"Buying property through your superannuation fund"

Hi Followers

I came across this and thought I'd share:

Since employer contributions to employees' superannuation funds became compulsory in 1986, Australians have channeled uncounted millions worth of funds into the scheme.

Self-managed superannuation funds (SMSFs) have become a popular choice for individuals wanting to take control of their retirement savings. At the same time, Australians have continued their love affair with property. It has great appeal for investors with a view to bringing self-funded, early retirement closer, by either making use of the negative gearing legislation or simply by making a profit through rental income.

Combining your superannuation with property investment seemed like a great idea... right?
There was one hitch, though. Prior to September 2007, investors' SMSFs couldn't borrow or charge their assets, so previously borrowing for property investment using your super wasn't an option.

However, late last year changes to the legislation made by the previous government altered this to open a new avenue of superannuation investment diversification away from the traditional "managed funds" approach to help mitigate the risk to an individual's investment portfolio by making property investment possible.

While this investment avenue has now opened up, it isn't as clear-cut as it may seem. Consultation with the experts will determine whether or not this option is viable in your situation.

What the fine print reveals

The conditions surrounding SMSFs borrowing to invest are set out in the Superannuation Industry (Supervision) Act 1993 (SIS Act) under Section 67.

The SIS Act states that the borrower's funds are to be used to purchase an asset, in this case real estate, and that the asset is to be held in trust for the self-managed fund by another entity; which would be the property trustee.

Additionally, the SMSF must have the right to acquire legal ownership of the asset by making payment and any recourse by the lender of the funds used to purchase the asset against the SMSF must be limited to the asset (or property) in question. Essentially this last statement means that if any default on the loan occurs, the lender can only take possession of the actual property on which the default occurred; the other funds and assets held by the SMSF are protected.

Under the new structure, a superannuation fund will be the beneficial owner of the property and is able to purchase any kind of real estate, be it residential, commercial or even holiday units, provided you purchase it as an investment; not for you to occupy. You can, however, transfer the property from the fund to your own name after you retire and at that time move in and make it your primary residence.
The purchase of the real estate investment takes place in the usual way; the investor selects the desired property and then their SMSF must satisfy the loan requirements as specified by the super-leveraged loan provider.

These conditions differ a little from what the regular lenders will offer for a standard property investment mortgage.

The maximum loan-to-value ratio available is generally lower; some lenders offering up to 85 per cent on residential property for full documentation and 83 per cent for low documentation loans. This excludes the capitalisation of fees and is slightly lower again for commercial securitisation. A maximum loan term of 30 years is applicable for residential property and 25 years for commercial.

There may also be restrictions on the postcodes in which the property can be located.

For the exact details applicable to an individual situation, check with the lender.

The deposit, balance of purchase price, associated legal costs and stamp duty are all paid by the SMSF, as they would be in a normal investment property purchase. Similarly, the lawyer or conveyancer is chosen and appointed by the SMSF and they complete all necessary legal work as usual.

All costs associated with the property are paid by the SMSF. This includes council rates, land tax (if it applies), loan fees and repayments, maintenance and repairs conducted on the property and the property management costs.

Because the property is "beneficially owned" by the SMSF, outside of the legal ownership of the property trustee, it also receives all proceeds of rent or other income and can improve or renovate the property as any other investor may.

At any time, the SMSF is able to pay extra into the mortgage or pay it out entirely, subject to the lender's terms and/or fees associated. Once the mortgage has been repaid in its entirety, the title to the property can then be transferred to the SMSF or the property trustee can continue as registered proprietor.

At this stage, if your mind is brimming with newfound property investment ideas using your SMSF, you would be well advised to proceed with caution. This is a complicated issue that takes into account the correct setting up of the trust, how the loan is structured, compliance with guidelines of the trust and tax implications of each individual situation.

Before setting off on an SMSF-funded real estate buying spree, consult a certified financial planner, your accountant or the taxation office for a summary of the new legislation, as it applies to you.

This information was gathered from:
http://www.apimagazine.com.au/api-online/property-investment-articles/buying-property-through-your-superannuation-fund

DEB BRADY
0405 570 903

UNDER OFFER!!

Hi Followers

UNDER OFFER

24 KATHLEEN STREET, COTTESLOE

DEB BRADY

0405 570 903









FOR SALE: 13/7 O'Halloran Lane, Mosman Park

Hi Followers

This has to be THE BEST BUY for a FHB or investors in Mosman Park. The owner of this sleek townhouse has transformed this property like no other. Recently renovated this trendy townhouse offers contemporary living throughout with brand new kitchen, new flooring on the ground level, new decking in the private courtyard and contemporary bathroom upstairs.

Not a cent needs to be spent on this stunning transformation. Perfect for the first home buyer, investor or FIFO worker needing a lock up and leave base within the Western Suburbs. Can be purchased furnished or un-furnished.

Walking distance to both the beach and the river and to public transport.

THIS WONT LAST…CALL DEB BRADY NOW 0405 570 903 TO VIEW BEFORE FIRST HOME OPEN NEXT WEEKEND.

ACCOMMODATION: 2 bedrooms upstairs with renovated bathroom, open plan new kitchen, meals and living downstairs with secure courtyard

For Sale: Offers from $495,000

To arrange an inspection or for further information please contact Deb Brady on 0405 570 903

DEB BRADY

0405 570 903



"High-rise buildings set for Cottesloe"

Hi Followers

If you're a Cottesloe local like me I'm sure you would have herd!

BUILDINGS up to eight storeys high will be allowed along the Cottesloe foreshore after the State Government granted final approval today.   

Planning Minister John Day granted final approval to the Town of Cottesloe's Local Planning Scheme No.3 today, saying Cottesloe had long been in need of redevelopment and renewal.

"The proposals have been the subject of exhaustive debate, examination and consultation and I am confident the modifications will encourage the revitalisation of the land around the foreshore area that is needed."

Buildings fronting Marine Parade will be restricted to five storeys and a height limit of eight storeys is proposed at the Ocean Beach Hotel site.

At the Lido site, a building height limit of six storeys will be imposed as it sits on lower land.
The Sunday Times revealed in February that a $15 million concept, included a suspended glass walkway and ocean pool, was part of the revamped development plan for the precinct that had been approved by the Cottesloe Council.

Premier Colin Barnett, the local member for Cottesloe, has been scathing about the "20-year stalemate" on development at Cottesloe beach and said his government would become actively involved.

Mr Barnett today said the new plan was not high-rise development and the majority of those who lived in Cottesloe would benefit from it.

Urban Development Institute of Australia (WA) CEO Debra Goostrey said the uncertainty around the Cottesloe development had gone on for too long, and welcomed the finalised scheme.

"It is imperative that we identify how we are going to manage areas of high amenity such as Scarborough and Cottesloe both for temporary visitors seeking hotel accomodation, those looking to enjoy the beach side cafe experience and the increasing numbers of people wanting apartments near the sea," she said

This information was gathered from:
http://www.perthnow.com.au/news/western-australia/high-rise-buildings-set-for-cottesloe/story-e6frg15c-1226334296115

It would be interesting to hear other residents views, please let me know how you feel about this.

DEB BRADY
0405 570 903

UNDER OFFER

Hi Followers

UNDER OFFER

12 HAINING AVENUE, COTTESLOE

DEB BRADY

0405 570 903





"RBA minutes hint at rate cut"

Hi Followers

I came across this that I'm sure all home owners with a mortgage will like to hear!

AN interest rate cut is still on the cards for May 1, after the release of the minutes of the latest monetary policy meeting.   

The Reserve Bank of Australia's (RBA) April 3 board meeting minutes, released today, echo the message in the announcement on the day.

That message is: the economy has grown a bit slower than expected, with inflation still expected to stay in the two to three per cent target range over the coming year or so.

The minutes also repeated the view that, despite the slower economic momentum and its implication of reduced risks of rising inflation, it would be a good idea to wait to see how the inflation figures panned out before considering a move in the cash rate.

The March quarter consumer price index (CPI) figures, due for release on April 24, will be seen by RBA-watchers as the make-or-break event for a possible rate cut when the central bank's board gets together on the first Tuesday of May.

The minutes also acknowledged the interest rate cuts late in 2011 - which lowered the cash rate from 4.75 per cent to 4.5 per cent in November and then 4.25 per cent in December - but said things had changed in the meantime.

"Since then, (board) members had lowered their assessment of the pace of growth somewhat," the RBA said.

The growth in gross domestic product (GDP) reported in the December quarter national accounts had been less than expected, it said.

"If slower growth in demand could be expected to result in a more moderate inflation outcome, then a case could be made for a further easing of monetary policy."

In the minutes, the RBA said the board would have the chance to review the inflation outlook, based on new data on prices as well as demand and output data, at the next meeting.

"Members judged it prudent to evaluate those data before considering a further policy adjustment," the minutes said.

The minutes also showed that the board had spent "some time" mulling over the weakness in the housing sector.

As well, as has been customary for the RBA of late, the minutes noted that the Australian dollar remained high despite the decline in the terms of trade, the ratio of export prices to import prices, something that would ordinarily put downward pressure on the currency.

Those two factors, along with some rises in bank lending rates independent of the RBA's stance, would seem to improve the chances of a rate cut in May.

The Reserve Bank clearly is not 100 per cent convinced. It warned that the benign inflation outlook depended on an improvement in productivity growth.

Even so, the tone of the minutes suggests fairly strongly that a rate cut is much more likely than not next month.

This information was gathered from:
http://www.news.com.au/money/interest-rates/slow-demand-could-lead-to-rate-cut-rba/story-e6frfmn0-1226329935731

DEB BRADY
0405 570 903

COMING UP NEXT WEEK!!

Hi Followers

Coming up next week.....Newly renovated town house perfect the first home buyers or investor in Mosman Park. THIS WONT LAST, call me today to be the first to view.

DEB BRADY
0405 570 903

"Don’t forget to claim depreciation"

Hi Followers

I cam across this article that I wish to share:

There's nothing more exciting than buying your first investment property and getting that first slip from your property manager to show your rent coming in. However, rental income is just the start. Around tax time, there are even more ways to help you pay off your investment – and one of those is by getting a property depreciation schedule that you can claim on tax.

What is property depreciation?
Just like you claim wear and tear on a car purchased for income producing purposes, you can also claim the depreciation of your investment property against your taxable income.
There are two types of allowances available: depreciation on plant and equipment (such as blinds, carpets and air conditioners) and depreciation on building allowance, which refers to construction costs of the building itself, such as concrete and brickwork.

So how does a depreciation schedule help me?
A depreciation schedule will help you pay less tax. The amount the depreciation schedule says you can claim effectively reduces your taxable income and the savings can be substantial.

Is my property too old to claim property depreciation?
The most common misconception is that only new property can be depreciated and this is simply not true. If your residential property was built after July 1985 you’ll be able to claim both building allowance and plant and equipment. If construction on your property commenced prior to this date, you can only claim depreciation on plant and equipment but it will still be worthwhile.

I bought my property three years ago. Can I still make a claim?
Yes you can. Your accountant can amend your previous tax returns up to two years back.

My property is renovated. Can I still claim?
Yes. The Australian Tax Office (ATO) will need to know how much you spent on renovations. If the previous owner completed the renovations you're still entitled to claim depreciation. Where the cost of renovation is unknown, a quantity surveyor has been identified by the ATO as appropriately qualified to make that estimation.

Shouldn’t my accountant prepare this report?
If your residential property was built after 1985 your accountant isn't allowed to estimate the construction costs. The ATO has identified quantity surveyors as properly qualified to make the appropriate estimate of the construction costs, where those costs are unknown. Real estate agents, property managers and valuers aren't allowed to make this estimate.

Should my depreciation provider be a registered tax agent?
From March 1, 2010, all companies that prepare tax depreciation schedules must be registered tax agents. The Australian Institute of Quantity Surveyors (AIQS) is a "recognised tax agent association", enabling full members of the AIQS who have sufficient experience to gain registration as tax agents.

Will you need to inspect my property?
A site inspection of your property is necessary to satisfy ATO requirements and also ensures that all depreciable items are noted and photographed. This guarantees you won't miss out on any deductions and the documentation can then be used as evidence in the event of an audit.
The best time to get a quantity surveyor to inspect your property is immediately after settlement and hopefully just before the tenant has moved in. But if that's just not possible, quantity surveyors can liaise directly with the tenant or property manager in order to cause minimal disruption.

How much will my property depreciation schedule cost?
The cost of preparing a tax depreciation schedule varies according to the type of property you’ve purchased, location, size and numerous other factors. Quantity surveyors fees are 100 per cent tax deductible.

This information was gathered from:
http://www.apimagazine.com.au/api-online/property-investor-tips/dont-forget-to-claim-depreciation

DEB BRADY
0405 570 903

HAPPY EASTER

Hi Followers

Wishing you a happy Easter and enjoyable and safe long weekend.

DEB BRADY
0405 570 903

Thinking of buying or selling?

Hi Followers

Are you thinking of making a move? Are you thinking of selling the large family home and downsizing or is your family growing and you need that extra space?

Are you looking to purchase a investment property for your portfolio or simply would like to know the value of your home?

If so please feel free to give me a call anytime on 0405 570 903 for a confidential discussion on any property matter.

DEB BRADY
"Bring together buyer and seller expectations".
0405 570 903

"How to maintain a tenant and improve your rental return"

Hi Followers

Thought I share this article for all you that have a investment property.

We all want a great tenant and the rent on our investment property to go through the roof. Both can be hard to find and in terms of rent, even harder to keep increasing.

For example, you might get the great tenant but then be reluctant to notch up the rent in order to keep the tenant happy. Or you might be achieving a good rental rate but feel obliged to continue the same rent year after year. After all, some rent is better than none at all, right?

Let's start with the tenant. Property millionaire and author Jan Somers says keeping a good tenant is all about being fair and the odd improvement every now and then isn't a bad idea.

"It doesn't have to be a complete renovation," she says. "But if something needs fixing, we do it instantly."

In today's current market, she adds some areas such as Redcliffe in Queensland are experiencing an oversupply of rental properties. This might mean landlords actually have to drop their rent, but lowering your rent slightly is often worth it in a slow market.

"A tenant tomorrow is better than holding out to get your $350 per week in three months' time," she says.

"You must have a tenant ASAP, so 90 per cent or 80 per cent of what you think your rent should be is better than 100 per cent of nothing."

If the rent is slightly cheaper, the tenant may also be willing to stay longer.

"Then you don't have the changeover fee where you'd be paying an agent once or twice a year," she points out.

While Somers is generous with her tenants, it's still important to "nudge the rent along" occasionally.
"If the market warranted putting it up $20 or $30 per year, we might put it up at $5 or $10," she says.
Giving the occasional bottle of champagne to your property manager doesn't hurt either.

However, Your Empire founder and director, Chris Gray, is a little bit stricter with his portfolio. Being a savvy Sydney investor, he has no trouble ending a lease if it means more for the hip pocket.
"A lot of tenants won't pay a massive increase, so you're better off getting rid of them," he says.

"People say 'I've got good tenants so I'm not putting the rent up'. But if you have a good property, there should always be good tenants."

The trick, he believes, is to get a good property manager who knows how to negotiate increasing the rent and how to market your property so it's the must-have roof to be under. You can also do renovations but make sure the tenant is paying for them.

"Get the property manager to ask the tenant what they want and then what they'd be prepared to pay for it," he says.

"Add in lost rent down time. With a lot of these things, quite often it's (the renovation) is over a period of weeks. But over the year, the net benefit might then be positive."

This information was gathered from:
http://apimagazine.com.au/api-online/property-investor-tips/how-to-maintain-a-tenant-and-improve-your-rental-return

DEB BRADY
0405 570 903

"Australia’s stable economy lures foreign investor"

Hi Followers

Thought I'd share this article with you:

Australia is attracting high-end residential and prime office investment attention from emerging rich-list cities, according to Knight Frank Australia’s 2012 edition of The Wealth Report.

As Shanghai and Beijing emerge as the most rapid growth cities in regards to high net worth individuals, Australia is increasingly being targeted because it offers a stable economy, business transparency and good education systems; prime factors for locating luxury property and prime office buildings, said the report.

Knight Frank Australia executive chairman Stephen Ellis said if China continues its rapid escalation and commodity demand remains strong, Australia’s property market would ride alongside this growth.
“We are upbeat on prospects for cities like Perth and Brisbane that have strong links to the mineral and resources industries,” said Ellis.

“The stable economy, relatively low debt and attractive yields have attracted many offshore investors to Australia.”

Recent examples of prime office purchases in Sydney include the $395 million acquisition of an office building at 259 George Street by a Singapore billionaire, and the $153 million acquisition of two Martin Place office buildings by a South African investor.

“We are seeing an increasing number of international visitors in our boardroom. These are not always the usual suspects, but super wealthy privates from all over the world, especially Asia, who are hungry to buy Australian property,” said Ellis

This information was gathered from:
http://apimagazine.com.au/api-online/news/2012/04/australias-stable-economy-lures-foreign-investors

DEB BRADY
0405 570 903

SOLD PRIOR TO AUCTION

Hi Followers

SOLD PRIOR TO AUCTION

For further information please contact me anytime.

DEB BRADY

0405 570 903