The Risks Of Investing
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.
Our accredited finance brokers are readily available to assess your capacity to borrow safely for investing.
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.
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”.
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
- 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.
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.
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.
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.
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
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.
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.
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.
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.