Frequently Asked Questions

The Risks Of Investing

The Reserve Bank of Australia (RBA) raises interest rates to curb inflation. In an inflationary period, rents often go up by more than usual which helps to compensate you for any effect on cash flow.
Some investors choose to lock in their interest rates beforehand. Club Founder, Kevin Young provides commentary on interest rates in our bimonthly Property Investor Magazine and Rate Club notices which can help investors decide whether fixing interest rates would suit their situation.
Property Club’s strategy aims to minimise risk. Our free information workshops explain this in more detail. We encourage both partners to attend so that you each understand and feel comfortable with your choices.
Our accredited finance brokers are readily available to assess your capacity to borrow safely for investing.
When negative gearing was abolished in the 1980s, rents sky-rocketed and unemployment in the building and allied industries soared. After 18 months, the Government re-introduced negative gearing and it’s doubtful it will be abolished again.
Although this topic is often revisited, it is well recognised that the government needs to encourage investors into the property market to stimulate housing construction and provide subsidised (negatively geared) rental accommodation.
Throughout history there have always been ‘bad times’ to invest in property. Despite this, an analysis of property price growth over many years reveals that historically, prices generally rise between 2% – 4% above the prevailing inflation rate.
No one can predict future values, however history shows that property prices in Australia will double over a period of time. Viewed as a long term investment, quality property in selective locations overrides the short term “bad times”.
Keeping your property rented is a high priority. Our Club National Leasing department helps you source tenants quickly by liaising with multiple external property management agencies. Club properties that are vacant at settlement receive this service automatically, but it’s also available upon request for as long as you hold the property. Because of this unique service, Property Club members’ vacancy periods are much lower than average.
Through our Rentsafe program, if your Club property isn’t tenanted within 14 days from settlement, we will pay you 50% of the rent (lower rent listed on the property profile)* up until the property is tenanted. For full details and to apply contact your Property Mentor.
*conditions apply
The wealthy get wealthier by ‘leveraging’ to buy assets that increase in value, so why shouldn’t we?
Borrowing to invest in appreciating assets (such as well-located property) is considered ‘good’ rather than ‘bad’ debt and provides legal tax minimisation benefits. It is much easier to create wealth using careful borrowing and investment strategies compared to saving your hard earned, after tax income.
The possibility of losing your job can create the fear that prevents you ever investing and getting ahead.
There are insurance options available that can replace your income if you stop work due to accident or illness.
Job losses from redundancy are often only short term. However, if this is a concern we can recommend strategies that may help you through such times. Ask your Property Mentor for more information.
The properties we select for our stock list are carefully researched to ensure minimal cash outlay for investors. Property Club looks for specific investments with good tenant demand and rental returns without overburdening expenses so that they are suitable for average income earners.
We can show you how to hold your investment properties without biting too much into your regular income. By setting up an appropriate finance structure, claiming your tax deductions and maximising your rents, your investment property could pay most, if not all, of the bills.
Your Property Mentor can show you estimated cash flows on your selected property using our analysis software. This program helps you see the expected weekly out-of-pocket costs. This free member service helps you analyse the true costs of holding the property and assists you to build your portfolio wisely.
Property Club researchers negotiate with developers to obtain the lowest price possible for our members. This often involves obtaining an independent valuation on the property and pricing comparisons using RP Data (CoreLogic). The sheer number of finance-ready Club investors gives us negotiating power to get the best deal for our members.
You should also insist on obtaining a copy of your bank’s valuation on the property when your loan is being assessed. This is normally part of the loan application process.
Prices for Club listed properties are similar to, or even below, local listing prices. Our researchers can often negotiate additional extras, such as blinds, landscaping, security screens or upgraded internal finishes. These add-ons ensure your property is ready for tenants to move at settlement.

Property Club Strategies

Historically, property prices appreciate between 2%-4% above inflation, regardless of whether it’s low or high.
We’ve found that a better indication of property prices is the mis-match between supply and demand in particular areas, along with infrastructure development in those locations. Our Club Researchers identify areas that are likely to achieve better-than-average results with long term capital growth.
There are many different philosophies and opinions on the best way to create wealth through property. Property Club’s strategy has been through decades of “real life” testing by founder and property millionaire, Kevin Young as well as many thousands of Property Club members who’ve been investing since 1994.
Over 4,500 members have built property portfolios worth over $1million and many others are well on their way to achieving financial independence. For more specific details on our strategies, please talk with your Property Mentor.
We do not recommend older properties unless they are fully refurbished, of solid construction and in highly desirable locations. Older properties can have hidden traps leading to costly repairs and maintenance. They also have lower tax benefits – creating a drain on the investor’s back pocket.
Buying new has many advantages including peace of mind with lower maintenance costs. We’ve also found that newer properties attract better quality tenants and higher rents.
To start with, we’d suggest you look at ways to make your current property perform better. Selling a property can take time, depending on the current market and its location, but it needn’t hold you back from continuing your investment journey.
When you complete a Financial Wealth Check, one of our accredited Property Loans 4U mortgage brokers will assess your current finance options and suggest how you could use your existing property to help fund your next purchase. Depending on your circumstances, you may find that holding your existing property is a better option.
You can buy property in partnership with another person either as Tenants in Common or as Joint Tenants. Joint Tenancy is most common when purchasing with a spouse in equal shares. Tenants in Common enables you to purchase in unequal shares.
Buying with a partner can increase your ability to borrow suitable funds and may even enable you to start investing sooner.
It can also help you claim tax deductions in a higher proportion for the higher income earner. Your Property Mentor can help you assess the benefit of different percentage ownership structures using our cash flow analysis software. We’d also recommend you obtain legal advice when considering this arrangement.

Property Selection

Our Property Researchers play an extremely valuable role. While researching the growth and development prospects of different locations, they seek out suitable property that meets our very strict investing criteria.
By developing strong relationships with developers and builders, they can negotiate great deals for our members. With their strong knowledge of the property market, they can often source potential development sites well ahead of the general market, providing members with prime investment opportunities.
Property Researchers also monitor new developments as they progress to ensure the interests of our members are looked after.
We research the rental market and target high-density areas with the lowest vacancy rates. Rental returns and property price growth is largely driven upwards in areas where demand exceeds supply.
Club Property Researchers understand the economic principles of supply and demand, avoiding areas where oversupply may stall, or even drive prices down. By following Property Club’s established selection criteria, capital growth and rental increases can be optimised.
While no one can predict the future, historical trends can provide a good guide on how property prices react to different economic triggers.
By examining research from the Australian Bureau of Statistics, the Valuer General’s Department, the Ministry for Planning, Real Estate Institutes as well as monitoring other growth factors, we can be confident in the areas and properties we recommend. We focus on cities with higher population and economic growth forecasts, and where prices are affordable to investors.
Property Club can’t give guarantees, but we’ll do our best to find properties that beat the averages when it comes to long term capital growth and rental demand. Contact your Property Mentor for our latest recommendations.
During an economic recession property prices may stagnate for longer than usual, however the underlying demand caused by increasing population can apply pressure that eventually results in a property “boom” when the economy returns to more favourable times.
In a normal market, population increases in concentrated areas will push prices up. Our research pinpoints where this is most likely to happen and we target those areas – often getting our members into the market well before prices escalate.
Each city is a different market, so property prices will move through different stages of growth at any one time. By diversifying their property portfolio, many Club investors purchase properties in different states as they become “ripe for picking”, increasing the prospect for growth in their portfolio value.
Purchasing higher density accommodation, such as townhouses or units, help investors into more desirable locations closer to city centres. These types of property usually have higher rental returns compared to house and land in similar locations.
Part of any good property investment strategy is to maximise tax deductions. Villas, townhouses and apartments don’t have a high land component in the overall cost, so depreciable tax deductions are greater, helping improve your cash flow. You cannot depreciate land, only the improvements made upon it.
Be aware that the land component of investment properties is subject to land tax when an investor’s properties (land value) in that state reach the tax threshold. This is an important consideration for investors wishing to build a portfolio with multiple properties.
Our Researchers have an extensive list of factors they use to assess if a property is suitable for Club members. Here is just a sample of their selection criteria:

    • existing or potential high mid-to-long term capital growth of the area,
    • high population growth and high employment in the location,
    • close to schools, shops, transport and entertainment facilities,
    • new or refurbished to allow maximum depreciation and higher taxation savings,
    • high quality design, materials and construction and require minimal maintenance,
    • in an area with sound, long term rental history and strong rental demand.

After analysing the property, Researchers prepare a detailed Property Profile with supporting evidence and submit it to Property Club Head Office for final approval. Once approved, this Property Profile, is made available to finance ready members, ensuring they have full information to compare it with other properties.

Property Finance

Every lender has different criteria to assess how much they’ll lend to customers. Our Mortgage Professionals are independent finance brokers and have access to around thirty different lenders. They can assess your finances and borrowing capacity and recommend the best lending product for you – before you need to apply for a loan.
By having a free Financial Wealth Check, you’ll get to know your realistic borrowing capacity for an investment property loan. The broker can also advise if your current loans are performing.
This process is as easy as completing a 2 page form, and remains confidential between Property Club, the broker and you. They’ll advise you if you don’t qualify for a loan yet, but can let you know what steps you can take to improve your borrowing ability.
When you are ready to purchase a property, the finance broker can help you through the formal loan application process – at no cost to you.
If you don’t have a cash deposit for an investment property you can temporarily use the equity in your home for the 10% to 20% deposit plus 6% buying costs. When the value of your investment increases, you may be able to refinance your investment loan to repay the funds owed against your home.
The first step in starting an investment portfolio is to gain a good understanding of your financial situation and the likely costs to hold a typical property in your price range. Our suggested strategy is designed for people on average incomes (or above) but is self-paced and progresses as and when you can afford it.
Your Property Mentor can help you assess the likely costs to buy and hold a property using our cash flow analysis software, and our approved finance brokers can advise on your lending ability.
It’s important that you feel comfortable with the financial commitment before you begin investing.
Investment property that grows in value is an ideal vehicle to increase your wealth. You don’t need to own them outright to reap the benefits of capital growth.
As the equity (the portion you own) in the investment property grows, you can use it to fund the deposit on additional properties. By taking advantage of the lower repayments on Interest Only loans, you are more able to fund new investments while building your portfolio. We’d suggest that you pay off your home loan and any personal loans which are not tax-deductible.
Accountants must maintain their expertise in accounting and taxation affairs. Most don’t have time to keep across all the details of specific property investment strategies.
Property Club’s Property Mentors and Branch Managers have an extensive knowledge in all aspects of property investment and are happy to share this with you and your accountant. We do, however, recommend you discuss your investment plans with your accountant to ensure that it fits your overall financial situation.

Property Club Services

Yes – we do provide free membership and free services. This is made possible by our vendor’s commission when Club members purchase through Property Club.
When a property is fully assessed and approved, the vendor agrees to a commission for Property Club to list, promote and sell their property. This fee includes all costs associated with the sale of their property, inclusive of advertising and promotion which traditional agents charge as additional fees. Considering the costs of advertising used by traditional agents (often unidentified at the time of listing) the fee comparison between agents and Property Club is very similar.
Commissions enable us to provide our free services to members. We are accessible to average investors and can educate them on the benefits of building wealth wisely through property investing.
You can become as involved as you want to be. Property Club provides free property workshops, educational webinars and special events to help educate members to fully understand the details of property investing.
Club members find that our services reduces the time involved compared to investing without our help. As a Property Club member, you’ll have access to tools and information that will help you manage your properties effectively.
Of course. We offer our members a comprehensive range of services, and act as a ‘one-stop shop’ through the entire property investment process, but it’s totally up to you which services you want to use.
Your Property Mentor will point out the advantages of the free services we offer. To see the breadth of services offered, see our Circle of Safety chart.
You can become a Property Club member by attending one of our workshops or events, or submitting an online application.
There are no joining or membership fees, making it accessible to anyone interested in property investing. As a member you can receive our bimonthly Property Investors Magazine and access our comprehensive property investment services.
Every member is assigned to one of our experienced Property Mentors who can assist you to obtain all the information you need. If you’d like to join Property Club click here.
A Property Mentor is an experienced property investor who acts as a mentor for other Club members. Typically, a Property Mentor has purchased investment property through Property Club and is trained in all aspects of the Club’s services. Your Property Mentor acts as a “personal guide” to property investment through the Club and is your first point of contact.
Branch Managers are responsible for Property Mentors, and act as a liaison between their branch and Property Club head-office. Like a Property Mentor, a Branch Manager is an experienced property investor and often has a higher level of property investing experience. They offer further support and training to Property Mentors and are always happy to assist members in the Branch.
Members are welcome to attend any of our Information Workshop held throughout the country, or one of our online workshops (webinars).
Other workshops, seminars and conferences cover topics from beginner level to advanced, taking investors through every aspect of property selection, finance strategies, record-keeping, property management and how to improve and manage their property portfolio. Visit our Education & Events page to find out more.