May 2016 - Property Women

Monthly Archives: May 2016

cashflow, rent

Top ten tips to finding positive cashflow properties

Rachel Barnes and her partner accumulated a staggering 75 rentals within 64 months. This feat was made possible by locating and buying high yielding cashflow positive property. No prizes for guessing what the most common question people ask Rachel … how do you find positive cashflow property?

Here are Rachel’s top cashflow positive tips:

1. Know what you’re looking for!
The first thing you need to define is, what sort of return do you need to make a property positive cashflow.  This may depend on your income, your tax position, and your level of comfort with debt.

2. Debt funded Positive Cashflow options
If debt is something you’re comfortable with, and can manage well, you may consider using equity to fund the short-fall in high growth potential properties. Make sure you understand the pros and cons of this sort of strategy well though, before you choose this option.

3. Check Statistics  – eg Australian Property Investor Magazine
API often provide Statistics showing Average rental returns for most areas.  If you find the highest ‘average’ and then research properties in that general location or just outside of it, then you have at least a starting point to work from.

4. Trawl The Net
The ability to find properties all over the world and even in your own backyard with the resources available online is magnificent.  You have the ability to shop and research 24×7 which gives you fantastic opportunities.

Searching for specific property types, prices, locations, and styles of housing can provide very efficient use of your time.  Use alerts (as long as they are instant) to get new listings within your search criteria delivered to your inbox instantly. is ideal for this option.  When searching consider:

  • Look for lower value properties (often the best returns)
  • Blocks of Units
  • Motels / Hotels / Boarding Houses

5.  Use Google Earth
This is a fantastic free program which helps you survey an area using satellite technology.  It’s great for looking at properties which aren’t in your backyard.  You can get a fair idea of the layout of the area and look at the properties you’ve found on the Net.  The layout of the land might show you potential for increasing the cashflow of the property.

6. Talking to all Agents in the Area
Talking to all or at least a number of Real Estate Agents in an area can give you an overall picture of the area, help you understand the growth potentials relating to the local economy and what areas potentially to avoid.  However, sometimes the areas they tell you to avoid can still be good to invest in.

  • This can be done completely remotely by telephone and email. Many agents are tardy in responding to emails so an initial telephone call would be more effective usually with a follow up by email. If you leave a message, make sure you are ready for their call and know the information you’re seeking.
  • It is sometimes more rewarding to have face-to-face conversations which gives you the potential to establish good rapport.
  • When dealing face-to-face always have a business card with you to introduce yourself as a professional investor and leave it with them when you go in case something comes up that might suit you.  Having specific buying criteria on the card and even your picture can really help them keep you in mind for future property listings.

Having a script ready is always good so that you make the right first impression.  You need them to feel confident that you are a serious buyer and know what you want.   Be specific in what you’re looking for – this will help them understand what a ‘good investment’ is to you!

7. Talk to the Property Managers
If you’re looking to be a Landlord then these are definitely the people to speak to – they’re dealing with Landlords and Tenants daily. They understand where the tenant demand is, what they’re likely to pay for specific style and location of housing.

Important questions you can also find out is if they know any Landlords considering selling?  Are there any problem properties where an existing landlord might be motivated to sell and where the property manager would love to have a new Landlord improve the property to make tenancies easier and less hassle.  Perhaps you could be their solution!

8. Network with other Investors
Investors often find out about changing areas – where you might still get a relatively low entry level with a good rental return and have the potential for unusual capital growth.

9. Make ‘Ridiculous’ offers
If you find a property that has a higher than usual return or potential but still doesn’t fit your specific criteria – calculate what price you could pay to have it work for you and make an offer.  It may seem like a ‘ridiculous’ offer but what do you risk? Remember it’s the offer that could be rejected – not you!

If a property has been on the market for a while or a Vendor is particularly motivated to sell quickly you’ve got a much better opportunity to get the property at a good price – and therefore a better return. Investing is all about numbers – the more offers you make, statistically you’ll eventually be successful in having one of the accepted.

10. Look for ‘Unusual’ properties
Consider unusual properties where you can potentially get a better than average yield for example:

  • Old ‘Queenslanders’ or other properties that can be renovated and turned into 2 or more separate living areas
  • Consider Granny flats as a potential for double tenancies
  • Consider old Motels that might be able to be renovated to provide individual permanent rental accommodation
  • Be creative – check out the 13 ways to turn negatives properties into positive cash flow at the Property Women Workshop currently touring the country.


Record Keeping

Record Keeping a must for all property investors



Accurate record keeping for your rental properties is essential for any landlord.

Rule number one in record keeping is to keep all your paperwork and organise it so you can retrieve any documents easily when needed.  If you have any disputes due to a misunderstanding about a property’s condition or you are required by the taxation office to verify a claim, you will need to call upon your records to do the explaining for you.

Record keeping is also a means to ensure that you are able to pay your outgoings when they are due.  Managing your cash flow is crucial.

To keep things simple, the best method for property investors is to have two files for each property you own, an Annual file and a Permanent file.


An annual file should include documentation for the ongoing operation of a property. It should be based on the financial year, and kept for five years after you lodge your annual tax return. In Australia the financial year runs from 1 July to 30 June, whereas in New Zealand it is from 1 April to 31 March, but can be aligned with the Australian year.

Items to keep in your annual files include:

All invoices and receipts. Written receipts are essential, the Taxation Office might not accept a cheque butt as ample evidence of an expense. If you have costs for multiple properties on a single receipt, photocopy it and highlight the applicable item so you can include a copy with each property file.

You will also want to save your receipts and documentation for any expenses you incur for your rental properties.  This might include replacement items, repairs and maintenance, new fixtures, cleaning and maybe even furniture.  If you make phone calls to your rental manager or travel to inspect the property, you will also need to keep a record of these details.  Land tax, insurances, water and council rates notices will also need to be kept.

What can you claim?  Please check with your accountant regarding allowable rental property deductions.  The taxation offices in Australia and New Zealand have several of articles of reference regarding  Rental Properties.

Australian Taxation Office:

New Zealand Inland Revenue (Te Tari Taake)

Rental statements. Whether you keep copies of tenant rent receipts or a quarterly statement from an agency, evidence of your income from a property is essential. Electronic banking makes record keeping easy, through either direct debit or electronic funds transfer (EFT).  If you are using a computerised program to manage your rental properties, ensure you regularly back up your data and keep printed up hard copies as an extra safety measure.

Condition Report.  Before a new tenant occupies the property a detailed condition report should be completed and signed by the new tenant.  Always take photographs of your empty property before your new tenant moves in, and make notes of any damage on the condition report.  Dated photos or videos can also prove invaluable if you ever need to substantiate damage caused by a tenant.

Tenancy agreements. It’s also a good idea to keep copies of each tenancy agreement in the annual file.  Even If they’re not required for tax purposes, they’re still important records and should be kept for each tenant of each property.  This particularly applies to commercial properties.

Cash book. You can use manual accounting systems, spreadsheets or accounting software, but you need to keep a record of your income and outgoings in relation to each property.  This makes it simple to  hand over the required information to your accountant to complete your financial statements.  If you do not use a software program or computer to keep records for your property, you may want to consider giving it a try. You may also be able to deduct the cost of such software as a business expense.

Bank statements. Simple — just keep them all in one place. If some of your statements relate to more than one property you can either make a copy for each file and highlight the relevant items or keep just one copy in front of the rest of your annual property files.


The permanent file is to record the history of each particular property, from purchase to sale. It should be kept for five years after the tax return that records its sale has been lodged.

Documentation to keep in this file includes:

  •  Purchase contract
  •  Solicitor’s settlement letter on purchase
  •  Loan agreement, including any refinancing
  •  Depreciation schedule
  •  Renovation costs, details and totals
  •  Contract of sale
  •  Selling agent agreement
  •  Solicitor’s settlement letter on sale
  •  Loan finalisation documents

Tip:  When you have multiple properties and therefore multiple folders, consider printing up a photo with address details for each property.  If you insert this into the spine and front views of the folder, it makes it easy for identifying which folder belongs to which property.

Property Investment Analysis (PIA)

Property Investment Analysis (PIA) software helps you to analyse and forecast the capital growth, cash flows, and tax potential for an investment property. Some of the Key Features of the PIA software include:

  • Data Entry Checklists
  • Spreadsheets
  • Reports
  • Graphic Screens
  • Property Investment Calculators

If you would like more information or to purchase your own copy of the Property Investment Analysis (PIA) please click here this is a great recording keeping tool.


Tax Tips

Tax tips every investor should follow

With these tips tax you are sure to avoid some key mistakes

If you’re serious about investing in property, you need to be a tax smart. In fact, the Australian Taxation Office (ATO) has identified a number of common mistakes property investors make.

The first mistake is not keeping track of tax deductions such as interest, insurance, real estate agent management fees, and depreciation. Property owners need to keep proof of all their income-related expenses from the beginning.

“Keep documentation,” stresses Stella Poly, principal accountant based in Melbourne. “Write everything down. Keep tract of renovation costs. If you live in the property, then rent it out, and later return to the property, keep track of the dates. If you don’t write everything down you can miss out on deductions. Even small amounts add up over time.”

Stella’s other tax tips include:

Getting Market Valuations

Keep in mind, renting out your property, improving or repairing your property, subdividing your property, and/or operating a home office or business can all affect your taxes.

“When you change the nature of the property, for example you rent it out or renovate it, it’s important to get a market valuation of the property at that time,” Stella advices.

Using Discretionary Family Trust

A discretionary family trust can give investors flexibility in distributing profit or income from a property. Since the trust allows you to share the tax burden among family members and helps protect family assets, it can be useful if your family holds capital growth or income-generating assets.

As the name infers, the trustee has discretion in determining which beneficiary will benefit from the trust. This trust has clear advantages where there is a disparity in the income of the beneficiaries; it allows you to reduce your tax bill by distributing income to family members with lower taxable income. If you choose to use a discretionary family trust, seek financial advice from an experienced accountant.

Negatively-Geared Properties

A significant number of investment properties in Australia are negatively geared- a tax strategy where investors make a net loss on their property which can be claimed against their other income to lower the amount of tax they pay.

“Keep in mind, negative gearing gives you the option of claiming depreciation, but it increases chances of capital gains later when you decide to sell,” Stella cautions.

Depreciation Schedules

Some investors do not claim as much as they were entitled to because they didn’t have a depreciation schedule. The calculation of depreciable items is very specialized and should be carried out by a qualified professional. However, the cost of a depreciation schedule is not always warranted.

“If a property has had a major refurbishment or is of great value, say $400,000 or more, this is something you should consider,” says Stella. “But if the property is more than 25 years old, you lose the benefits of depreciation and the cost of getting a depreciation schedule may not be warranted.”

Tax considerations form a large part of any successful property investment strategy. For property owners and investors, working with professionals such as an accountant, financial planner, or conveyancer can help streamline your strategy and help you take full advantage of any eligible tax deductions.

Do you have any tax questions?

Jane Min Zhang from LJR Australia Pty Ltd, has put together a 15 page report titled “The top 10 Questions Property Investors ask their Accountants” valued at $49.95 if you’d like a copy go to our Property Professionals Network and click on Jane’s page to find out how you can get your free copy.

Trust, tax structures, risks and pitfalls

Trust or not to trust that is the Question

Should you Trust!

Choosing to own an investment property in the name of a trust is very popular due to a desire to distribute asset income, capital gains or offset losses in a tax effective manner and for asset protection reasons.

Property owners are often disappointed by the benefits actually achieved by use of trust structures for property ownership, and it may seem to the property investor that the trusts only real purpose is to cost them establishment fees and ongoing annual administration fees.

Trusts will work well in circumstances where losses from a negatively geared property can be offset against income and where there is a realistic need for an asset protection structure and where additional land tax payable due to the use of a trust does not cause hardship or make the investment unfeasible.

Those investors who cannot offset losses and incur additional land tax are often those disenchanted with the choice of trust structure for property ownership. So, trusts are not for everyone, every time.

Frustration about the use of trusts for property ownership, generally comes down to: –

(i) Insufficient consideration of the trust structure before the purchase is made. Whether a discretionary, hybrid or other trust is most beneficial will depend upon your circumstances in each instance and what you want to achieve and specifically whether the investment is for negative gearing or not. Investors buying multiple properties need to revisit the trust structure before each purchase, consider future land tax liability and consider if the use of the trust continues to serve their interests; or
(ii) Higher liability for land tax, due to state land tax thresholds being lower or nonexistent for trustee owners. With rapidly increasing land values and rising rates of land tax, this is becoming a more common problem; or
(iii) An inability to offset losses against trust income. Careful structuring is necessary to avoid this situation.

The decision as to the type of trust needs to be established before the contract is formed, as changing the buying entity after contract formation may lead to payment of double transfer duty by the buyer.

The decision as to the type of trust appropriate (if any) and the terms of the trust deed are critical to achieve positive benefits for the property investor and expert legal and accounting advice is recommended before the purchase is made.

This article was provided by Susan Sing



12 steps to creating an investor mindset

How important is mindset?

Mindset is one of the key things that stops a lot of budding investors from investing.

“It’s all in the mind” when it comes to property investing.

Data from the Australian Tax Office (ATO) shows that more than 1.2 million people own one investment property, but the number of investors who own five properties drops dramatically to less than 14,000. Have you ever wondered why some property investors never get past their first property investment while a small group of successful investors achieve financial independence?

Creating the right investor mindset is probably the most important factor for creating wealth and enjoying a prosperous career in property investing. If you want to be a successful investor, you need to think differently than the average Australian.

Here are 12 steps you can take to create an investor mindset:

  1. Learn from those with an an investor mindset that are pursuing financial independence and long-term security. Find mentors, educate yourself, attend seminars and workshops, and then take action! Property Women’s Diamond Membership is a perfect place to start. Having a great team of successful people around you who are there to help and support you is so much better than going it alone.
  2. Those with an investor mindset usually have a burning desire for success. Whether they are motivated by a 9 to 5 job they hate, need to support themselves after a failed marriage, or want to retire comfortably, successful investors with large property portfolios either had or created a desire to achieve greatness. Aim high and clearly visualize what success will look like. Take your dreams of becoming a successful investor seriously so they become reality.
  3. Don’t get hung up on making the first investment a perfect one. Some people research properties endlessly and soon become overwhelmed with all the decisions. Should they buy a single family home or a condo? A property that needs renovations or new construction?  Remember, you’re building experience by taking the first step and that’s just as important as the investment itself. What you really need to do is begin.
  4. Those with an investor mindset are willing to make short-term sacrifices for long-term results. In other words, they have the ability to prioritise investing over spending.
  5. Do not allow fear to hold you back. Removing emotion from investment decisions is critical if you’re going to act in a logical and purposeful way. Less successful investors focus on what could go wrong instead of opportunities.
  6. An investor’s mindset will allow you to think outside the box. For example, maybe investing in another state or even another country will help you achieve your goals by providing diversity in an investment portfolio.
  7. Many investors stop after one property purchase and sit on their laurels. However, those with an investor mindset can see all the compounding benefits of building a portfolio.
  8. Don’t allow the haters to get you down. Others may try to discourage or criticize your investment decisions. Even if they mean well, don’t allow these people to persuade you to give up on your dreams. Associate with other like-minded investors who will support you.
  9. Everyone makes mistakes and experiences setbacks from time to time. True failure is giving up. An investor mindset will allow you to look at every property investment – regardless of the outcome – as a learning experience and remain positive no matter what happens.
  10. Buy according to the numbers. Do the math on each potential investment and be prepared to walk away if the property doesn’t meet your criteria.
  11. Set aside time each week to focus on your property investing activities. View property investment as a business, not a hobby. Have exciting goals that keep you motivated. Periodically check your progress to make sure you’re on track to achieving those goals.
  12. Study the most successful property investors and you will find they view property investing as a way of life.

With these tips in mind, create your own investor mindset. There is no magic secret. The only thing between you and a successful property portfolio that gives you financial freedom is your frame of mind.

Experienced Investors

Welcome to Property Women. Congratulations for being an investor. You are already on the path to creating a future for yourself and your family through property investing. However, sometimes that path isn’t easy, or as much fun when you are on your own. Property Women would love to help you and be a part of your continuing journey.

The key ingredients used by successful Property Women are:

  • Getting the right education – learning from those who have done what you want to do
  • Mixing with other like-minded women
  • Continuing to keep motivated and inspired

How you can boost your knowledge and keep on track:

New Book! Property is a Girl’s Best Friend

  • A step by step guide to property investing by 11 authors who walk the talk
  • 7 strategies, including pros and cons, and what persoanlity traits suit each of them
  • Top tips and bonus charts and reports
  • Essential reading for serious investors

Click here to find out more


Property Women Events

Property Women hold events to boost your knowledge, answer your questions and give you access to other like-minded women.

Find out about our upcoming events here

Diamond Membership

Grow your knowledge and grow your portfolio with access to ongoing education, information and networking as a Property Woman Diamond Member.  Benefits include…

  • Audio CD’s delivered to your door monthly packed with information and inspiration
  • Have your personal property questions answered
  • Teleconferences with the opportunity to ask direct questions
  • Substantial Member discounts on Property Women events and products
  • Work thourgh the On-line Course
  • Network with likeminded women on the Inner Circle
  • Discounts from selected trades and suppliers in our Little Pink Book

Want more information about our Diamond Membership?  Click here

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