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Jun 5, 2022
4 things to consider as a property investor
Employ the experts Regulations around the property including tenancy legislation and taxation are areas that change over time. This is where qualified and experienced experts in property management and accounting can assist in making life easier during your investment journey. Employing a qualified and experienced property manager can remove the stress that can come with managing your own investment property. They will understand the relevant legislation and processes required to maximise your investment. A great accountant can also assist with removing the stress of tax time and ensure that you are receiving the best possible returns on your investment while working with you to improve your investment strategy and achieve the financial goals that you are aiming for. Insure your investment One mistake the property investors often make is failing to take out adequate insurance cover over their investment property. Even the best-laid plans cannot control everything that happens, and a good insurance policy can help in covering for cases where the unexpected happens. It’s important to consider not only building and contents but also landlord insurance which will cover your income in the event should a tenant fall into arrears or damage occur to the property during the lifetime of tenancies. Maintain the property Properties will age over time and with tenancies, even in your own home items will wear or break. Setting aside funds to account for the inevitable will ensure that you are reducing your stress levels when it comes time to need to fix an item at your investment property and guarantee that not only the tenant has functional items in the property, but you are also keeping the property up to date with the latest market. Allowing fixtures and fittings in the property to fall into disrepair over time can end up being a costly expense in the long run and preparing for maintenance can keep your investment in good order. Keep up to date with the current market A good property manager can assist you with ensuring that your property is priced at the right rate in line with current market conditions. Be aware of what the trends are in the area for your investment and talk with your property manager to ensure that you are achieving the best rent for your investment. You may need to also consider recent market conditions and any current tenancies that may be impacted if you increase rents. Weigh up the options of the impacts of increasing the rent, vacancy periods and excellent tenants. Have you considered buying an investment property in a different town or city to your own? Take a look at what is available in Ipswich. Feeling the cold this winter? Rising Energy costs?
May 15, 2022
The pandemic property market
The property market has not been exempt from global changes that the COVID pandemic has caused. The two years since the pandemic have been tumultuous, but also lucrative for investors and the industry as a whole. Key points from a recent CoreLogic report provides a snapshot of the effects of the pandemic within the marketplace. Whether it was the economic and employment-based effects of city and state lockdowns, the introduction of government home-buying and building incentives and the increasing popularity of regional living and low-density housing, the era of COVID has left its legacy on the composition of buyers and dynamics of the housing market. Home values eclipse previous records, rising by 25 per cent Despite an initial dip for the property market during the pandemic, housing values rose 24.6 per cent between the end of March 2020 and February 2022. Cumulative change evidenced in the CoreLogic Home Value Index since the onset of COVID-19 shows a relatively small decline at the onset of COVID-19. For example, sales and listings volumes are far more affected than prices. Home values declined -2.1 per cent between April 2020 and September 2020, before soaring amid low-interest rates, high household savings, government grants and a sharp reduction in the supply of housing. By February 2022, CoreLogic estimated the total value of the residential real estate to be $9.8 trillion, up from $7.2 trillion at the onset of the pandemic. This is a significant change for the property market. Rents rose 11.8 per cent to record highs while gross yields fell to record lows Annual rent value growth throughout 2021 was at its highest level since 2008. Median advertised rents in Australia have increased from $30 per week to $470 per week. In New Zealand, that figure is closer to $530 for a four-bedroom home. For investors who have recently purchased long-term rental accommodation, rents may have increased due to higher purchasing prices. Through the pandemic, there has been a clear shift in rental preferences toward lower-density housing options, where the upwards pressure on rents has been more substantial. This trend has evolved over the past year, with rental affordability gradually deflecting more demand towards higher-density rental options, where the cost of renting is more affordable. Housing debt levels scale new heights However, gross rental yields have declined. This is because gross rental yields are a portion of the purchase price of a property — and purchase prices of properties have grown 24.6 per cent since March 2020, outpacing the 11.8 per cent rise in rents. As housing growth has started to slow, record-low gross rent yields appear to have begun stabilising. Although total outstanding credit reached over $2 trillion in January, data shows monthly new finance borrowed for the purchase of property continued to hit fresh record highs through January 2022, at $33.7 billion. High levels of housing debt, particularly where it has grown faster than incomes, create vulnerability in the economy. However, it is important to frame debt levels in the context of high asset values and relatively low-interest costs. Official data shows housing interest payments to income have fallen to their lowest levels since 1999 — and household debt has trended lower as a portion of housing values. CoreLogic prides itself on the most accurate real estate data in Australia. Smoke alarm legislation changed on January 1 2022
May 6, 2022
Don’t forget to organise a depreciation schedule
The end of the financial year can be a busy time for property investors, that’s why BMT Tax depreciation are here to remind you of the benefits of arranging a depreciation schedule before 30 June. What is depreciation? Depreciation is the natural wear and tear of a building and the assets within it over time. The Australian Taxation office (ATO) allows owners of income-producing properties to claim depreciation as a tax deduction. There are two types of depreciation. Capital works (Division 43) is claimed on the building’s structure and items that are permanently fixed to the property. And plant and equipment (Division 40) are items which are easily removable from the property or are mechanical in nature. Depreciation is a non-cash deduction, meaning an investor doesn’t need to spend any money to be eligible to make a claim. Because of this, depreciation deductions are frequently overlooked. Failing to claim depreciation can mean missing out on thousands of dollars. During FY 2021/22, BMT found investors an average first year deduction of almost $9,000. Claim the cost of your schedule straight away To maximise deductions and claim all eligible assets, you should organise a tax depreciation schedule as soon after you purchase a property as you can. A BMT depreciation schedule has a one-off cost that lasts the life of the property (forty years) and will ensure all claims are maximised and are fully ATO compliant. The cost of the depreciation schedule is 100 per cent tax deductible, and if you order a depreciation schedule before 30 June you can claim the fee straight back that financial year. This also reduces the risk of forgetting to claim the depreciation schedule’s fee as a deduction in the following financial year. Partial year claims You don’t have to have owned a property for a full financial year before claiming depreciation deductions. You can claim depreciation if you have owned a property for a short time before the end of the financial year, even if that is weeks or days. The depreciation value of the assets will be calculated by how long the property has been owned. For instance, if the property has been owned and rented out for a period of three months, the owner is eligible for 25 percent of the yearly deductions. Receive payments regularly using Pay as You Go (PAYG) By arranging a depreciation schedule sooner, you can access additional cash flow throughout the year by incorporating a PAYG withholding variation. With the help of your accountant, submitting a PAYG withholding variation will estimate your expected tax return for the financial year, allowing your employer to take less tax out of your wages. It’s important to speak with your specialist quantity surveyor to organise a tax depreciation schedule before submitting a PAYG withholding variation as this information will be used to help accurately estimate your tax return. You will still need to visit your accountant at the end of the financial year so they can calculate the actual amount of tax liability. Claim missed deductions It is always advisable to stay on top of your finances by claiming deductions in the same applicable year, as delaying your claim will only add extra confusion and stress to your next tax return. However, if previous depreciation deductions weren’t claimed, the ATO allows you to recover missed payments from past financial years by adjusting your tax return. This is useful for investors who were previously unaware of depreciation deductions. Obtaining your tax depreciation schedule before June 30 is important if you want to maximise your returns and keep your finances on track. To find out how you can organise a depreciation schedule before 30 June contact the tax depreciation experts BMT on 1300 726 728 or Request a Quote. Article supplied by BMT Tax. Bradley Beer (B. Con. Mgt, AAIQS, MRICS, AVAA) is the Chief Executive Officer of BMT Tax Depreciation. Please contact 1300 728 726 or visit bmtqs.com.au for Australia-wide service. Also: Smoke Alarm Legislation changed Jan 1 2022
Apr 29, 2022
Apartment living and the benefits of buying into it...
It’s fair to say that the national housing market is steadily peaking this year, hot on the heels of unprecedented price hikes in 2021. How is this affecting apartments? 2022 is signalling a turnaround in the unit rental markets and unit price growth could outperform that of houses, according to the SQM Housing Boom and Bust Report 2022. “With houses being overvalued, apartments are relatively affordable and are expected to be in greater demand from an expected rise in net migration from interstate and overseas with many borders now open,” says Louis Christopher, the managing director of SQM Research. In addition to the resurgence in apartment living that is trending in industry circles this year, there is another benefit of owning or investing in an apartment. That is the appeal of low-maintenance lifestyles. Remember the joy of cleaning gutters? Or mowing the lawn on a hot afternoon at your family home? Unlike a house that requires regular maintenance, apartments are a far cry from your weekend being replaced by a never-ending list of chores. Your apartment list might only be a fraction of what it once was, but it’s still vitally important for your property’s long-term value not to neglect regular checks. Maintenance diary helps to track ongoing needs Create a maintenance diary so most of the work can be completed on one day of the month, freeing up the rest of your time for what you prefer. It’s recommended, for example, that painting should be refreshed every five to eight years. And it’s best for longevity if three coats are applied to each repainting project. The good news is that apartments are generally more compact (i.e. manageable) than a full-sized house and thus are designed to halve the painting time. Carpet cleaning is another, together with window cleaning and ensuring your window furnishings and flyscreens remain in good order. Balconies are one of the biggest sources of leaks, so keeping yours tidy can prevent major issues in the longer term. If the budget is tight, consider defraying costs by pooling resources with neighbours and booking tradies for consecutive jobs. Who knows? You may even gain a discount. Checklist for buying apartments The Apartment Buyers and Owners education kit, produced by the Australian Apartment Advocacy, is a great place to start when considering an apartment for investment or personal lifestyle choice. The kit covers what questions to ask when looking to buy, information about the sales contract, a pre-settlement checklist, details about defects and how your rights are protected. Greg Watson CEO RealWay Australia
Apr 6, 2022
It's Tax Time. How Did COVID Affect your Net Worth?
It's Tax Time! If you're like me, tax time can be one of those times of the year which can go either way. A great refund can get you excited for a new financial year and a tax bill can get you down a little bit. Those two feelings kind of sum up the last year in the Real Estate market. It has been a few years of change for the Queensland Property Market. From the initial slowdown caused by COVID in the market and the fear of property, price crashes as we came out of the first lockdowns, through to a surprising resurgence in the market with fast sales and price growth over the last six months. The lack of properties for sale, low-interest rates, and government grants have been the biggest drivers of price growth. The shake-up to people’s lifestyles caused by the lockdowns and restrictions has also been driving the demand from buyers seeking a more suitable home in this brave new world we now live in. The RealWay team has ridden the property wave over the last financial year. We are seeing properties exceeding the prices paid in the 2014/2015 boom and even units are now moving quickly and for good prices. What's In Store for us Next? Will the prices keep going up? Will they plateau and stay steady? Is the bubble going to burst and property prices crash? The looming federal election for May 2022, the inevitable interest rate increases, and the banks tightening up lending will all surely have some negative impact. On the flip side when the borders reopen and immigration & tourism ramp back up, we would expect to see some positive effects on the economy and property pricing. So, what does it all mean for your property? Good news or bad news... What is your True Net Worth? It’s hard to know where your properties sit unless you watch the market every day. Lucky for you that's exactly what we do – every day we are appraising property, selling homes, and just giving people good honest advice. While we don’t have a crystal ball to predict the future, we do have our finger on the pulse and can accurately price your property in the current market. Did you Buy an Investment? If you have bought an investment property this year, then you should make sure that you claim any depreciation that you can. Your tax adviser will be the best place to get specific advice about your personal situation, but BMT Tax Depreciation Quantity Surveyors can prepare a depreciation schedule for your accountant to use. For more on how to increase rental income and deductions you can Read More Here or you could talk to our property experts. Get in Touch for Free Advice! Why not start your new tax year by being informed about what your home is worth? Give us a call, send us an email or a text and if you want to see how your home has weathered the storm of 2020/21, we are more than happy to help. We work weekends and after hours, it’s never a big issue and it only takes 15 - 20 minutes to get a quick update on price. Greg Watson CEO RealWay Australia
Feb 17, 2021
5 Tips for Great Real Estate Social Media Advertising
It’s a given these days that your business needs to be on social media. Consumers spend 1 1/2 hours a day glued to their phones, scrolling through different social platforms. If your business doesn’t have a presence it may as well be invisible. So how do you ensure your presence on social media is as effective as it can be? 1. Set goals Now, you’re not going to hit a million followers overnight. Let's face it, as a real estate on social media, you probably never will. But setting yourself achievable goals will ensure you move in the right direction. For example, if you’re managing your social media in-house, it’s important that you post regular, relevant content and it doesn’t get forgotten amongst the million other things you need to do. Set yourself a goal to post once per day and stick to it. Be sure to look at where you are now and ask where you want to be in 3 months’ time? Whether that’s to grow your social accounts to gain more followers or drive more traffic to your website. Maybe you want to achieve higher levels of engagement on your posts. Whatever the aim, take the necessary steps and stick to them. 2. The Vendors should be Involved Social media is a great way to interact with potential new businesses. It’s also a great way to engage with current clients so make sure you tell them that you’re on social media. This will raise your following and engagement levels. More importantly, it will mean that the people following you are the most relevant people possible. Thus, when you advertise a new offer, service, or property, the right people are already there in front of you! Ask your happy clients to leave positive reviews on Facebook and Google. This will help your Google ranking and show you to be the go-to agent in the area when new potential clients research your company. Not to mention 71% of consumers who have had a good experience on social media with a brand are likely to recommend it to others. 3. Post relevant content Posting is the most important aspect of a successful social media campaign. Don’t be fooled by companies out there who offer social media management for a ridiculously low monthly fee. Their content is most likely regurgitated, automated and irrelevant. Ensure you don’t post the same things every day. For example, property after property posted in the same way will just lose you,r followers. A strong social media campaign requires a healthy mix of post types that you need to review on a regular basis. Here are some types of content that tend to work well for agents to give you some ideas. Local property news Local area information Hot properties. Top tip: try boosting these types of posts on Facebook to drive more buyers/tenants to your stock. After all, they say Facebook will be the next property portal! Fun posts to drive engagement. For example, running a competition, asking your audience questions, getting them to “vote” on something, the possibilities are endless! Human interest posts. Now, this can be anything from staff shoutouts, and successful settlements, to charity work undertaken by your team. Top tip: social media is also a great way to raise money for charity events 4. Connect with local businesses As a real estate agent, you’re constantly being squeezed for your fees by competition and online agents. Consequently, you should make sure consumers know why you are worth your fees and give them the value. Social media is not only a great way to improve customer service, it’s essential for showing how connected you are in your local community. One way you can show this is by interacting with local businesses online. You can even take this a step further and start doing joint promotions – this will cut the cost of your marketing campaign in half and show potential customers that you know everyone and everything going on in the area. Hence, you’ll leave them no choice but to instruct you to sell or let their property. 5. Review your campaign It’s all well and good following the above steps but if you don’t review your campaign results, how can you hope to improve? It’s literally Einstein’s definition of insanity, “Doing the same thing over and over again and expecting different results”. Social media is all about trying new things, but if something doesn’t work or doesn’t get the results you were hoping for, don’t despair. Review why it went wrong and try something new! I hope this blog was helpful for those of you looking to do more with social media. If you’re going to take anything away from this, let it be this. Social media management shouldn't be an afterthought. It’ll take time, dedication and thought to make it a success but when you get it right, you’ll wonder how you ever operated without it. RealWay provides more of this kind of support for your business. To find out more contact Greg Watson CEO on M: 0407 122 398 or E: greg.watson@realway.com.au