What positive can we draw from the Royal Commission into Banking, Super and Financial Services?

At Property Wizards we understand the value of professional advice. Please see below an article from Raymond Pecotic, Managing Director of the Empire Financial Group with some timely advice following the Banking Royal Commission.

 

 

A great opportunity to really highlight the difference between good and bad advice!

Avid news followers will probably be aware that a Royal Commission has been launched into the Banking, Superannuation and Financial Services Industries.  There are however many who take a more passive approach to following the news, so I thought it best to share a bit of an update and our thoughts on the process so far.

There were no doubt enough questions and concerns raised to justify such an investment of resources that a Royal Commission requires, and to date, the inquiry has not disappointed in highlighting many of these.

The segment of enquiry into the financial advice space has so far revealed some examples of terrible advice, and many instances of not delivering on the service and value proposition that has been promised and paid for.

While perhaps gobsmacking to the average consumer, to those working in professional advice firms competing with this segment of the market and the stereotypes they conjure, it is not surprising.

Every day we have people come to us who have previously been clients of such organisations and we can see the result of simple, transactional, product focussed “advice”.  We also spend lots of time explaining to prospective clients and the wider community the difference between that type of transaction, and the full, proper, professional, comprehensive advice that we deliver.

The timing of this enquiry is critical.  More and more Australians are requiring advice, and often are confused about who to turn to.

The positive that we can draw from the findings of the last month is that we can now more easily identify what constitutes proper and professional advice from the alternative.  This inquiry and its findings are therefore very important.

As a reminder to those in our network, and for you to share with any friends, family or colleagues who may seek your guidance or a recommendation to a suitable adviser, I’d like to remind you of the following ways we differentiate ourselves from some of the practices being discussed over the last few days:

  • We have flat, fixed initial and ongoing retainer fees, decoupled from the value of the invested amount, and determined independently of where the funds are invested.  We were pioneers and have adopted this approach since 2009, well before regulation and legislation required a rethink of how advisers were remunerated.  We embraced this model because we wanted our advice and how we were remunerated to sit separately from how much money our clients came to us with.  We like to say we are “asset class agnostic” – as long as the timing and type of investment is right for your circumstances, we keep a very open and objective mind to where and how funds are invested, and those decisions are not driven by commissions or kick backs.
  • We take a “Strategy First” approach to financial advice. Our advice is not product or investment focussed, but strategy focussed.  Where are you now, where do you need or want to be, and then modelling out mathematically the steps required to get there.  Our value is derived from identifying efficiencies, analysing your income and expenses, tax structuring and keeping you on track to your goals, rather than through the facilitation of a “product”.  Strategy is first – any financial instruments required to help you get there are a very distant second (and maybe even third or fourth) place.
  • Our ongoing review process is proactive.  All of you will know that we will proactively contact you, and continue to follow up on locking in dates for our regular scheduled reviews.  This is important to keep you on track and for us to demonstrate value and justify our relationship.
  • Our education standards are well above the norm for the industry.  We believe that in order to present ourselves as professionals, robust education standards are required as a pre-requisiste.  All of our advisers and paraplanners have either Commerce or Business degrees, as well as some with Masters in Financial Planning and other post graduate qualifications. Our staff have shown a dedication to the financial advice profession through investing in their professional training and qualifications.  They are career advisers, not “flash in the pan” product pushers.
  • We take a team approach to all client management.  We are not a one person outfit, or run as a co-op of individual advisers sharing resources.  All our clients finances are managed by a team of at least three different experienced and professionally qualified team members at any one time, with sometimes up to six people managing different aspects of your affairs.  This results in a very strong internal cross checking and accountability process. Our system does not allow for rogues or lone wolves.

 

What does all this mean??

Our last survey of clients, conducted independently by the Beddoes Institute, resulted in an overall Practice Satisfaction rating of 91%, including scores of 93% for Technical Expertise and Articulating Value and a 94% for Practice Adviser Trust Score.

This is not surprising given that 93% of respondents also said they would, or already have, referred their friends, family or colleagues to us.

And that is the greatest endorsement of all of the quality of advice and guidance we provide, and the value that we add.

As always, our door is always open to assist you, and if you’d like to discuss this any further, please do not hesitate to give any one of our team a call, or ask to speak to me directly at any time.

https://www.efg.net.au/positive-can-draw-royal-commission-banking-superannuation-financial-services/

Raymond Pecotic B.Com. Adv Dip Fin Serv, AFP
Managing Director

 

 

Waiting for Proof the Perth Market has Bottomed (You may want to rethink your strategy)

 

Homebuyers and investors waiting for proof the market has bottomed out may want to re-think their strategy.

The practice of sitting back and waiting for confirmation the market has definitely bottomed out could be a costly move.

Many buyers want to have certainty, so they stay away from the market until they see strong evidence of price growth across the board.

This tendency means when the market is at around the bottom, there are less takers and it can present the perfect opportunity for astute buyers to potentially snap up a bargain from a keen seller and give you a head start on others.

Making the most out of property investing is about the right property choice and time spent in the market, rather than trying to time the market – and this is certainly true for the Perth market right now, so if you delay buying, you risk missing out.

Selecting your ideal property

However, buyers must remain aware that just because there are properties available does not mean they are good investments and selecting the right property is crucial. Similarly, some sellers are still asking too much, and those overpriced properties will be left sitting even as the market turns.

The majority of our enquiries are for add-value properties – those where the price is good to start with and then offer potential for adding value quickly, making it even better. People are wanting to be more in charge of their own destinies – I guess because the market has messed them around a little in the last few years.

So being back in control of decisions relating to their financial security and future is paramount in the minds of investors in the Perth market. Self-Managed Superannuation Fund buyers, and those people looking to escape the rat race through investment are key players at present.

They are buying now because sentiment is turning and for the good properties there is already competition, meaning prices may soon start to edge up.

Choosing the right suburb

Choosing the right suburb is critical. Areas close to the city, the ocean or river are where people most want to live. Next best is having easy access to these lifestyle attractions along with others such as shops and cafes.

Being close to work opportunities and good schools ranks highly and fly-in fly-out workers want easy access to the airport.

Areas that have good long-term prospects – not just flavour of the month and not just because next year is expected to be good – you need it to continue being good.

Also, where you can get good add value opportunities, whether they be renovation, subdivision, development, future rezoning or just that extra X-factor that sets it apart from others.

If you want more information about property investing, why not read our Property Investing Beginner’s Guide eBook.

If you’re not sure what type of strategy would best for you or you would like to learn more about different strategies, why not download our 4 Strategies to Success fact sheet.

Or, if you’re ready to talk about buying your first home, why not complete our Getting Started form to get the ball rolling.

Need finance?

If you’re ready to invest and you’ve got any questions about finance, call us for a free Financial Health Check: 08·9381·7450 or download our Finance Services information.

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Property Wizards believes everyone has the right to the knowledge to help you accumulate wealth, no matter your background, education or income.

We can help you unlock the potential of the real estate market for your family through savvy property selection, negotiation on price and conditions, development expertise and the magic of robust research.

Regardless of market conditions, our research, local knowledge, and access to silent sales means we find the hidden gems that can outperform the market in capital growth and rental returns for long term wealth creation.

Importantly, we’re able to provide property investors and homebuyers with the same level of representation that property sellers have benefited from for years.

Your property portfolio is your path to financial freedom and the lifestyle you’ve been longing for.

Property Wizards takes away the stress of buying a property and saves you money at the same time. We can show you how, or you can sit back and let us do all the hard work for you.

 

 

Confidence Key To Winning At Auction

Property Wizards was in the thick of it at a recent auction and we were thrilled to come away with a win for our clients, who are looking forward to moving into their new home in Leederville! To add to the excitement of the day, the property was secured with a great saving, $40,000 under the reserve price.

Our clients came to us with the property in mind for their future home, pending a thorough renovation. Having had their pre-purchase building and pest inspection attended to, they were looking for the extra edge to get over the line on auction day. That edge is all about confidence, which comes from thorough preparation and experience.

With a week to go before the auction, the team at Property Wizards had all hands on deck to complete our detailed due diligence checks, including the research into prices in the area. With a clear idea of the value of the property, our clients were able to confidently set a budget and move forward with their plan to buy.

Read more…

What the Federal Budget means for Perth investors

Looking at the Federal Budget
We’ve had a month now to digest the Federal Government’s May 9th Budget release and the impacts its measures will have on the real estate industry. Housing affordability was an important feature of this budget, with several implications for first home buyers and investors. No matter what your interest in property, we’ve outlined the key measures here.

If you are an Australian investor:

In the lead up to the budget, the media reported a lot of chatter about sweeping changes to negative gearing. Despite this, the Government has chosen to support the property market by maintaining most of the current capital gains tax and negative gearing rules, with two main exceptions.

If you’re looking interstate for investment opportunities, bear in mind that the deduction for travel expenses associated with your investment property has been removed. And if you have previously travelled to inspect your property and also have a bit of a holiday, you can no longer deduct the portion of travel costs relating to your property.

The depreciation allowances have been changed for investment properties purchased from 9th May 2017. Going forward, plant and equipment depreciation deductions can only be made on expenses that you incur personally, or on a brand new property. Plant and equipment assets installed by a previous owner, such air conditioners, dishwashers, carpets and curtains, will no longer be claimable. You will still be able to claim eligible plant and equipment depreciation on assets in investment properties you owned prior to 9th May, and you will still be able to claim depreciation on capital works deductions (for example, the installation of a patio) carried out by previous owners.

The Budget also includes $1.3bn for an agreement to deliver housing supply targets, $1bn towards removing infrastructure impediments to development, and will increase the CGT discount for investments in affordable housing. These measures are designed to both contribute to downward pressure on prices and encourage the development of new housing stock, making housing more affordable.

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If you are a first home buyer:

Housing affordability is one of the cornerstones of this budget, and the measures outlined above are designed to make it easier for you to get into your first home. Investors are being incentivised to increase the housing stock available, pushing down prices.

To make it easier for you to save your deposit, you will be allowed to salary-sacrifice up to $15,000 per year for up to two years into your superannuation fund, which you will then be able to access for a deposit at concessional tax rates. These contributions from your pre-tax salary may then also lower your tax bill, meaning more money in your pocket at tax time.

Other measures in the Budget include the promotion of rent-to-buy and other shared equity schemes, and encouraging over-65’s to downsize their family home by allowing them to make a non-concessional contribution of up to $300,000 from the sale into their super fund, freeing up larger houses for families.

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If you are a foreign investor:

This budget has made it tougher for you to purchase an investment property in Australia. You will still be required to buy a new property, however developers are now limited to selling no more than 50% of a development to foreign investors. Further, there have been changes to foreign resident’s capital gains tax, with the rate increasing to 12.5% and the threshold dropping from $2m to $750,000. You’ll also want to have a great property manager on board, with homes vacant for more than 6 months incurring a levy of $5,000+.

Overall, the measures introduced in this Budget are likely to have a positive impact on Perth’s real estate market, making properties more affordable and boosting the available supply. The removal of travel expenses will encourage local investors to return to the Perth market, rather than looking to Sydney or Melbourne, and the removal of plant and equipment depreciation deductions should provide a boost for new properties, which is great if you’re pursuing a yield based investment strategy. While you may have some concerns about being out of pocket on second-hand properties, the right older home in a good location will still be a superior investment if you’re pursuing a capital growth focused strategy.

If you want more information about property investing, why not read our Get Ready to Invest in Property eBook.

If you’re not sure what type of strategy would best for you or you would like to learn more about different strategies, why not download our 4 Strategies to Success fact sheet.

Or, if you’re ready to talk about buying your first home, why not complete our Getting Started form to get the ball rolling.

Need finance?

If you’re ready to invest and you’ve got any questions about finance, call us for a free Financial Health Check: 08·9381·7450 or download our Finance Services information.

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Five Property Investing Stop Signs…

…and how to turn them into green lights

Success in property investing is a journey that starts with a single step, with financial security and long-term wealth generation your destination. However, before you can follow in the footsteps of successful real estate moguls before you, or blaze your own trail, you need to be aware of the many potential pitfalls that could send you down the wrong track.

There are several factors that can have a bearing on whether or not you should get started in property investing, and it’s important to give careful consideration to your situation before taking off.

We’re taking a look at stop signs that may prevent you from proceeding with a successful investment, as well as the steps you can take to turn those red flags into green lights

1. You haven’t made a map

It’s a common story all over Australia; budding property investors racing headlong into buying an investment property without proper direction. It’s hard to succeed in real estate if you don’t know where you’re going, or how you can get there, and you’re at risk of buying the wrong property or borrowing more than you can afford. This can lead down the path to significant stress and financial difficulties.

Just as you would follow a map to get to a new destination, you should sit down and work out a detailed investment plan before buying your first property. Questions you need to ask yourself include what financial goals you want to achieve, when you want to achieve them and how you will make them a reality.

It’s a little more involved than typing an address in Google Maps and requesting directions, so consider speaking to a trusted financial planner, mortgage broker or property investing expert to help put your strategy together.

2. You bypassed your research

Location, location, location is the real estate industry’s favourite catch-cry, but selecting the right investment property is much more complicated than just choosing a “hot” suburb. You need to be aware of what the property market is doing to get an idea of where to go.

You’ll want to get an idea of the types of properties that will help you achieve your goals, the areas where they are in demand, and the types of tenant they are likely to attract. Their potential for capital growth and rental return are impacted by the public services and amenities nearby, as well as the local Council’s vision and policies for future development.

From suburb profile reports to  government zoning and infrastructure plans, there’s an array of useful information available. Chatting with a trusted buyer’s agent can also help you access a wealth of useful knowledge.

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3. Your goals are unrealistic

Success in real estate is a marathon, not a sprint. You need to be realistic about the growth potential of the property you choose, and how long you expect that growth to take. 99% of the time, property investment provides a medium- or long-term investment option rather than a chance to turn a quick profit.

If you have spent quality time on your strategy map, done thorough research and given careful consideration to the potential potholes in the road, it will be easier to keep a realistic outlook and you’ll have a much better chance of success.

4. You ignore the need for ongoing upkeep

Owning an investment property is not as cut and dried as making a purchase and waiting for capital growth.  Unlike other assets that don’t require ongoing attention, an investment property needs regular tune-ups. You’ll need to find tenants, follow up rent, and take care of repairs and maintenance.

It is possible to attend to this yourself, but you may have better results by hiring a property manager. The right property manager can help you meet the responsibilities of being a landlord, navigate potential tenant issues, and assist you in getting adequate insurance cover in place.

5. You’re afraid to ask for directions

No matter what type of investing you’re planning on getting involved with, one of the biggest mistakes you can make is assuming that you know everything and venturing forth unprepared. There are plenty of roadblocks to overcome, so the more knowledge you have at your disposal the better your chances of success.

Hopefully, you’re now aware of your blind spots, so you know where it would be best to ask an expert for directions. Do you need help choosing the right investment loan? Ask a mortgage broker for assistance. Are you having trouble finding the right investment property? An experienced buyer’s agent can help. Are the taxation and other financial implications of investing making your head spin? Your accountant or financial adviser can offer the support you need.

If you’re willing to ask for advice from people who know more than you, their knowledge can point you towards an investment property portfolio that delivers you to the results you want.

Download your Strategy Tool

If you want more tips about turning potential property investment mistakes around, why not read our 19 Disastrous Mistakes Made by Property Investors eBook.

If you’re not sure what type of strategy would best for you or you would like to learn more about different strategies, why not download our 4 Strategies to Success fact sheet.

Or, if you’re ready to talk about buying your first home, why not complete our Getting Started form to get the ball rolling.

Need finance?

If you’re ready to invest and you’ve got any questions about finance, call us for a free Financial Health Check: 08·9381·7450 or download our Finance Services information.

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To stay up to date with our latest information, property news and blog posts, you can subscribe, or follow us on Facebook and Twitter.

Can you afford your first home?

If you’re thinking about buying your first home, there’s no better time to act. With Perth’s property market favoring buyers and interest rates at record lows, you’re in a better position than ever to achieve your dream of home ownership. Here are our top five tips for getting started!

1. EVERYTHING IN MODERATION, INCLUDING MODERATION

You don’t have to sacrifice your entire lifestyle to save up for your deposit, and in fact you’re likely to be better off if you’re still enjoying yourself at least a little!

Moderate adjustments to your lifestyle, such as giving up your morning coffee, can really add up, ensuring you are able to regularly save a pre-decided amount. It’s important to make it a realistic amount; if you aim to save too much and try to live on two-minute noodles, you won’t stick to it. Weigh up the lifestyle you want versus what you really need; maybe that morning coffee is a necessity, but you’re not using that gym membership anyway.

2. MANAGE EXPECTATIONS

Even in a buyer’s market where you have your pick of properties, it can be challenging to keep an eye on what you can afford. Don’t fall into the trap of unrealistic expectations about the number of bedrooms or stunning waterfront views. Instead of focusing on a brand new home with all the trimmings, make a list of features you cannot live without.

Try not to be too restrictive, and consider looking at properties that you can adapt how you like later. It’s more important to get your foot in the real estate market door in a good location than to hold out for your dream 5 bedroom 3 bathroom house with a scullery!

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3. BUY SMART FOR LONG-TERM GAIN

You have a list of the most important things to you, and undoubtedly an idea of the ideal location to begin your new phase as a homeowner. However as with your expectations of the house itself, you need to be realistic and smart about the location. By taking a long-term view, you should be able to capitalize on the long-term growth of the area and leverage that into your future real estate investments.

By adjusting your rose-tinted glasses and keeping your budget firmly in mind, you may find that your ideal property, in the ideal suburb, may not be your first home, but it won’t be out of reach forever.

4. BE CAREFUL WITH THE FHOG

At present, Western Australia’s first home owner grant only applies to new builds, aiming to stimulate new housing. While understandable from the government’s point of view, it can deter those who are relying on it from considering lower-priced, second-hand homes in superior locations.

If accessing the FHOG is critical to your budget, one option is to buy a new apartment. You could still benefit from the FHOG, while getting into a good area, close to amenities.

6. GET IN EARLY

We have said it before and it’s worth repeating; success in real estate comes down to time in the market, not timing the market. The sooner you purchase your property and the longer you hold it, the better it can perform as an investment.

The same goes for saving money. If you have been taught early in life about saving, and made the effort to regularly hoard a portion of your pocket money, by the time you’re in your early twenties, you should have a decent deposit. Even without that head start, the sooner you begin, the better off you’ll be. Just remember the golden rule from tip 1: make it realistic so you can stay focused while making the most of your youth!

Download your Strategy Tool

If you want more information about property investing, why not read our Get Ready to Invest in Property eBook.

If you’re not sure what type of strategy would best for you or you would like to learn more about different strategies, why not download our 4 Strategies to Success fact sheet.

Or, if you’re ready to talk about buying your first home, why not complete our Getting Started form to get the ball rolling.

Need finance?

If you’re ready to invest and you’ve got any questions about finance, call us for a free Financial Health Check: 08·9381·7450 or download our Finance Services information.

Connect

To stay up to date with our latest information, property news and blog posts, you can subscribe, or follow us on Facebook and Twitter.

Property and finance services under one roof (FACT SHEET)

As we announced recently, Property Wizards has launched its finance brokerage arm – so we can now offer property buying and finance services under one roof.

The move was fuelled by our customers’ demand for quality financing:

“Throughout our property buying process so many of our clients ask for help with their finance. They want a smooth process where their property and finance is all taken care of without any hassles, and with a single point of contact. So it made sense to us to extend our service offer to include finance.” – Liz Sterzel, Property Wizards director

We’ve teamed up with award-winning finance group House and Home Loans to provide a quality range of services and products.

“We chose House and Home Loans because their premium standing with the banks gets us priority service and we can negotiate rates – not just accept what is offered to the market.

 

DOWNLOAD YOUR FINANCE FACT SHEET

 

 

Complementary services

Property investing can be quite complex and introducing a service that is complementary to our existing services simplifies the whole process. We’ve found that our customers like the synergy between their property investment and finance strategies and we can get them into the right structure from the start.

The service includes loans for investment properties, self-managed super funds (SMSFs), construction and development, commercial property and homes.

We also review existing loans to ensure our clients get the best discounted rate available. We have saved clients substantial amounts just by restructuring their existing loans.

How does it work?

Our goal is to keep it simple. So we take you through our simple 5 Steps to Finance process. We first assess and understand your finance goals and budget, develop a strategy, conduct a loan search, then help you apply for the right loan.

Our simple but comprehensive service allows you to enjoy a stress-free, smooth process, with one point of contact throughout. This can be integrated with our buyer’s agent and development services, or accessed on its own.

Now is an excellent time to review your loans, especially if you want to fix your rate as they are the lowest fixed rates we have seem for some time.

For more information about our finance service, call 08·9381·7450 or download our Finance Service fact sheet.

Property Wizards launches finance service

Award-winning Perth buyer’s agency Property Wizards has launched its own finance brokerage arm.

Managing director Liz Sterzel said the move was fuelled by their customers’ demand for quality financing.

“When we are going through the detailed processes of property buying for our clients, so many of them ask for help with their finance,” Ms Sterzel said.

“They want a smooth process where their property and finance is all taken care of without any hassles, and with a single point of contact. So it made sense to us to extend our service offer to include finance.” (more…)

Why it pays to have professionals on your team at auction (CASE STUDY)

Property Wizards represented a client at auction over the weekend and achieved a fantastic outcome – securing them a beautiful home in the Perth hills.

The property was secured at $25,000 below the bank’s reserve using auction techniques and skills to ensure bids did not reach any higher than they had to and through skilled post-auction negotiation. Here’s how… (more…)

Yield or capital growth – which property investment strategy should you go for? (ANALYSIS)

If you’re just starting out in property investment and you’re not sure which investment strategy is right for you, it’s worth exploring the differences between yield and capital growth.

Understanding the differences can help you work out which strategy is right for you, and therefore the type of property you should be looking for. (more…)

What’s the difference between a real estate agent and a buyer’s agent? (Q&A)

While most people know what a real estate agent – or seller’s agent – is, it seems not everyone knows what a buyer’s agent is – or does.

So we thought we’d break it down. (more…)

Have it all – why single women make great property investors (SPOTLIGHT)

iStock_000017108927Large

This International Women’s Day, we thought we’d celebrate female empowerment by taking a look at female property investors.

An article last year, Single girls top guys in homeownership stakes, revealed that according to the Australian Bureau of Statistics, single women’s ownership of property is higher than that of single men.

It also showed that despite the oft-documented gender pay gap, in the property sector, some women are outperforming men. (more…)

Saving tips for first homebuyers (NEWS)

Property Wizards was recently approached by The Sunday Times Real Estate Magazine to provide advice and savings tips for first home buyers.

Here’s what director Trevor Dunkley had to say.

With the Perth property market at the bottom of its cycle and interest rates still low – for now – it’s a great time for first home buyers to get into the market.

However, there are several things to consider when it comes to saving for that first home loan and being aware of the pros and cons of the government’s first home owner’s grant. (more…)

Have you thought about investing in commercial property? (TIPS)

When you think about property investing, a lot of people immediately think of residential property.

But there are also opportunities to generate wealth from commercial property investment, so long as you understand the key differences between commercial and residential investment markets.

While many investors understand residential property because they may have bought and sold homes themselves, commercial property is more complex. The factors that drive the success are different and the things to consider when choosing your purchase are different.

And before you start, you need to get a few things in order:

  • Pre-determine a budget
  • Consult with your finance broker
  • Check with your accountant if you need to register for GST
  • Decide what entity you will hold the property in

 

Property Wizards director Liz Sterzel shares her tips for achieving success in commercial investing – for those crossing over from residential or those just starting out: (more…)

On the move – Perth property market on the rise again (ANALYSIS)

While there’s been a lot of focus on the downturn in the Perth property market, there’s plenty of good news coming in.

A number of sources have revealed that Perth’s property market has reached its low and is starting to show signs of improvement. (more…)

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