Category Archives for "KNOW HOW"

What’s Your Property Personality?

personalisty

The 6 property buying personalities – what sort of an investor are you?

The answer to this question will change over time. It often reflects your stage of life, skill and knowledge set and what is also happening in your day-to-day.

What sort of investor are you, today?

Which one of our 6 personality types are you. You might be a blend of two but whatever you are doing…starting and continuing is the simple formula to your long-term success.

As Woody Allen said ‘80% of success is just showing up’.

Starting out and cash-strapped

We all started somewhere. No one buys the waterfront, A-grade property in a blue ribbon pocket on the first round in the property market. The key to starting, is simply that, starting.

Don’t get caught up in the concept that you must buy locally or that you even need to sleep the night in the property. It is an investment, look at numbers, growth and who your tenant will be. Remove emotion from the picture as best as possible. Start small and build up your portfolio.

Time-poor and juggling everything

Working hard, parenting, looking after aging parents, studying part-time. At some point in our lives we find ourselves multi-tasking and eating toast for dinner at 9pm. It is just the way life goes. If you are currently in this pattern there are strategies you can implement to continue (or start) your journey. Explore the idea of a joint-venture partner who has the time and you can be a financial contributor, you could look at using a Buyers’ Agent in the area you want to buy in. People outsource their dogs to be walked, it makes sense to outsource big financial decisions to property professionals if time is your rarest commodity.

Graduate of Renovation School

Love to renovate, absorbed all the information you can about doing it smart and maximising bang for buck? Renovating is a true act of love, it is time consuming, filthy, exhausting and oh-so rewarding. Do your numbers, be smart, don’t do shabby work but also renovate to the market you are in and not your own penchant for marble and chandeliers. Be sure when buying that you seek out a property that allows you to add value to it and then some. We see a lot of ‘renovator delights’ sell for way more than they should because of the growing interest c/o shows like the Block. Be smart, prepared and outsource to a tradie what you can’t do well.

Portfolio well underway

You have 7 properties ticking away and reached a phase of being comfortable with that. Consider your long-term prospects, diversification of your portfolio and new ideas that could inject further life into your returns. Frequently revisit what is going on. Are you getting fair market rental? What interest rates are you paying, could you refinance, are you sitting on a sub-dividable block, is a granny flat possible or could you now explore a more risker property investment potential as you have the foundation behind you to support the outcome?

Risk-averse

You need to invest carefully so you can sleep at night. You don’t like the idea of maintenance, difficult tenants, get nervous by media hype but still desperately want to set yourself up for positive returns. Recognising your personality type is half the battle won. Don’t be talked into taking on debt or a property that makes you feel uneasy. Overtime you will grow in confidence and be less risk-averse but start out to reflect your style. This personality type is suited to easy set and forget properties. Explore newer builds in established areas with great employment prospects and local amenities.

Ready for a challenge and willing to take on risk

You fall into this category because you have done a few things with property and done well. You have followed your instinct and the market and now buoyed by that confidence. Fabulous!

The next step for you would be looking at small developments – 3 townhouses, a duplex, sub-divisions etc. You have time, experience, plus the funds behind you for any shortfalls and you know you have the tenacity and passion to succeed. This personality type is primed for success. Choose your teams wisely. Ensure you research builders, get to really know your town planner and a great local agent. Remember to have an exit strategy. If you can find a mentor in this space that will help with your first project – go get ‘em.

So which personality are you? What can you do today to take that next step toward your property portfolio tomorrow?

Share us with your experiences – we love to hear them and other women are inspired by them. Email us at info@localhost/propertywomen

What are your Money Blocks?

wake-up-clock

Could you subconsciously be resisting property or professional success and not recognise it?

When I became the Director here at Property Women I promised that I would share with you my journey in life and property success.

I am a big sharer – probably an over-sharer really!

I have habits that hinder my own success. My success at getting fit (and staying fit), my ability to get a DA to council for my personal projects, my self-limiting mindset in the kitchen (I truly believe I am a rubbish cook) and money blockages that stop me from pushing myself to the next level.

Some women even feel like they are “cheating” if money comes too easily. You might not even be aware that you’re sabotaging yourself, but something is holding you back from the next level.

Have you ever tried to make more money, create passive income, start your property portfolio or rise above the rut you feel you exist in?

It’s your MINDSET.

It’s a huge goal for most of us, to generate that extra income. If you are a member of the Property Women community then I already know you are motivated for success, but here’s the thing that NOBODY talks about.

Sabotage and resistance.

 

What if the agents are lying? What if the tradies are hard to manage? Will people think I’m a big-noting myself?

You’re mindset can trigger blocks and sabotages. And if you’ve been resisting creating more income or buying the next property or propelling yourself professionally then I have something for you.

My friend and fellow business lady, Denise Duffield-Thomas has an amazing money mindset course that’s crucial for training women to overcome their money mind-set obstacles. It’s her Lucky Bitch Money Bootcamp.

Check it out here: https://yu103.isrefer.com/go/lbb/PropertyWomen/

The Money Bootcamp is a six-week course and vibrant community of over 3,000 women that identifies and helps you release your money blocks. Denise’s popular course has been helping women since 2012 to upgrade their mindset.

The cool news is that Denise is running a LIVE version of the course for the first time in THREE years. That means live group Q&A calls, quizzes, checklists and the momentum of 3,000 women working together.

If you are looking to get out of the PAYG race, build your own business, start your property empire or generally need an all-round kick up the proverbial backside I encourage you to check out the course here: https://yu103.isrefer.com/go/lbb/PropertyWomen/

There are crucial mindset shifts that need to happen so you can receive the abundance you deserve.

If you’ve been stuck, then it’s time to work on your money blocks. It’s the missing piece of your success as a property mogul!

Together, as women, we can support each other through these money and mindset blocks and the ripple effect starts with you.

As a bonus – if you sign-up to Denise’s program you will receive full access for 12 months to the Property Women Springboard program valued at $597.

I really highly recommend Denise’s course as one of the best money mindset resources out there. This course has helped women generate millions of dollars and Denise is authentic, smart, financially savvy and just has her head switched on and we love that!

You can also save $500 if you sign up by 27th October.

Check it out here: https://yu103.isrefer.com/go/lbb/PropertyWomen/

Let’s finish out the year on a high!

Jo

P.S Denise is known for having a super honest and funny take on life and business and what it REALLY takes to create success. It’s never been a better time to join her Bootcamp.

P.P.S Property Women is a proud affiliate of Denise’s work. We believe her message to be true, authentic and beneficial and would love for you to benefit from it.

Pets and Your Rental Property....

Pets and Your Rental Property….

Pets and Your Rental Property....

Australians love their animals, and many renters would love the opportunity to keep pets but the reality is that not a lot of landlords allow pets in their properties.

There are some significant benefits to renting your property out to pet owners which include:

  1. A Pet-Friendly rental property may help broaden your pool of prospective tenants
  2. Which in turn decreases the number of days your property remains unrented
  3. Responsible pet owners can make great responsible tenants
  4. Pet owners are more likely to stay longer in pet friendly properties
  5. You could also charge more rent for the property if you are offering a pet friendly environment

Many landlords have a fear that pets may destroy their properties, but in reality most pet owners are extremely responsible and there are ways you can mitigate any of the risks that come with allowing tenants with pets such as…

  1. Putting together a Pet Agreement – which could change depending on the type of Pet your tenant has. An example of this would look as follows, courtesy of  ‘Managing Your Investment Property’ by Rachel Barnes and Geoff Doidge.

The ______ (insert breed) dog named _______ (insert name) and aged (insert age) and registered (insert number of registration) must be suitably kennelled at ____ identify location of kennel on property) and must not be allowed to live inside the house.

The tenant acknowledges that the landlord has agreed to allow the tenant to keep (insert name of dog detailed above) on the property as a specific term of the agreement and the landlord does not warrant or imply in any way that it will consent to other dogs being kept on the property in the future.

If the tenant wishes to keep a different dog than (insert the name of dog detailed above) the tenant must obtain the prior written permission of the landlord. The landlord is not obliged in any way to grant consent to any other dog being kept on the property.

The tenant must remedy any damage caused by the dog to the house or grounds immediately.

The tenant must regularly clean dog fouling from the grounds.

The tenant must control the dog so that it is not allowed to roam beyond the boundary section and it is not allowed to create any other type of nuisance to neighbouring properties.

The tenant must restrain the dog on days the landlord advises an inspection is due to be carried out.

The tenant must pay to have the carpets cleaned and the yard treated for fleas when they vacate the premises.

If any of these terms are breached, the landlord may follow standard procedures relating to breach of tenancy agreement.

  1. Check references: If the persons rented a previous property and they had their pet check with the Property Manager to ensure that they left the premises as expected and that there were no complaints from neighbours re pet noise etc.
  2. Make your Property Pet Friendly: If you take the time to ensure your property is pet friendly, this will assist with any issues. Take for example a tiled house instead of carpeted, this would help with any accidents and mess left when the tenant vacates.
  3. Ensure that regular inspections are carried out. Book in regular property inspections, that way you can quickly pick up any issues that are being caused by the pet.
  4. Get insured. Make sure your landlords insurance will cover the costs of any damage that could be caused by pets.

So next time you are considering renting out your property why not consider rent it out to a Pet owner.

Mistake

21 Mistakes Investors Make

And How You Can Avoid These Mistakes

“Experience is simply the name we give our mistakes.” Oscar Wilde

Mistake 1: Not Getting Educated

We pay thousands and thousands for Academic education  over $40,000 is not uncommon… so we can get a ‘good’ job .  But many are reluctant to pay a fraction of that to get educated to invest in property.   There are courses specifically for development, renovating etc. but what is really lacking is the the fundamental information …. It’s the education you need so that you head off in the right direction.

We are not talking about courses to become a real estate agent, property manager or financial planner we are talking about education that teaches you the fundamentals like where do you start? Who do you need on your team? How do you research and do your due diligence? What investment strategies are out there?

It’s up to you to look after yourself and your own money – KNOWLEDGE IS POWER!

We’ve found you also need Inspiration and the right Network so that you use that education and put it into Action!  And that is why Property Women was created to provide YOU with non biased education, inspiration, networking  opportunities in a fun, supportive environment.

Mistake 2: Not Having a Strategy

If you don’t have a plan and a strategy to work towards you may find that you either do nothing or you follow someone else’s strategy. A strategy that is not Right for YOU – the only way to avoid this is to find out what strategies are out there and what strategy is going to suit you the best.

Mistake 3: Not taking ACTION!

No time?  What will you sacrifice?

Write down 5 Property Goals now.

Switch off the TV – use that time to start actioning those goals NOW!

Mistake 4: Trying to Do it All Yourself

Multi-tasking is fine but not focused action and you don’t need to be superwoman!  How long does it take to clean your house?  What if you dedicated that time to building your property portfolio or a business…would the price you pay for a Cleaner be small in comparison to the time you save, the stress you reduce, and the profit you could make with focused action on wealth creation?

If you don’t have the necessary skills to do a particular task then it is must better to enlist the help of someone who does!

Take some time to work out what your strengths and weaknesses are: then beside each of your weaknesses write down a professional or person who you could outsource this task to and then do it!

Mistake 5: Not Believing You Can Do It!

So many people just give-up as they start to believe they can’t achieve. Like Henry Ford famously said

“Whether you believe you can do a thing or not, you are right.” 

When you hear the negative mantra in your head you need to shut it down. Its like the nagging desire for a cigarette when you are trying to quit or the temptation of dessert when you are trying to lose a little….break the cycle and turn the temptation around from negative to positive.

Think of affirming speech patterns like ‘I believe I can achieve’…now add those 5 goals you wrote down earlier.

I believe I can buy an investment property every year for the next 10 years, I believe I can renovate on my own, I believe I can do this on my salary etc.

‘You need to Believe to Achieve’ – it is a baby step but having a little faith if yourself is going to get you everywhere.

Mistake 6: FEAR – Letting FEAR Stop you…

So worried about making a mistake that you don’t make a move is something that a lot of first time investors have to overcome.

Sure … You may have a ‘gut’ feeling about something and that needs to be taken seriously. But if you look at a house and think you wouldn’t want to live there … does that mean it wouldn’t be a good investment?

Fear has two meanings…

Forget Everything And Run

Or

Face Everything And Rise

Challenge yourself to face the fear and do it anyway! This is true for many things in our lives. ACTION will always set you free from the fear.

Mistake 7: Holding onto Something that Isn’t working for Too Long

Have you heard of something called the “Spider Monkey Trap”?

Hunters in South America trap spider monkeys by filling special jars with very narrow openings with special treats that the monkey’s love. The monkey comes along and is easily able to slip their hand into the jar, however when they grab the treat their fists become too big to extract the treat and their hand and the jar is too heavy for them to carry it away.  Instead of letting go of the treat and running away the monkey just sits their until the hunters come and collect them.

Are you holding on to something that is never going to give you the return your are after? If something isn’t working let it go and move on to your next adventure before your lose more than you bargained for.

Mistake 8: Having the Wrong Structure

Starting out holding the property in the wrong structure can greatly impact on many factors.  Your structure should be determined by the strategy you are planning on implementing, your financial position and if you will costly to change. Strategy related / financial position related / If you’ve made a mistake on this one you may be better to leave the mistake as is.

So the key here really is to get the structure right in the first place and the best people on your team to speak to are your accountant and your solicitor.

Mistake 9: Not Taking Care of your Cashflow

Not tracking your cashflow is a big mistake investors make – when’s the last time you increased your rent? … lots of properties equals lots of missed rent.

Other cashflow monitoring tips include:

  • Finance – check regularly at least once a year to see if refinancing might save you some money
  • Keep on eye on the Property Management Statements
  • Check your water rates make sure you are getting everything you are entitled to from your tenant.

Mistake 10: Being over optimistic with your assumptions

“I can’t lose on this Property!!!!” …don’t be blinded by positive emotion or frozen by fear… Get educated about what you need to know to make an informed decision …. Make a decision and make the decision right.

Mistake 11:  Over Analysing

Analysis Paralysis …I spend so long analysing a property I never get to buy one!  Answer ….stop it!  Write out a list of criteria you need to check … tick them off and then take action!   Or get a coach!

Mistake 12: Not Crunching the Numbers Properly

It’s important that you take the time to crunch all the numbers there are some great tools out their including PIA software to help you do this.  You can get a copy of the PIA software from our shop.

Mistake 13: Not Doing Your Due Diligence Upfront

Not doing the due diligence and research properly can cost you in may ways.

The more information you have the better informed you’ll be when you start negotiating on the property for example.

Things that help with negotiation include knowing what else in on the market, how long your property has been on the market when it was last sold and for how much.

Other things you need to know is how much rent your can achieve, if you can add value and how much that might cost, if you can do the subdivision or development your are thinking of doing etc.

Take the time to really know the area you are buying in, the property you are buying and who your target market is going to be.

Property Women do have a group license for RP DATA that we share with our members if you want to find out more send an email to info@localhost/propertywomen

Mistake 14: Not Starting Early Enough

We all wish we had of started earlier , but alas that time has past so now the best time to start is TODAY – don’t look back in 10 years and wish you had started 10 years ago!

Mistake 15: Not Managing your Credit History

Your credit history is your ticket to getting more and more finance – you need to make sure you have your credit history intact – did you know that if you don’t pay your telephone bill on time the telephone company can now add this to your credit file which won’t look good to your new lender.  Make sure you pay your bills and credit card on time and you should be fine.

Mistake 16: Abusing Your Line of Credit

Be careful with your line of credit – if it is an investment line of credit only use it for investment purposes.

Mistake 17: Not Organizing Finance Before you give up your Day Job

A lot of investors decide that their investing is going so well that they can give up their day job and concentrate solely on Property. Its a great place to be…but make sure you get all your loans for the next projects before you quite your job, otherwise you may find that you cannot borrow anymore because your serviceability has gone way down.

Mistake 18: Talking to the Wrong People too Early and the Right People too Late!

Not surrounding yourself with like-minded people, listening to the wrong people and not assembling the right team are all mistakes that can be avoided.

So who are the wrong and right people anyway?

Firstly stay away from the naysayers they will only instill fear into you no matter how good the property is – stick with like minded individuals who are already investing in property.

Some of the wrong people may include: Friends who are not investing, Family members who are not investing and don’t laugh the Taxi driver – the Taxi driver always has an opinion on the property market but if they aren’t investing then I suggest you don’t listen to them.

Some of the right people include: Property Women (we have a wonderful network of women who are investing in property that love to support other women), Broker, Accountant, Buyers Agent, Solicitor – learn from those who are walking the walk not just talking the talk!

Mistake 19: Buying in the wrong area

It’s important to do your research.

The wrong area is normally an area that is:

  • Isolated
  • Away From Infrastructure
  • Not where Tenants want to live
  • Not near employment
  • In a noisy or dirty location
  • Near bad neighbours

A good area on the other hand is an are that is:

  • Close to Amenities
  • Close to work
  • Where Tenants like to live
  • Location with good resale potential
  • Good growth potential
  • Opportunity to add value

Mistake 20: Believing everything the Real Estate Agent Tells you

Remember who the real estate works for, he/she works for the vendor so they want to sell the house to the highest bidder.  Make sure you know everything about the property from your own or a trusted team member such as a buyers agent observations.

What the agents says is not always what they mean…here are some funny examples we’ve come across.

What the Agent Says

  • Needs TLC
  • Original Condition
  • Its had a few nibbles
  • STCA
  • Spoken to Council
  What the agent means

  • Falling Down
  • Needs Lots of Work
  • Riddled with Termites
  • Doesn’t have a clue
  • Chatted to the guy on the front desk

MistakeWhat the ad reads:

Knock down rebuild

 

What the agent doesn’t know:

It’s a great renovation project

 

Mistake 21: Not Making any Offers

You never know if you’ll get the property for the price that works for you if you don’t make an offer.  If you’ve done your research and you are happy to go ahead make sure you submit your offer.

Happy investing

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

 

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.

ANNUAL 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:  http://www.ato.gov.au/content/downloads/IND00133187n17290608.pdf

New Zealand Inland Revenue (Te Tari Taake)  http://www.ird.govt.nz/toii/property/information/

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.

PERMANENT FILE

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.

 

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