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When was the last time you improved your property?
When you become a property owner it is important to ensure the property is not only well-maintained, but to ensure that it is up-graded or improved on a regular basis.
As much as we would like the fixtures and fittings within the property to last for ever – the reality is they don’t.
An investment property is like a car – you will need to spend money on upkeep and maintenance.
To assist with improving the property, we recommend that you take a little time out to budget for these expenses to avoid unnecessary financial hardship and stress should you need to replace the carpet, paint the walls or install a new dishwasher or hot water system.

Replacement Item

Total Budget Cost

Replace every ? years

Annual Savings

Weekly Savings

EXAMPLE: Carpets


5 years



Replace Carpets





Replace Window Coverings





Internally Paint





Externally Paint





Replace White Goods





Replace Hot Water System





Miscellaneous Maintenance











Establish a pro-active replacement plan, giving you more control.  Plan to renovate or upgrade the property over a period of time.  The below table template is an example only to help you determine how much extra you should be saving each week.
Plan to renovate or upgrade the property’s fixtures and fittings every 5-8 years.

Benefits of Property Improvements:

    • Ensure that the property is safe and fit for the tenant to reside
    • Capital appreciation of the property
    • Ability to secure better-quality tenants
    • Ability to obtain a higher weekly rent. (8/2008)


    Quick Rental Tip!
    As a property owner, you can maximise the process of attracting quality long-term tenants by ensuring that the property is comfortable to live in.

    Tenants are no different to property owners.  They like their property to be cool in summer and warm in winter. 
    If they experience discomfort during any of the seasons, this could lead to the tenant vacating the property.
    If you know that there is an issue with the temperature of your property, you may like to consider installing ceiling fans, a fire place, central heating or reverse cycle air-conditioning, etc., to ensure that your tenants feel well cared for.
    With these additions you may also be able to achieve a little extra rent and reduce your vacancy periods if your property is competing with others on the market.

    Vacancy Rate

    The Real Estate Institute of NSW has released the residential vacancy rate for Sydney in July 2008 was 1.2%.

    To Do List
    The purpose of an open house is to showcase the property in the best possible way so that it is remembered.  A prospective purchaser will often be visiting a number of properties on any given day and therefore, it is the little things that can have a lasting impact.

    • Ask your selling agent for “honest” feedback on what they feel could improve the marketability of the property.
    • Ensure that open days do not coincide with a planned party or big celebration – this sometimes can be easily overlooked.
    • De-clutter every room in the house, even if it means you have to store things in the garage or off-site.
    • Make minor repairs to walls, floors, fixtures and fittings.  Small professional patch up jobs can be cost effective and have a dramatic impact on the overall presentation.
    • Bleach, whiten or re-grout mouldy tiles in wet areas.
    • Spring clean the home or consider engaging a professional.
    • Clean the yard, mow lawns, clean the pool, weed flowerbeds and trim edges.
    • Leave pets with family/friends.
    • Co-ordinate inspection times for when the house looks and feels the best. E.g. Mornings or afternoons.
    • Bake a cake just before the open house.  The aroma can be very inviting and make the property appear more homely. You could even leave the cake as an extra touch for prospective purchasers to enjoy.
    • Purchase fresh flowers for the living areas.
    • Ensure that the property has lots of light streaming in and feels open and welcoming. 
    • Put the best linen on the beds and best towels in the bathroom.
    • Lock away any valuables.
    • Make yourself scarce.



    Capital Gains Tax Focus for 2007-2008 Tax Returns

    People who do not report capital gains for the sale or disposal of assets including property will come under the scrutiny of the Tax Office this year.
    Last year 1.2 million people reported capital gains on their tax returns.
    Data from state and territory revenue offices will be matched against information reported in tax returns to identify property sales that may involve capital gains.
    The Tax Office has several guides available to help taxpayers understand capital gains tax obligations.
    These are available by calling the Tax office on 13 28 61.■



    The Market is Stirring…

    Now is the time to buy!


    The signs are there! Low vacancy rates across the nation; rental properties in demand; rising rental returns; property prices stabilising and even increasing in some areas; a volatile share market and the expectation that interest rates will remain steady in the short-term.  These are all signs indicating, now is the time to invest in property.


    How to take advantage of the forthcoming property boom

    roperty booms never last, but neither do property busts. So how can investors make the most of the next property boom when it eventually comes around, as it surely will?

    The answer is simple.

    The investment strategy that has worked well for the most successful investors and will work just as well as the next property cycle rolls on is to invest in real estate for long-term capital growth. And capital growth will always occur in our major capital cities in Australia with median property prices increasing by about 10% per annum over a 10 year period.


    It's all to do with the value of the land, which is related to the supply and demand for that land.

    Capital growth is highest in an area where there is a demand for property and the land is scarce.  If you look at Melbourne, Brisbane and Sydney you can instantly see why house prices grow there faster than they do in regional Australia.

    Sydney has almost run out of land because of its geographic boundaries. In Melbourne the perimeters of the city cannot expand because of town planning boundaries.  While there is a huge demand for property in Queensland and in particular South East Queensland, there is still quite a bit of land available for new housing, but as most people want to live near Brisbane or near the water, much of the most sought after land has been taken.

    One thing to remember about scarcity is most people want to live in the most desirable locations. 


    As our next property cycle comes around, as it already has in some parts of Melbourne and Brisbane, it will be the most desirable, the most sought-after areas that start growing first.  These are usually the most affluent areas.  People living in these areas can usually afford to upgrade or improve their houses.  At the beginning of the property cycle these are the houses that will grow in value first.

    What happens to those people who cannot afford to buy in the most desirable areas?

    They buy in the next most desirable suburbs.  This has been well documented in previous property cycles.  Prices will start to increase in the more affluent and desirable areas and then start to ripple outwards to adjoining suburbs.

    How can investors take advantage of this knowledge?

    Firstly, understand the big picture. Understand where we are in the general property cycle.  We are hovering around the bottom of the slump stage of the property cycle in Sydney and well located properties are definitely selling well in Melbourne and Brisbane where the cycle is in its early upturn phase

    Next, become an expert in the suburbs that are going to grow in value first. Get to know those areas so you can pick the bargains in those suburbs near the city, near the water or in the more affluent, the more desirable suburbs.

    If you buy a good property in those areas you are likely to achieve excellent capital growth in the next 5 years.

    Then over the next few years the suburbs ‘one ring’ further out will start to make good investment sense.  It is only near the end of the cycle that the outer suburbs, those that have traditionally been first home owner areas get good capital growth.

    The spread of capital growth from the inner to the outer suburbs is called the ‘ripple effect’.

    Extract Source:

    Author: Michael Yardney


    Now is the time to buy…

    I hesitate to make a list

    Of all the countless opportunities I’ve missed

    Bonanzas that were in my grip

    I watched them through my fingers slip


    The windfalls that I should have brought

    Were lost because I over thought

    I thought of this, I thought of that

    I could have sworn I smelled a rat

    And while I thought things over twice

    Another grabbed them at the price


    It seems I always hesitate

    And make my mind up much too late

    A very cautious person I am

    And that is why I never buy

    When others culled those sprawling farms

    And welcomed contracts with open arms

    I chose to think and while I thought

    They bought the deals I could have got!

    The golden chances I had then

    Are lost and will not come again

    Today I cannot be enticed

    For everything’s so overpriced

    At times a teardrop drowns my eye

    For opportunities I had but did not buy

    And now life’s saddest words I pen…

     “If only I’d invested then!”■ (5.2007)

    Rents are on the rise!


    Rents are on the rise nation-wide.

    Following years of rents increasing just marginally, landlords are now reaping some long over-due rent increases in most rental areas.

    When a tenancy agreement expires, it is a great opportunity to increase the rent and improve your cash flow. But is it always wise to increase rents? – And by how much?

    Rents have been going up as a result of strong demand for rental properties, due to vacancy rates being at an all-time low.

    To determine the market rental for your property, you need to factor in the rate of inflation, and you need to find out the rent being charged for comparable properties that have recently been rented.

    The best way to determine the market rental is to rely on the advice of your property manager, who can tell you the market rental for your property. Professional property managers can refer to their rent roll, data from sources such as the real estate institute in your State, and monitor local advertising.

    If you are relying on local advertising, it is important to take into account that a property may not be at market rent when advertised, but a zealous, over-priced hope of achieving that rent.

    If you’re managing the property yourself, you can always get local property managers to give you an obligation-free rental appraisal.

    What if I am concerned about losing my tenant?

    The more settled your tenants are, the more likely they are to accept a rental increase rather than deal with the upheaval of moving. However, a “significant” rental increase will definitely make some tenants consider leaving.

    If a tenant does not want to remain in the property at the new increased rent, it may be in your best interest to consider the following before losing the tenant:

    ·   Are they reliable with rental payments?

    ·   How long have they resided in the property?

    ·   Do they care for the property?

    ·   How easy would it be to re-rent the property?

    ·   Can you afford to have the property vacant?

    If you are afraid of losing a good tenant or if you just want to be nice, then you might leave the rental untouched, or opt for a compromised increase.

    Another aspect to consider when possibly losing a tenant, is the high cost of finding a new one. You’ll have the cost of the vacancy (for example, two weeks of lost rent), as well as advertising costs and a new letting fee if you use a property manager.

    You might also negotiate to leave the rent unchanged if you need to have the tenant on side, for example, if you’re planning to renovate soon or wish to sell the property in the near future.

    Token Rental Increase

    It is best practice to increase the rent each year, even if it is a minimal amount. Otherwise the tenants may start to expect that the rent will stay the same.  This may make it more difficult to increase the rent to market value down the track.

    A token rent increase could be $5 to $20 depending on the actual weekly rent.

    When dealing with rent increases with quality tenants you may not want to loose, you could state that market rent would involve a $20 rent increase, however, as they are a valued tenant the landlord has agreed to a $10 increase.  This can present a win-win situation to both parties.

    Market Value or Above?

    There are property owners that are feeling the pressure of interest-rate rises and as a result wish to raise rents by more than a token amount. But sometimes it can be detrimental to be too greedy. So how far can you push the tenant?

    If you ensure that the requested rental increase is in accordance with the market rent, you should be ok.  If a tenant wishes to move out of your property due to the increase, they still have to find a comparable property.

    So what if you’re struggling with cash flow? Is it possible to ask for a rent above the market rate?

    Anything is possible!  You can ask for a rent above the market rate – but will you find a long-term caring tenant.  Some newcomers to an area may be unaware of market rents and pay what you asking.  But eventually they will realise that they can get the same property for less rent and move out.  You want to avoid high tenancy turn-overs as it can lead to increased wear and tear and a greater loss of rent in the long-term with extended vacancy periods.  Over-priced properties can also attract undesirable tenants that cannot rent anything else.

    You can be confident that our office is constantly monitoring the market rent on your behalf and understands theimportance of rental increases.  Even it is just a token increase. ■ (5.2007)

    Pending Property Maintenance…

    Now is the time to spend money


    With the end of the financial year fast approaching (less than eight weeks to go), now is the time to consider actioning any pending property maintenance.

    By attending to maintenance prior to the end of financial year, you can claim the tax benefit immediately in your tax return.  It may also help reduce your taxable income if needed.

    It is important to note that all work carried out on your investment property may not be an immediate 100% tax deduction.

    Some maintenance, building renovations and improvements may not be considered a taxable expense – but a capital appreciation cost.

    Before making the decision to spend money on your property to assist with reducing your tax, we strongly recommend that you contact the Australian Taxation Office (ATO) or your accountant.■(5.2007)


    Rental Market

    The Real Estate Institute of NSW has released the residential vacancy rate for Sydney in August 2006 was 2.1%, it is more or less the same as the beginning of the year. We wish to inform you that the rental market is quite stable at the moment. We shall review the rental in accordance to the market movement and advise the landlord if the rental need to be increased in due course. (10.2006)

    Why do properties remain vacant?

    Our office understands that many investors rely on the weekly rent to meet mortgage commitments. You can be assured that every endeavour is taken to minimise vacancy periods.

    Listed below are some reasons why properties may remain vacant for an extended period of time?

    The rent is too high

    The market and the tenants determine rent. We are constantly monitoring the market rent to ensure that you are receiving the maximum return on your investment. High rents can lead to long-term vacancies or high tenancy turnovers, which ultimately affects your income.

    High Vacancy Rate

    If there is a high ratio of properties to tenants (more properties than tenants) it will have an affect on the vacancy factor. Tenants have more position to negotiate on rents.

    Poor Presentation

    It is important that the property is maintained in an excellent condition to attract the same quality of tenant. A tenant will often have a choice between two or three properties.

    Accessibility to local facilities and transport

    Often the property can be maintained in an excellent condition, the rent is priced at market value and yet it still remains vacant. This could be due to its location. Tenants today (due to the supply and demand of properties) can be choosey.

    Often they require a property that is close to town, shops, clubs, the beach or water, transport or schools etc.
    Every endeavour is made to locate a quality tenant to suit your investment property and we will keep you updated on a regular basis on our progress with sourcing a tenant. (10.2006)

    Notice to Vacate -“2 day turnover”

    When a tenant gives notice to vacate the property, it is our number one priority to quickly re-list and advertise the property for rent, to reduce the possibility of the property becoming vacant for an extended period of time.
    However, please note that our office likes to adopt the “two day turnover” policy. This simply means that we like to allow two days between the tenant vacating and the new tenant moving in, so that we have adequate time to attend to unexpected work that may need attention from the previous tenant as well as accommodating minor hiccups that may occur with the vacating transition. Otherwise, if the tenant moves into the property when it is not 100% ready, it can lead to unhappy tenants and issues at the end of the tenancy. (10.2006)

    Rental Shortages bring good times for investors
    The latest Real Estate Institute of Australia statistics show that rental vacancy rates have fallen in almost all capital cities as renters scramble for accommodation and force up rents.
    These lower vacancy rates are due to a severe shortage of rental stock as new investors are currently avoiding the property markets as well as poor housing affordability forcing many would–be home purchasers to turn to the rental markets.
    These dual forces have pushed up rentals. This finally delivers good news for landlords, some of whom have had to drop the rentals for their investment properties over the last few years to meet the market.
    The figures show Melbourne had a vacancy rate of 1.8%. Leading independent property consultancy Metropole Property Management reports its lowest vacancy rates on record, with a queue of prospective tenants every time a property is open for inspection.
    Vacancy rates fell in both Sydney and Brisbane by 0.6%; to 2% and 1.5% respectively. Apartments recorded the strongest growth in the quarter.
    The booming Perth market continued to lead the country, with apartment rents soaring 29.4% in the year to March.
    In Brisbane apartment rentals rose 8.7% to $250 a week, up an impressive 11% for the year.
    Rental growth for apartments in Melbourne rose 4.5% and Sydney had a more moderate increase of 3.4%.
    With little new investor stock likely to come on the rental market over the next year and affordability unlikey to ease with the prospect of another interest rate increase later in the year, rents in our capital cities are likey to continue rising strongly over the next 2 years.
    Melbourne and Sydney rentals are likely to rise by between 6% and 8% for the next two years, while Brisbane rental increases could be stronger – up to 10% over the next 12 months. (6.2006)

    Tenant databases

    For more than a decade, access to tenancy databases have formed part of a real estate office’s daily tenant selection process as well as the tenant vacating process.

    There are specialised tenant database agencies established nationally, who track, record and monitor tenant details that are accessed by reputable real estate agencies as part of their reference checking process.
    A tenant database will record a variety of information on a tenant, which include; if they have been a good tenant or a defaulting tenant. The reasons for listing a tenant and when a tenant can be listed vary greatly from state to state.
    Our office is also a member of TICA( Default Tenancy Control Pty Ltd ) and has access to the
    TENANT DATABASE when processing a new tenancy application, so that we can ensure
    our tenant has good reference and give a better protection to our landlords.

    If a tenant is listed on a database for an outstanding debt or breach of agreement (in accordance with state legislation) this can have a great impact on the tenant’s ability to secure rental properties in the future and in many instances results in the tenant settling their debt to receive a “clearance”.
    If a tenant does vacate a property with an outstanding debt, you can be confident that our office will list their details on a tenant database.
    It is important to note that sometimes reclaiming monies through this avenue can take extended periods of time and we rely on other real estate agents to notify us of the tenants.
    However, we are finding that patience and persistence does prevail in the long term and the debt eventually catches up with the tenant. (10.2006)

    Property Market
    Since the Reserve Bank’s widely anticipated rate rise of ¼% in May, the property has taken another wash. However investors still prefer property over other assets such as shares, Kerrie O'Brien of Sydney Morning Herold wrote.
    Property is not the sexiest investment option in the country right now. But a significant number of Australians still prefer to invest in property over other assets such as shares.
    In May 2004, the Reserve Bank said that 10.3 per cent of Australian households had an investment property. More recent research by market intelligence suggests that figure is now closer to 12 to 13 per cent. Rather than buying into short-term pessimism, it is an opportunity to invest in good quality property.
    The findings from the Residential Real Estate class report of NERA (economic consulting) & Mercer (finance and risk consulting) examined property’s performance between 1982 and 2005. It showed that capital returns from property averaged 8.3% per annum, while total return i.e. capital gains and rental income averaged 14.8% over the same period.

    Fundamental influences such as supply and demand are the main drives for future property return. Prime candidates for purchasing properties these days tend to fall into two groups. Not surprisingly, the first is the baby boomers, who have considerable equity in their homes, many are conscious they need to do something outside of superannuation to boost their retirement income. Interestingly, the other emerging group is aged between 20 and 30. As first-time buyers, they are exempted from stamp duties for property under $500,000 and have $10,000 cash rebate (an increase of $3,000) from the Government irrespective of the value of the property. Many "generation Y” are bunkering down, saving their pennies and getting into the market. They tend to focus on the investment potential of their first home. They view it as a stepping stone that can help them to set up later on.

    Australians, as they always are, committed to real estates. (6.2006)

    Final Inspection

    Carrying out a final inspection when a tenant vacates the property involves comparing the condition report completed at the commencement of the tenancy with the final condition that the tenant leaves the property at the end of tenancy.
    Legislation states that the tenant must leave the property in the same condition as it was at the commencement of the tenancy, taking into consideration fair wear and tear.
    It is a common expectation by landlords that the property is to be left in a perfect condition as it was at the commencement of the tenancy, without taking into consideration fair wear and tear.
    The dictionary definition of clean is: not dirty, free from dirt or impurities, however you must take into consideration fair wear and tear, when determining if the property has been left clean.
    The term fair wear and tear is not specifically defined in the Act or the Tenancy Agreement and therefore is open to interpretation.
    A generalised definition of fair wear and tear is: something that happens during normal use or changes that happen with aging.
    So where do we draw the line? This has been one of the ongoing challenges for many years.
    It is a challenge that we as property managers have to deal with every time a tenant vacates your property.
    Our office has very high expectations and standards when it comes to carrying out the final inspection. Albeit, we are starting to discover that our expectations and standards are sometimes considered above the industry standard and what the legal system (Small Claims Tribunal Courts) considers acceptable, allowing for fair wear and tear.
    When determining fair wear and tear the following should be taken into consideration:
    · The number of tenants that resided in the property;
    · The term of the tenancy; and
    · The age of the fixtures & fittings
    For example:
    There is going to be a greater allowance for “fair wear and tear” if you have a property with a family of four children, who resided in the property for five years and no improvements/replacements were carried out with carpets, curtains & painting of walls etc - compared to a single couple who resided in the property for 6 months where the carpet, curtains and walls were painted in the last 12 months.
    Areas that may be considered fair wear and tear:
    · Holes in fly screens
    · Marks on carpets
    · Marks on walls
    · Marks on curtains
    · Insects in light fittings
    · Dusty window tracks
    · Tears in lino or cracks in tiles
    · Rust on stove & oven

    Once again, the above areas will depend on the circumstances of the tenancy.
    Our property management department has a reputation for offering people clean well maintained properties to live in.
    We will continue to adopt the policy of “if it’s clean when a tenant moves in, then it will need to be the same when they move out”.
    While adopting this policy, it is important for landlords to be aware that in some circumstances you maybe required to attend to a “post-tenant” clean if it is considered fair wear and tear.
    A well-documented entry condition report will also strengthen our case if a dispute arises at the end of the tenancy. (10.2006)

    Why you need a property manager?

    When you engage the services of a Property Manager who is a member of the Real Estate Institute of NSW (REINSW) you know that your investment, regardless of its size, will be managed professionally. REINSW members are constantly updating their skills by attending on-going education programmes designed to keep them up to date with legislative changes and market trends.

    Written Agreement

    Once you have found a real estate agent to let and manage your investment property, your agent is required by law to have you sign your instructions in the form of an Agency Agreement. The Real Estate Institute of NSW produces a standard Letting Agency Agreement and Management Agency Agreement.


    There are many advantages in engaging a professional to manage your property. The main one is peace of mind - knowing your investment will be managed professionally. A managing agent knows the market and ensures the maximum return on your investment. In using a managing agent you will avoid direct confrontation with the tenant and, should there be a need for representation before the Residential Tenancies Tribunal, your managing agent is able to act on your behalf.


    Managing agents have a thorough understanding of the Residential Tenancies Act, the Retail Tenancies Act and the Strata Schemes Management Act. Their skill and expertise will reduce the risk of non-compliance with these Acts and save you from facing the possibility of severe financial penalties through non-compliance. (10.2006)

    Understanding investment property

    Repairs and improvements can be a tax deduction minefield in investment property. The Tax Office provides the following useful guidance to clarify some issues which often cause confusion.

    What is a repair?

    A repair replaces a part of something or corrects something that is already there which has become worn out or dilapidated. A repair is usually occasional or partial, and restores something to its original efficiency. Repairs correct damage which has occurred through normal wear and tear , the effects of natural causes or by accidental or deliberate means.

    The important point here is that repairs are generally partial. Replacing a faulty filter in a dishwasher may be a repair; replacing the dishwasher generally is not.

    You may be able to claim an immediate deduction for expenditure on repairs if you’re using your property to generate income. However, if you’re claiming repairs as a deduction, you must be aware there is a difference between a repair and an improvement, as you cannot claim immediate deduction for improvements. However, you may be able to claim a capital works deduction for improvements.

    Although there is a difference between “ maintenance “ and a repair , you may generally claim an immediate deduction for maintenance costs.

    What ‘s an initial repair?

    Quite often when you buy a rental property, there may be defects which need to be fixed before your first tenants can move in. A repair is not an initial repair simply because it is the first repair made after you acquired your property. Broadly, it is an initial repair if the defects, damage or deterioration in need of repair existed when you acquired the property.

    Basically, if you buy a property to generate income, the cost of bringing that property to a state where it’s suitable for tenants is part of the cost of its acquisition, not a cost of repairing defects that arose while you were renting it. You can’t claim an immediate deduction for initial repairs, even if you start to rent the property before you carry out the repairs. Generally the cost of initial repairs may be included in the CGT cost base of your rental property

    What’s the difference between a repair and an initial repair?

    The difference is that generally repairs made to defects that arise while your property is producing income are tax deductible, while initial repairs are not because they lack a connection your use of the property to produce income. Essentially, an initial repair is an additional cost of acquiring your property or an improvement to the property.

    If you’ve spent money on fixing a problem which existed when you bought the property, it’s a capital expenditure, even if your tenants move in before you make the initial repair . It doesn’t matter whether or not you knew the property needed initial repairs when you acquired it , or whether the purchase price of your property reflected the need for repairs.

    Breach of Lease

    A lease may be breached in many ways, rental arrears is the most common form of breach, a tenant need only one day late with his rent, the lease is breached.

    It’s really a nightmare to landlords that their tenants do not pay the rent on time. In fact, many tenants do late when paying rent, you may not aware how we can ensure the rent is paid, so we would like to use this opportunity to advise you of the following procedures that we have taken:

    1. If the rent is late for one week, reminders are sent to tenants on the 8th day in arrear followed by phone call. If this is the first payment from a new tenant, courtesy call will be made once the rent is in arrears.
    2. If the tenant becomes 14 days in arrears, on the 15th day a Termination Notice is issued. The issue of the notice is mainly to threaten the tenant and urge them to pay the rent as soon as possible.
    3. Occasionally, an order from the Tenancy Tribunal will be applied if the tenant still fails to pay rent upon the vacation date of the termination notice.

    We shall inform our landlord if an order from the Tenancy Tribunal is required. If you wish to be advised prior to the application of the tribunal, please instruct our office in writing. (10.2006)

    How to stay ahead of the rising interest rate cycle

    While the interest rate hikes will or have put a damper on property investment markets, low vacancy rates across the nation will eventually lead to higher rents and in turn strengthen property demand.

    How to beat rising rates
    Despite the nerves that are so easily frayed by the current cycle of interest rate increases, this really is a chance for you to re-organise debt portfolios and make the most of the debt you have.
    Interest rate rises can create opportunities if borrowers know where to look. Having been through a period where rates were at their lowest in 30 years, many borrowers may have grown complacent.
    Here are some tips to upgrade your household’s borrowing arrangements and stay ahead of the rising interest rate cycle.

    Fixed Vs Variable – Should you fix your loan or not? That decision we are going to leave up to you… but here are some suggestions.

    Don’t overlook the each way bet options by choosing a loan that can be split to fixed and variable, or fixed and interest only. This way, when variable rates rise it will only affect a portion of your loan.

    Fortnightly Payments – Interest on a mortgage is calculated on a daily basis. When you pay fortnightly, you end up making one additional payment in a year, thereby reducing the amount against which you pay interest. It can also be considered compulsory savings if you find yourself in financial hardship and need to draw on this additional payment.

    Direct Salary Crediting – From the minute you credit your mortgage account with your salary, you will be saving interest and speeding up the time it takes to pay off the loan.

    Regular Additional Payments – Interest is calculated on the outstanding balance on a daily basis, but charged monthly in arrears. There can be huge savings to the interest charged by simply increasing your minimum monthly payments. If you can top up your scheduled payment by just $25 per fortnight, you can make a great saving.

    Consolidate your Debts – Do you have lots of small debts, such as credit cards, personal loans, car loans, store accounts, loans to family and friends?

    It makes sense to put all these annoying payments under your mortgage. It will make a big difference to your monthly cash flow and often the interest rate is a lot lower. The trick is to maintain the same monthly payments if possible and those debts will be gone in no time.

    Use your Credit Card – Using the up to 55 days interest-free feature of your credit card for your daily expenditure (petrol, food, entertainment, etc.) is a clever way of reducing your mortgage. Let the balance grow until the day before the bill is due. Arrange a direct payment from your home loan to your credit card before the due date, and no credit card interest should be payable.

    We strongly recommended that you seek the guidance of a professional accountant, lending officer or financial advisor to guide you through the process.■ (1/2007)

    Appointing Trades People
    When engaging a trades person to carry out work on your property, it is important to take the following into consideration:
    • The trades person must be licensed to carry out the work;
    • The trades person must be adequately insured; and
    • The trades person must have an ABN number to reduce administration time & costs.
    We abide by this process to ensure that you are protected, should damage or injury occur as a result of poor workmanship.■ (1/2007)

    Are you maximising the tax depreciation and capital allowance available?

    All types of income producing properties have substantial taxation benefits available to be claimed as a tax credit. Many property investors are missing out on literally thousands of dollars in lost tax depreciation deductions.

    Both new and old properties will attract some depreciation benefit that the owner is able to claim as a tax credit. A common myth is that older properties will attract no claim. Therefore, it is worth making an enquiry about any property.

    When a property owner has not been claiming deductions for tax depreciation, previous financial year’s tax returns can be amended. The Australian Taxation Office (ATO) allows for up to the previous four year returns to be amended, in some instances the ATO may have to pay you money back!

    The depreciation benefit available depends greatly on the type of building, its age, use and fit out. Based on the Diminishing Value method of depreciation, the following scenarios are provided as an appropriate guide (refer to table below)

    The maximisation of a depreciation claim on any building requires a combination of construction costing skills and an excellent knowledge of Tax Legislation. This rare combination of skills has resulted in a select number of quantity surveying firms specialising in property depreciation.

    Quantity surveyors are recognised by the Australian Taxation Office to be appropriately qualified to estimate building costs for the purpose of depreciation. Your accountant should recommend a specialist to complete such a report, to maximise the depreciation benefits from your property. ■ (1/2007)
    Source: BMT & ASSOC Pty Ltd

    Australian’s Real Estate market
    worlds most transparent

    Australia has been ranked number one worldwide in real estate market transparency.
    The finding was reported in the 2006 Jones Lang LaSalle Real Estate Transparency index, which compared real estate market transparency in 56 countries.

    Australia was closely followed by the USA, New Zealand, Canada and the UK.

    According to Jones Land LaSalle’s Head of Research and Consulting, “Australia sets the world standard for transparent and sophisticated real estate markets, but over the last two years we have seen significant improvements in many other parts of the globe”.

    Overall, 14 countries of the 56 countries have moved up a full tier and none have moved down. We are seeing more rapid improvement due to higher securitisation levels and higher cross-border flows around the globe. ■ (1/2007)

    For more information visit:
    Source: Real Estate Institute of Australia

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