markets, outstripping almost every other asset class and super fund.

According to an analysis of investment returns, residential property has offered the highest total returns during the past three years and cash has come in second place for the past five years.

While the global financial crisis and the economic downturn have taken their toll on sharemarkets, managed funds and commercial property, Australia's love affair with residential property and cash have paid off.

Most residential landlords are still sitting on a strong capital gain, while other assets have fallen by up to 40 per cent.

Landlords also have the added benefit of rising rental income as population demand for housing continues to increase.

Even those often-criticised risk-free cash investors are sitting pretty, enjoying some of the strongest returns for the past five years.

Independent superannuation research company SuperRatings said it was no surprise that cash had performed well.

"In almost all time periods cash is in front; however, these investors have missed out on the big upturn of the past few months,'' SuperRatings chief operating officer Nathan Macphee said yesterday.

"When you look at the last three months there has been quite a profound upturn across all the investment options except for cash.

"I guess what it shows is that people need to invest in the option that suits their risk profile, which means they have to decide if they can survive a downturn like the one we have had,'' Mr Macphee said.

"If they can't survive for a couple of years in a downturn, then the lower-risk cash option is more appropriate.

"However, if they are investing for the longer term - and the majority of investors are - then they should be able to withstand a downturn."

During a five-year time-frame, the balanced superannuation option was almost on a par with the cash performance, he said. However, balanced super funds have the potential for much greater growth, while cash has limited growth ahead.

"Australian shares are still a shining light. They were down nearly 40 per cent but they are still the strongest performer over five years.

"If your thinking is long-term, then five years is just a blip compared with 30 or 40 years of investing,'' Mr Macphee said.

Residential property has also been a stand-out, led by continued demand from both investors and owner occupiers for housing, Portfolio Management Services director Jock Bing said.

"We have a serious shortage of residential property in this country; in fact, we're the only country in the world to have a net shortage of accommodation for both buyers and tenants," Mr Bing said.

"Residential property has proved to be the mainstay of a large number of investment portfolios, and there is a very good reason for that: over the years, property has made a lot of money for many, many investors.

"Even in this downturn, prices have held up remarkably well, and rental income is still increasing."

According to financial adviser Glenn Fairbairn, from Hewison & Associates, the key to successful investing is having a spread of investments.

"The data highlights that different asset classes perform at different stages of the investment cycle. This does not mean that one asset class is necessarily better than the other," Mr Fairbairn said.

"Research shows that spreading your investments reduces volatility and can provide higher long-term results."

How much does an investment property really cost per week?

Recently, I was going through some detailed figures on a proposed property with a prospective client.When all figures were taken into account it was going to cost him $60 per week. Eqivalent to a case of beer or a low priced meal.

That took into account absolutely all costs related to the property. Body corp fees, rates, letting fees, insurance, stamp duty, interest, lawyers fees, etc etc PLUS his own wages which were $60,000 p.a Surprised it would only cost that little to control, yes control a property worth nearly $400,000! Taking advantage of our tax laws regarding depreciation etc he was amazed.

I reflected that about 8 or 9 years ago that figure would have been about $15 or $20 per week. Why? The higher tax rates kicked in at a much lower rate than they do now. For instance here are the tax rates for 2003-4

Tax rates 2003:                 30% Tax   on $20,001 to $50,000 income

                                       42% Tax   on $50,001 to $60,000 income

                                       47% Tax   on over $60,000 income

So naturally everyone paid a lot more tax and the net out of pocket cost per week was much less than today. 

Now Tax rates for 2010:    30% Tax  on $30,000 to $75,000 

                                       40% Tax  on $75,001 to $150,000

                                       45% Tax on $150,000 plus

Since 2003 wages have increased and so have property prices. Only tax rates went down.

A Current Affair - 30th March showed the "Tenants from hell" again!

They must look long and hard to find these people!

I have a couple of questions for these unfortunate ill informed property owners

1/ How do they find and select their  tenants

2/ Do they use a property manager?

3/ has anybody checked on past references, like where did the tenants  live before?

4/  Most importantly- As an owner have you ever considered (before this) having Landlord Proptection Insurance?

To  go on a bit, on a preventative note, if having tenants from hell happened all the time the premiums would be astronomical instead of about A$220 per year. 

Basic suggestions for all of our clients are:

Use a Property Manager who will check references, use TICA (equivalent of a CRA check for landlords- if they are on there they do not get a rental!)

Take out Landlord Protection Insurance

Ian Begaud

Realistic Property