If you want to become a superstar property investor and be on the path to financial freedom, then you’re going to need this guide to invest in a positive cash flow property!

Investors that follow a positive cash flow strategy understand that living off passive income is the key to an early retirement – and the only way to do that is to make our money work for us, not against us.

Thankfully, putting together a robust plan isn’t rocket science – anyone can do it! You just need to know the fundamentals of investing in income-producing properties, and that starts with knowing your current cash flow.

 

GET TO KNOW YOUR CASH FLOW

There are three parts to your cash flow as an investor: your wage, your tenant and tax (more on this part later).

Basically, if your tenant can pay the rent which covers your mortgage, you’re already in a solid cash flow position. The longer you own real estate, the more likely this is to happen.

Now the goal with any property is to not be forking money out of your own pay check to hold it. That’s why we need our cash flow to be set up properly with the right systems in place – like buffer accounts.

 

TIPS FOR MANAGING YOUR CASH FLOW

Here are four tips and strategies for managing your cash flow to help you generate additional income.

One: Measure your incoming and outgoing

The foundation of any good cash flow plan is a tool to measure the money coming in and out each week, fortnight or month.

Naturally we lean towards budgets as the best tracking method, however what this looks like may differ greatly from investor to investor.

For some, a budget may be very detail-oriented with spending allocated down to the last dollar. For others, it might be a simple case of knowing what their expenses are, and how to split up the money they can spend.

The most important part of budgeting is, well…following the budget!

Establishing good financial habits and showing banks and lenders that you a) can stick to a budget, and b) know how to make the most of every cent you invest is paramount to being a successful property investor.

Two: Create an investment strategy

As part of your budgeting, you’ll need to have a plan for the extra money you end up saving.

A good first step is speaking with a financial planner to find out where you’re at right now and what your financial goals are.

You can then work on creating a property investment strategy to help reach those goals – this is where having a real estate coach or mentor will be crucial.

Whatever you do, don’t go into property investing without a plan. Nine out of ten times, you’ll make poor decisions and end up losing money.

Three: Eliminate bad debt

Bad debt is tied to assets that aren’t typically income-producing like flashy cars or jet skis.

Not only are these depreciating assets, you usually acquire them through things like credit cards, car loans and other personal loans – all of which put a strain on your finances.

Wiping out bad debt is key to increasing your cash flow and moving into what we call GOOD debt. Good debt is actually your secret weapon in property investing because it provides an income for you e.g. an investment property.

To claim good debt on an investment property you need three things:

1. The property to appreciate
2. Tax deductions or incentives
3. A passive income in the future

You can dive into this topic more here: Why Debt Is Your Ultimate Secret Weapon To Property Investing Success.

Four: Become tax savvy

You’d be surprised how many property investors pay more tax than they should because they haven’t taken the time to put in place a smart tax plan.

Investing in positive cash flow properties is actually tied to how investors approach their tax (more on this soon). The idea is to claim all your tax benefits AND depreciation so that come tax time you’re actually getting money back into your pocket.

The best way to ensure you’re doing this correctly is to work with an accountant who has experience with investment properties and knows all the deductions you can claim and how.

 

WHAT IS A POSITIVE CASH FLOW INVESTMENT PROPERTY?

By now we know that a positive cash flow property is pretty much able to pay for itself without you having to chip in more to cover expenses.

However, the caveat is that this only applies AFTER tax. See there is a difference between a positively geared property and a positive cash flow property.

A positively geared property gives you, the investor, extra income each week as the rent is paid (before tax), while a positive cash flow property might generate a loss but then after tax returns are lodged you end up with more money in your pocket.

As explained by On Property, properties with high depreciation options (such as new properties and newly renovated properties) have the greatest potential to be in positive cash flow. This is because their on-paper loss allows you to claim more of your tax refund.

However, older cheaper properties can offer a strong rental return and therefore are more likely to be positively geared. So it kind of works out for you both ways depending on when you need that additional cash flow.

 

AN EXAMPLE OF A POSITIVE CASH FLOW PROPERTY

Let’s use this example from TRC-Gorod CEO Jason Whitton on how positive cash flow and tax works.

Say you’re earning $100k a year and you know you can purchase another property with the equity you’ve built up in your home, but you don’t have enough leftover in your regular pay packet to actually pay off that property long term.

You’re wondering, how do people do this for multiple properties? Is investing only for the uber wealthy?

Nope! The truth is you just need to learn how to do better with what you have.

Where your money goes

Do you know exactly where your money is going right now?

Of your $100,000 income (on average):

• $9,500 goes to your super
• $25,000 goes to tax
• $35,000 goes to your home (based on what the average Australian homeowner or renter spends on their home)
• $30,500 is what you have left to live off – covering your expenses like groceries, school fees, holidays etc.

Sure, when we break it down that way the prospect of property investing does feel completely out of reach – but that’s where the taxman comes in.

The scenario

You want to buy a brand new investment property for $500,000. You also want to make sure it’s returning rent for around $500 per week – or a five percent yield.

The challenge most investors will face is changing interest rates and expenses. For instance, if there was also an interest rate on the property of five percent it’s now actually costing us $601 per week to own. So, the rent of $500 coming in weekly still has us at a loss of $101 per week.

Here comes the incredible benefit for you as a property investor – you’re able to claim tax back and you get depreciation.

So now on a brand new $500,000 property you can claim tax back of $152 every week – without waiting until the end of the financial year to reap the rewards. With a PAYG withholding variation, you can receive the $152 tax break each time you’re paid.

Where does this leave you? While your output still stays at $601, your combined rent and tax coming in weekly of $652 means you’re now receiving an extra $51 in your pocket each week.

 

HOW TO FIND POSITIVE CASH FLOW PROPERTIES

Investing in positive cash flow properties is not always easy, in fact they can be hard to find and may not make the most sense for your wider investment strategy.

Historically, these properties are located in more regional or rural areas, where there is high rental yield but lower capital growth. The issue is that these also tend to be high risk areas like mining towns or university areas that rely on one type of economy or tenant.

However, that’s not to say it’s impossible to find positive cash flow properties in major population areas – you just need to be able to spot locations that are poised for growth.

There are also properties that provide multiple incomes that can become positively geared or positively cash flowed if you manage to choose them well.

 

BUYING MULTIPLE INCOME STREAMS

Buying dual income properties can really be the golden ticket for an investor. Here are some of our favourites:

Duplex

A duplex consists of two adjoining properties that often sit under the same title. Think of it like a block of land that has been subdivided into two townhouses or two flats.

As an investor you’re able to receive income from both residences, which if you’ve chosen the location well, could have projected returns of six to seven percent.

Granny flat

A granny flat is a self-contained, secondary dwelling that is usually the size of a studio apartment built behind your existing property.

These properties are a super fast way for investors or even just homeowners to build equity in real estate.

Shop-top housing

A shop-top property is where a residential dwelling occupies the same lot as a retail space. Generally, you’d see it as an apartment above or behind a shop.

Shop-top housing is one way investors can opt to diversify their portfolio across the residential and commercial property markets.

Room-by-room rentals

Room by room rentals require a lot more research to keep up with compliance but are a great win for investors if you can make it work.

Essentially, you’ll flip rooms on one bigger property into smaller, self-contained living quarters with kitchenettes and bathrooms. These are popular for renting amongst university students.

You could also approach a government agency to rent the rooms as a group, which could make life easier in the long-run as your contract would be with the one provider of tenants rather than multiple individuals.

 

THE NEXT STEPS OF INVESTING IN POSITIVE CASH FLOW PROPERTY

While this is just a guide to investing in positive cash flow property, the real education comes from connecting with a property mentor or coach.

At TRC-Gorod we have the know-how and the proven experience at finding cash flow positive investment properties around Australia.

We also have the best tips on avoiding negative cash flow properties which we share through our free real estate investing seminars along with our advice on the best markets to invest in, how to get started in investing, and how to invest with minimal risk.

Register now to join the next seminar near you.

Here’s a question for you – when you signed your bank loan agreement to secure funds for a mortgage, did your contract contain an all monies mortgage clause?

Regardless of whether or not the answer is yes or no, all property investors must understand the all monies mortgage meaning, and how they can avoid the risks associated with it.

In most typical cases, getting a mortgage with a bank for personal or investment purposes is fairly straight-forward.

You simply go through a lender or mortgage broker who does all the checks and measures to determine if you qualify for the loan and then BOOM, you sign on the dotted line and suddenly you’re a homeowner – congratulations!

Accept, what did you actually sign? Are you 100 per cent across all of the terms and conditions of the agreement?

For example, did you know that the money in your bank account used for direct debits, or all of the money sitting in your offset or redraw accounts – AND even the funds due to you at settlement or any payments made in advance, can actually be kept by the bank.

Yes, that’s right….the bank can potentially keep it under the all monies mortgage clause.

WHAT IS AN ALL MONIES MORTGAGE CLAUSE?

An all monies mortgage clause in Australia lets your lender use your home as security against any other debts you may have with that lender.

An all monies clause example is that you have a mortgage with a lender. You then apply for a credit card with that same lender. If you happen to default on that credit card, your home could technically be at risk because that mortgage extends over to all debts you have with the bank.

It’s quite common when you start out as a property investor to use the same bank you used for your Primary Place of Residence (PPR), for your property investment loans.

You know them, they know you – they have your savings, you use their credit cards, it’s all one log-in and easy to transfer money between accounts.

Sounds OK right? WRONG.

If you set up your lending like this you may encounter the all monies mortgage clause.

THE RISK OF CROSS-SECURITISATION

What this means is that all your money with the bank can be used to cover any shortfalls on any lending valuation you have with the bank.

So how do they do this? They do it by what is commonly known as cross-securitisation or cross-collateralisation.

What does this mean for you?

It means the bank will use equity in the higher valued property, often your own home, as the security to buy your next property. Sounds good doesn’t it as you don’t have to come up with as much money for a deposit.

Cross-collateralisation could seem attractive for many Aussie homeowners, with recent property values having soared over the last couple of years. That means there’s an abundance of equity sitting in the market place and putting it to good use by buying an investment property is a smart choice for future financial freedom. But tying everything up with one bank is what could lead to later pitfalls.

Here’s what you need to know…

By using this strategy, eventually, you get to a point where the bank will stop lending you money.

In extreme cases, when you sell one of your properties, the all monies clause lets your bank take proceeds of that sale and apply it to your other loans. They do this to decrease their liability so the bank has less financial risk by decreasing their exposure.

HOW THE ALL MONIES MORTGAGE CLAUSE COULD IMPACT YOU

Don’t think this could impact you? The truth is, it could. According to ASIC (the Australian Securities and Investment Commission) between 2012 and 2017 almost 550,000 credit card accounts were in arrears.

An article by the Australian Broker further confirmed that an “additional 930,000 were considered persistent debt and 435,000 account holders were only making ‘small’ repayments”.

The reality is that many Aussie’s carry high levels of debt, and the bank can pounce any time that they want to claim it back if you’ve signed an agreement with an all monies mortgage clause.

If the Covid-19 pandemic taught us anything, it’s that people’s financial position can change very quickly. Almost overnight, many regions around Australia were put into a snap lock down which put hundreds of thousands of people in a predicament where they could not work.

Sadly, because of this, jobs were lost. The hardest part was that so many Australians were caught out financially as they did not have the buffers or savings in place to go the distance required to remain secure throughout this period.

AUSTRALIA’S DEBT CRISIS

Lack of safety buffers combined with the high levels of personal debt that the country carries is putting people at risk.

In fact, according to Finder.com.au, when it comes to global comparisons of household debt, Australians rank fourth highest in the world next to Denmark, the Netherlands and Norway.

Furthermore, the website says that as of 2016, Australia’s total personal debt was around $2 trillion and the average Australian household owed $250,000. This debt can be broken down into the following categories of mortgage and investor debt, personal debt, student debt and credit card debt.

Now of course, there is a big difference between good and bad debt which you can learn all about here. However, the moral of the story is that if something unexpected happens (and in life it does), and you can not service the current debt you hold – under the all monies mortgage clause, you’re left fully exposed and potentially compromised.

HOW TO AVOID FINANCIAL LOSS

Real estate investing can be your biggest asset but also expensive, time-consuming and stressful when you get it wrong. This is why success starts with a strong team who can fully back you to make substantial gains.

These people are specialists who can explain the key areas of risk and how to safely mitigate it in order to build and manage your portfolio.

Areas such as the all monies mortgage clause are just some of the issues people trip up on without properly understanding key aspects of the property process, including areas such contractual agreements that can have a huge impact down the line without people realising.

To avoid these kinds of mistakes, at TRC-Gorod we always advise you have the following people on your team:

– A property strategist expert (the captain of your team – a coach, mentor, investor and advisor who understands your big picture strategy)

– A finance expert

– An acquisitions expert

– A property management expert

– An accounting expert

– A financial planning expert

Whether it’s an all monies mortgage bank clause, or a different area of real estate – you want to know that there are experienced people out there who have your back and can support you throughout the process.

WHAT THE ALL MONIES MORTGAGE CLAUSE CAN TEACH PROPERTY INVESTORS

The lesson?

Know how to be safe with your money. Know when, what and how to cross securitise your portfolio safely OR better still, don’t do it at all.

The way you structure your finances and seek professional help can put you in a position where you’re not vulnerable or at the mercy of the banks. The all monies mortgage clause is just one of many things to watch out for when applying for a loan.

The most important thing you can do today to protect the future of your property investments (or potential ones) is to get educated.

Join our free property investment seminar where you’ll learn the foundations of real estate investing and understand how it can contribute massively to your financial freedom.

Spaces are limited in each session so secure your spot now.

Register now for the free property investor webinar here.

I’m sure you’ve heard – data is the new currency. It’s the next big thing for business and it will be a catalyst for driving the world forward over the next few years. Learning how to harness the power of data in property investing, will be a secret weapon all investors can use to create more wealth. 

So, what is data? It’s information, insights and predictions that property investors can use to help them make smart property purchases. 

This could be data around what’s happening in regions in terms of infrastructure and growth. Figures on what type of property is selling well in a particular location. Information on industry or employment opportunities in a city or regional town. 

All of this kind of data can give property investors an edge into what, where and when to purchase in order to create wealth.

However, when it comes to data and information, property investors face some challenges. Identifying what these can be will help protect you from making decisions based on fiction and distinguish what is fact. 

CHALLENGE #1: DATA ISN’T GOOD OR BAD – IT’S JUST INFORMATION

Letting go of the idea that data has to fall into a good or bad category is a big learning curve for those new to real estate investment.

Remember data is just information coming from different sources. Take it in, and use it as part of a whole knowledge bank you have stored in your mind that will help you gain a greater understanding of the market and investment process as a whole.

In short, don’t give it too much meaning. A report on rises or falls in the market is just one piece of the data puzzle, not the whole picture.

CHALLENGE #2: NOT ALL SOURCES ARE EQUAL

While we’ve been socialised to respect institutions like banks, insurance companies and even some forms of media, most of the sources of data and information aren’t objective.

In simple terms, everyone has an agenda to suit their own purposes and success strategy. While your agenda as a property investor is to eventually pay your loans down and create positive cash flow from your properties, the bank’s agenda is the opposite. Why would they benefit from you paying off your loan?

And even the most well-respected business or finance media has to attract readers, and nothing does that better than a scary headline.

Sources will put data into the market to support their own agendas, another good reason to resist attaching too much meaning to any one piece of information.

CHALLENGE #3: MOST DATA SOURCES HAVE LITTLE RISK

If a financial planner told their clients that property prices were going to plummet by 50 per cent and the smart thing to do was to sell all of their properties, and they were wrong, their clients could sue them. 

If the banks, lenders or media say the same thing, they have no tangible responsibility to how people react to that information. So, while the information may have been put in the public arena with the best intentions, if it’s wrong, there’s no fallout for the source. 

The challenge here is to once again take all data as small insights into what is a very big business with a lot of moving parts. Don’t be scared into an over-reaction, or worse yet a paralysis of any decision making, by one piece of data. 

Smart property investors seek information from property experts with years of experience and education who, incidentally, have the same agenda as them – to use property as a way to create wealth. 

MAKE DATA DRIVEN DECISIONS CORRECTLY

The key here is to make data driven decisions correctly. When you can read verified information accurately, it has the potential to help you tremendously. 

It can inform much if your investing strategy and lead you to the best properties to buy, in right locations and for the right place. It can guide you in making key decisions such as which property manager to go with, what rent to charge and even which banks to work with.  

To learn more about how you can better utilise data when investing in real estate, join us for our free property investing seminar. 

Limited spots are available so book here now. 

Tick, tick, BOOM! How to prepare for the lending explosion 

Ready…set INVEST! 

After a lot of bad news over the past 12 months – thanks a lot COVID-19 – it’s nice to be able to kick off 2021 with some good news. There’s going to be a lending boom which, if you have your property investment strategy in place, is going to make your life a whole lot easier so you can build your property portfolio faster and cheaper.

 

WHY IS LENDING SO IMPORTANT TO PROPERTY INVESTORS?

Most property investors need to borrow money to be able to invest. High-interest rates can make borrowing cash an expensive thing to do. 

But with interest-rates at a record low, and predictions keeping them there for the next few years, suddenly investing in property is more accessible to more people.

 

WHY IS PROPERTY THE RIGHT HOME FOR MY CASH?

Once upon a time, high deposit rates meant our grandparents could bank their savings and watch the dollar amount go up and up. Those fairy tales died out years ago. Deposit rates are woeful now and having your cash sitting in a bank is pretty worthless.

The property market is a better place for your cash because, when done right, it can generate an income. The more properties, the more income, the better off you are.

 

BORROW AND BUY – BUT BUY THE RIGHT PROPERTY!

Combined with the lending boom we’re currently in, we also have a supply issue in real estate. Partly due to foreign investment being cut, and repercussions of COVID-19, there is a lack of new builds available. 

The danger in this is that with cash being cheap to borrow and lending being a new opportunity for many, people are subject to panic. They don’t want to miss out on the lending boom, so they buy an over-priced property that doesn’t have the liveability factor, the walk score, or the Third Space it needs to be an income generating investment. 

In short, don’t just buy anything. The rules of property investment still apply. Buy property close to burgeoning infrastructure, good job opportunities and industry. Buy a property in an area with desirable liveability factors, such as green space and social areas. Buy a style of property that is in demand in the area and buy good quality property that’s been constructed by a developer and builder with good credentials.

 

GET READY AND GO FOR IT

While we expect to see low interest-rates for some years, the property market is an ever-changing, fluid thing, and things can shift quickly. Don’t just watch this space, get yourself ready to act. Seek out property investing experts, start researching what areas are booming, get your numbers in line and be ready to buy good property and hold it for a long time. This is the time to act and not look back in three to five years and wish you’d bought into the market when you could afford to borrow the cash to do it. 

 

HOW TO ESTABLISH A CLEAR STRATEGY

Talk to the experts at TRC-Gorod, who together have decades of experience, about how to borrow and buy in the current market. 

Sign up for one of our information and education events, where you’ll be equipped with the tools, resources and support to thrive, and not fall behind on your path to financial freedom – whatever that may look like for you. 

Book your spot now and find out what you need to know about the current market landscape and how you can make it work for the ultimate wealth creation opportunities. 

 

Secure your seat here

Like a fine wine, the value of property gets better over time. Traditionally, the more time you have an investment property, the higher the value will rise.

However, unlike your favourite Shiraz, property values can go up and down, and up again. 

Getting to know how, why and who is valuing your property can help us understand what property to invest in. 

There are three ways to value a property – and three very different people doing the valuing.

THE VALUE HISTORIAN

The value historian is assessing the value of your property based on the past, what has come before. They look back at what was going on in the market three to six months ago and make a valuation based on what the property is worth if it was sold today, or in the next 30 days. What would it make based on the past?

Value historians work for the banks, the lenders. Their primary role is to protect the lender’s money. They have no real interest in what the property is worth in the future, or what the market projections are. 

This is important to remember if a valuation comes in low, but you still like the property. Remember, as a smart investor, you’re looking at the long game, not what happened six months ago.

THE PRESENT VALUER

Other than the owner, the next person who is most motivated to sell a property is the person who values it in the present, what it can or could sell for right now. And that’s the agent.

Real estate agents, quite fairly, are motivated by money. The more they sell a property for, the higher the value, the more commission they get. That’s their job.

Agents are in a prime position to value a property based on what is happening in the market right now. They are getting phone calls every day from people wanting to buy and sell, so they can get a real sense of what kind of property is in demand and what might sell for more than the lender thinks the property is worth, based on market demand. 

This is where agents can be helpful when looking at the value of a property. While the bank or lenders say the property is only valued at $500,000, talk to an agent with their finger on the pulse and they could estimate they’d get $550,000 based on their insider knowledge of the market activity.

THE FUTURE VALUE

This is the important valuer – because it’s you! The investor. The one who’s in it for the long game and has a plan and strategy and an end goal, whether that’s a shorter working week, or a new car every year. 

Smart property investors do their numbers before they buy and know what they need a property to make in rent return and capital growth so that they can achieve their goals.

When it comes to valuing your property, you have to decide what the future value will be and what needs to happen to achieve that increase. For example, does the property need to be developed to reach its value potential, and if so, are you willing and able to do that? Make sure the property is going to work for you and your investment strategy.

UNDERSTANDING THE RULES OF SMART INVESTING

Let the experts at TRC-Gorod teach you how to value a property at one of our free property investing seminars. Plus learn all of the ins and outs of smart property investing. 

Sign up for one of our information and education events, where you’ll be equipped with the tools, resources and support to thrive, and not fall behind on your path to financial freedom – whatever that may look like for you. 

Book your spot now and find out what you need to know about the current market landscape and how you can make it work for the ultimate wealth creation opportunities. 

 

Book here

What are your Big Rocks this year? What are your Big Rocks for your property investing journey?

If you’re scratching your head and wondering if you’ve accidentally stumbled across a blog for construction workers, bear with me.

Big Rocks is a concept often used in business or life coaching to essentially describe your priorities. The theory is, if you don’t have clear priorities, or if you have too many, chances are you’ll let smaller issues distract you and ultimately fail in your goals. 

By assigning Big Rocks, or priorities, you’re focusing your energy on specific outcomes. Make sense?

It works for property investment too. There are some Big Rocks that you need to have, cultivate and nurture to reach the desired outcome of passive income and the life you desire. Lose sight of one of those Big Rocks and the outcome is jeopardised.

So, what are the Big Rocks of property investment success?

INCOME

Being a successful property investor is at least 50 per cent reliant on your income. Without an income, you can’t borrow money, or at least have limited borrowing ability. The higher, and more stable, your income, the more you will be able to borrow. What then follows is lower interest rates, and a high loan to value ratio. The better your income the more choice of lenders you have, so more competitive rates and terms become available. Taking time to do some extra training to ensure a promotion or pay rise, shopping around your industry to make sure you’re earning as much as your counterparts, or negotiating a contract over a casual or freelance arrangement, can all help increase and stabilise your income from a lender’s perspective. Look after your income, and it will look after you and your investment plan.  

TIME

Get this into your DNA – you have to give property investment time. And we’re not talking about weeks or months or even a few years. We mean 10, 15 or 20 years of time to let your properties do their thing in terms of capital growth and rent rate increases. Property investing success is born out of a buy and hold strategy and it takes TIME! If you’re buying properties, doing quick renovations and flipping them, that’s a different ball game. If your aim is to have a booming portfolio that generates enough cash flow to supplement or replace your current income, then you have to invest the time it takes to build up that kind of business. 

SELF-BELIEF

As soon as you start to tell people you’re going to invest in property you’ll notice that pretty much everyone you know has an opinion on it. While many of these people will be family and friends, most of whom will be well-meaning with your best interests at heart, the fact is that 99.9 per cent of their advice will be based on absolutely nothing. 

Unless they are successful property investors themselves, their chatter will be based on nothing more than their own opinion, and much of it will be negative. ‘It’s too risky, the market is too unstable, I knew a guy who lost his life savings….’ – you get the gist. Smile, nod and say thanks very much, but ensure you’re getting your information on the market, lenders, interest rates and everything else investor-related from people who have the knowledge and expertise. That way you will go into each investment with the self-belief that you’re making the right decisions and believe in your own strategy and plan. 

Self-doubt will stop you from seeing opportunities when they arise. Get educated and informed so that you can keep your self-belief where it needs to be.

SET YOUR BIG ROCKS STRAIGHT

Learn more about the Big Rocks of property investment at one of our free property investing seminars.

Sign up now and discover how to establish and rollout your Big Rocks with experts who have a proven track record of success in real estate. 

Limited spots are available so secure your spot now. 

 

Book here

Historically real estate has always been a good place to put your cash. It’s an asset you can feel and touch – unlike stocks or shares – which makes investors feel safe. And, in the right place and time, property can grow in value while you sleep, meaning as an investor you don’t have to do much to increase your personal wealth.

But as investors, how can we better predict the next hot spots for real estate investment so we can get in at the right price? How do we know the best places to buy that are guaranteed to grow in capital value, return regular rent increases and ensure future personal wealth?

 

BE AN ACTIVE, ENGAGED INVESTOR

ANZ bank recently adjusted its “pessimistic” forecast of a 10 per cent drop in capital house prices, to a more positive outlook, predicting a rise of 12 per cent in Perth, 9.5 in Brisbane and 9.4 for Hobart. 

That’s all good news. The only caveat is that smart investors got into the Brisbane and Hobart markets years ago when prices were low and started to rise. 

Property investors who are able to better predict how a market is going to rise or fall are paying close attention. They’re on the ground watching what properties are selling for, keeping track of reserves vs sale price and going to auctions. 

In simple terms, they know the market because they’re investing some time and energy looking at it. And if they’re new to investing and they’re smart enough to know what they don’t know, they’re asking experts, like the team at TRC-Gorod, to help them on their journey.

 

SEE THE POTENTIAL OPPORTUNITIES

Events such as COVID-19 understandably rattle our cages and scare people off spending or investing. People like stability. But the truth is, COVID-19 or not, real estate markets are ever-changing and property values go up, and down, then back up again, all the time. That’s the reality of property and why we say it’s a long game, not a quick fix.

Being able to see past the scary headlines and see future opportunity, where others just see risk, is a great skill to have as an investor.

Currently, Melbourne property prices might be feeling the pinch. The Australian Bureau of Statistics reported a mass exodus of Melburnians in the three months to the end of June 2020, with people fleeing the city and prolonged COVID-19 lockdown periods, for regional areas with fewer restrictions. Property prices in the metro area dropped, as did rents, and vacancy rates for rental properties increased.

With all that doom and gloom you could be forgiven for avoiding Melbourne like the plague.

But all projections show that the city will bounce back and long-term effects will be slim to none. Add into that the fact that the Victorian government has recently announced billions of dollars of investment into infrastructure, which will grow the state’s economy, create jobs and drive-up property prices. Suddenly investing in Melbourne looks like the smart thing to do.

 

REMEMBER THE GOLDEN RULES

It can be hard to make absolute predictions about where to buy property, but there are some golden rules that never fail us.

1. Stay close to the action – You don’t want to buy a property that’s more than a 30-minute drive from the CBD or a place economy. Proximity to infrastructure, jobs, opportunity and desirable lifestyle is always going to drive property prices in the right direction.
2. Do your numbers – Make sure you have enough money to make the purchase you want and stick to your own budget. Ensure you have a personal buffer should your own circumstances change, and a buffer for each investment property you own.
3. Location trumps property type – Say you have $400,000 and that will get you a one-bedroom apartment in a place that attracts money, wealth and a highly liveable lifestyle. Or it will buy you a four-bedroom house out in the bush, hours away from a decent coffee. Location trumps property if you want low vacancy rates, high rent and steady capital growth over time. 

 

HOW TO PREDICT WISELY

Need help in predicting where to invest in property?

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According to the Australian Bureau of Statistics, 99 per cent of property investors in Australia fail. In this instance, the definition of failure is failing to buy three or more properties. 

So, 99 per cent of Aussies fail to build a portfolio from which they can get enough passive income to live the life they’re dreaming of. Just one per cent make it and become successful property investors.

TRC-Gorod wants to change that. We want you to succeed. We want you to become a successful property investor with a booming portfolio.

Failure is easy. It takes very little effort to be bad at something. Success is something you have to work for, something that takes time and effort. But if you’re willing to put in the hard yards, we know you can succeed. We know because we’ve helped thousands of Australians buy property that’s yielded millions of dollars of income.

To understand how to succeed, we need to know why so many fail.

People fail because …

 

THEY DON’T ASK THE RIGHT QUESTIONS

In the case of property, you need to ask, why am I buying this? What do I want? 

And if you think the answer to this question is as simple as wanting more money, that’s not good enough.

Drilling down to specifics is vital in property investment. Knowing exactly how much money you need (and we mean to the dollar!) to live the life you want – whether that be a shorter working week, giving up work entirely, or being able to have one more holiday a year – will enable you to get there that much quicker.

Decide what kind of life you want. Work out how much it costs. Then you will know how many properties you need, at what rent rates and capital growth, to get there. 

 

THEY DON’T GET EDUCATED

One of the most important aspects to making money from, and being successful at property investment is understanding tax and how to minimise it. 

If you’re buying (and potentially) selling property you’re liable to pay stamp duty, capital gains tax, land tax…

The list goes on and it can drain cash out of your pockets unless you know how to work the system in your favour and know what you can legally deduct, minimise and avoid altogether.

 

THEY DON’T HAVE AN INVESTMENT STRATEGY

Anyone with enough cash or credit can go out today and buy a property. But simply owning a property does not make a successful investor. 

Before you make any property purchase you need to have a clear investment strategy and that includes:

• Knowing your numbers and making sure you have enough of a budget to afford the initial outlay. 
• Having a buffer in place should anything unexpected change or happen to your own situation or your property. 
• Researching location to make sure it is growing in popularity and liveability factors. 
• Being realistic about the buy-and-hold element of investment – for example, have you accounted for the time it will take to allow your property to reach its full value potential?

All of these factors and more have to be planned for and considered if you want a strategy that’s going to work for you as an investor.

 

…THEY DON’T ASK THE EXPERTS FOR HELP

In Malcolm Gladwell’s 2008 book Outliers he says that it takes 10,000 hours of practice to become an expert at something. 

Whether you agree with that or not, we believe that you don’t have to be an expert in tax law, location scouting, budgets, capital growth prediction or the economy to be a successful property investor. 

But you do need to know who the experts are and ask them for help.

This is where our team of expert coaches and mentors can help you on your way to becoming one of the one per cent. The one per cent of Aussies who are successful property investors.

 

BECOME THE SUCCESS STORY YOU DESERVE TO BE 

If you want the tools, education and support you need to become a successful property investor come to one of our free property investing seminars.

You’ll be equipped with the tools, resources and support to thrive, and not fall behind on your path to financial freedom – whatever that may look like for you. 

Book your spot now and find out what you need to know about the current market landscape and how you can make it work for the ultimate wealth creation opportunities. 

 

Book here 

Part of being a successful property investor is being able to stay across a lot of moving parts. From analysing the value of different areas or types of property, to understanding inflation and different kinds of loan structures. It’s information overload and at times can feel overwhelming. 

Information overload can lead to something we call “analysis paralysis” meaning, with so many decisions to make, you can’t make any. You get stuck, you freeze up and you let opportunities slip away.

Knowing this is normal and everyone feels overwhelmed at times can help, but there are also some practical questions you can ask yourself to stop things getting on top of you.

Am I Happy to Own This Property Forever?

Whether you strike gold with a property that starts generating cash flow and capital growth from day one, or you’re in it for 10-15 years before you start to see some really great cash benefits, is immaterial.

The fact is you don’t know for sure what your property is going to do, so before you buy it you need to ask, am I happy to own this property forever, or as long as it takes? If the answer is no, don’t buy it.

Property investment is a marathon, not a sprint, and if you aren’t in it for the long game, you won’t reap the kinds of rewards you need to generate some passive income and live the life you’re dreaming of.

Does This Property Diversify My Portfolio?

When some property investors start out, many decide to buy in the same location where they live and work. It can feel safer to be able to see the properties you’re buying, in an area you already know.

But a truly booming portfolio is a diverse one. Buying in different areas and economies, having a mix of apartments and houses, and buying in different states, all allow you to benefit in different ways, from different kinds of cash flows and tax breaks. Going with what feels safest, isn’t always smartest.

Will This Property Create Cash Flow?

Your one true aim as a property investor is to own properties that give you passive income, i.e., cash flowing in that you don’t have to work for and that can, in part or entirely, replace your current job.

Properties that do that may not be the ones that increase in capital growth the most, but rather are the properties you can rent out at good rates, and be able to regularly increase those rent rates as the years go on. These are the properties in areas that people want to live and that tenants earn good incomes.

Other properties that can create good cash flow include ones that can be subdivided, so one title but two dwellings, giving you twice the rental income. Look at how your property is going to create cash flow before you buy.

Will This Property Give Me Back My Deposit Amount Quickly?

If you’re looking to create a property portfolio, one of the key strategies is to make back the deposit amount you have put into one property as fast as possible.

As soon as you can pull that equity out of the property to use as the deposit on the next investment property, the faster your portfolio can start to grow and flourish.

Before you make a purchase make sure to do the numbers and have a plan so you know exactly when you can start to move forwards and build your future wealth.

Avoid Overwhelm with Strong Plan

Let the experts at TRC-Gorod help you establish a strong investment strategy so you can avoid information overload and be undeterred in your pursuit of financial freedom.
 

Join our free property investing seminar. 

Sign up for one of our information and education events, where you’ll be equipped with the tools, resources and support to thrive, and not fall behind on your path to generating wealth and creating long-lasting security. 

Book your spot now and find out what you need to know about the current market landscape and how you can make it work for the ultimate wealth creation opportunities. 

 

Sign up here

When investing in real estate, smart investors know that buying well comes down to more than just the quality of a building or property.

This is because one of the key factors to affect the capital growth and rent rate potential of property is infrastructure. Therefore, it is crucial to look at what is going on within the location that you’re planning to buy in. 

Infrastructure includes things like transport, schools, roads and hospitals. All of these factors create jobs and income, which in turn puts money in a property investor’s pocket through good rent returns and steady capital growth.

Currently, in Australia, we’re seeing some huge economic moves and changes that will drive infrastructure growth and benefit smart investors who know what to look for.

 

WHAT IS HAPPENING RIGHT NOW IN AUSTRALIA?

To understand how changes and developments in infrastructure benefits you as a property investor we need to pay attention to what’s happening right now.

In Victoria, the government has pledged $1 billion towards building the southern hemisphere’s largest flu vaccine manufacturing plant near Melbourne Airport, and the 20/21 budget has earmarked $2.2 billion to the Suburban Rail Loop, creating new tunnels and stops that will improve rail travel in the metro areas and beyond.  

NSW is investing in infrastructure too, committing $72.2 billion over the next three years to road and rail projects.

Currently, there is a huge amount of government stimulus and investment in infrastructure. While interest rates are at a record low for us as investors, state and federal governments are also taking advantage and borrowing cash to plough back into the economy.

 

WHY IS INFRASTRUCTURE IMPORTANT TO PROPERTY INVESTORS?

New or improved infrastructure creates jobs, quality housing, and areas of good liveability where people will pay higher rents to live. 

Introducing something like a new train or tram line, a Westfield shopping centre, or a new motorway can drive property prices up much faster than everyday capital growth predictions.

And it’s not just the end products that make a difference. The construction projects themselves create jobs. This in turn brings more people into an area and demand for housing goes up, meaning rent rates can also rise.

 

RECOGNISING OPPORTUNITY WHERE OTHERS DON’T

COVID-19 rattled us. It put our health, jobs and homes in jeopardy, and many people might be scared about making an investment decision at a time when so much is still unknown.

But the truth is that the Australian economy is investing in infrastructure growth, which will help to create jobs, higher incomes and greater wealth.

Buying a property within a 20km radius of new or improving infrastructure projects is a smart, educated investment choice. 

COVID-19 has exposed the quality of how people live, and how we want to live in the future. We want green spaces, high mobility, easy access to local areas and walkability to amenities. We want to be close to the action. 

Infrastructure developments and improvements can provide the quality of life people are demanding now and in the future.

 

BUY RIGHT, BUY NOW

With interest rates low and infrastructure projects high, there has never been a better time to buy – however, you still need a strong strategy to ensure you’ll reap the long term rewards of a successful property investor. 

Sign up for one of our free information and education events, where you’ll be equipped with the tools, resources and support to thrive, and not fall behind on your path to financial freedom – whatever that may look like for you. 

Book your spot now and find out what you need to know about the current market landscape and how you can make it work for the ultimate wealth creation opportunities.