Investing can be a big life-changing decision, particularly if you are thinking of investing for the very first time. The smallest of mistakes can cost you many hundreds, if not thousands of dollar, literally. 

In the 1990’s, management guru Dr. Stephen Covey explained what he believed to be the defining characteristics that distinguish ‘highly effective people’ in his book The Seven Habits of Highly Effective People. This book has become a modern-day business classic.

Not surprisingly the 7 habits Covey suggests we should aspire to if we want to replicate the achievements of others are also very important to the business of property investment.

At the end of the day, it is our hard-earned money that we want to turn into our children’s university fund, our first family home or any other reason most dear to us.

So let’s take a moment to reflect on our top 10 habits of a successful investor.

Here’s Our Top 10 Habits Of A Successful Investor:

1. Begin With The End In Mind |Focus on your desired outcomes and work towards your goals. This habit is based on imagination – the ability to envision in your mind what you cannot at present see with your eyes. It is based on the principle that all things are created twice. The first creation is mental, the second is a physical creation. The physical creation follows the mental, similarly as a building follows a blueprint. If you don’t make a conscious effort to visualise who you are and what you want in life, then you empower other people and circumstances to shape you and your life by default. Begin with the end in mind means to begin each day, task, or project with a clear vision of your desired direction and destination, and then continue by flexing your proactive muscles to make things happen.

2. Embrace Change | Successful investors don’t let change stifle their growth. Most people don’t like change but embracing change can be a very powerful habit to go through life with. “Those that adapt survive”. Adapting is both a survival skill and a success skill. Change is difficult for some people – for some it’s pure laziness but for others we don’t like the lack of control or the uncertainty of bruised egos, worse outcomes or perhaps embarrassment or failing. Sadly, if you don’t learn to embrace change you will go through life very frustrated.

3. Know How To Say No | Turn down opportunities that do not fit your strategy. Once you are clear on your strategy it is very simple to say ‘no’ to other things, sometimes known as distractions.

 4. Know Your Target Demographic | Understand what area your demographic desires. If your target market is families, as an example, you must invest in areas with infrastructure family’s desire – schools, shops, jobs, transport, parks. If your target market is young singles then they prefer to live in areas with night life, bars, restaurants etc. Get the area right for the demographic.

5. Buy With Head, Not Heart | Separate emotion from the deal and focus on numbers. Smart investors know that to be really successful in property investing they must buy the right kind of property and know their numbers. When purchasing your own home emotion should come in to the equation as you need to love the place. However, when you are buying property as an investment it’s a completely different strategy. You don’t care about the colour of the tiles necessarily because cream won’t get you any more rent than the white ones. But making sure the numbers stack up, well that’s important.

 6. Plan To Achieve Goals | Work with a strategic plan and review it regularly. Goal setting is a process that starts with careful consideration of what you want to achieve. It not only allows you to take control of your life’s direction; it also provides you a benchmark for determining whether you are actually succeeding. We suggest you check in with your goals on an annual basis at least, preferably more often to ensure you are on track.

 7. Take Action | Procrastination kills all deals. Take steps to move forward. Experienced investors know that confidence is key to entering the property market. Lack of education and the ‘doom and gloom’ of headlines are often stumbling blocks for people looking to invest. Keep moving forward.

8. Sharpen The Saw | Continually look for wisdom and not just information. Sharpen the saw means preserving and enhancing the greatest asset you have–you. It means having a balanced program for self-renewal in the four areas of your life: physical (beneficial eating, exercising, resting) social/emotional (making social and meaningful connections with others), mental (learning, reading, writing and teaching) and spiritual (spending time in nature, expanding spiritual self through meditation, music, art, prayer or service).

 9. Not Afraid To Alter Objectives | Learn to measure, modify and achieve objectives as circumstances change. Objectives are not fixed, and will change from time to time in response to changes, which offer opportunities.

 10. Invest In People | Surround yourself with the right team to make better, smarter decisions. When it comes to investing, it’s important to surround yourself with a success team that will help turn your goals into reality.

For more articles about the habits of successful property investors, see:

• 7 Mistakes Commonly Made By Investors
• Our Top 5 Popular Recommended Books
• What 95% Of Investors Get Wrong

If you have any questions regarding this blog that you would like to discuss with one of the team at CPG, then please feel free to contact our office.

With the end of the financial year fast approaching, it’s a good time to think about what you can do to maximise your tax deductions. One of the easiest ways to boost your tax return is by taking advantage of the deductions you’re able to claim. Claiming tax deductions reduces your taxable income, meaning you’ll pay less tax and hopefully get a bigger tax return.

In this blog, we’ve listed our top three ways for easily claiming tax deductions. Read on to find out how you could maximise your deductions coming up to the end of the financial year.

1.APPLY FOR A PAYG WITHHOLDING VARIATION

Property investors often rely on tax breaks to make money on their investment. However, waiting until you file your tax return can cause serious cash flow challenges for some so using a PAYG withholding variation is a great tool for savvy property investors.

A PAYG Withholding Variation (used to be known as a Section 221YD variation) allows you to access the tax benefits of an investment property each week to help relieve cash flow restrictions throughout the year. Rather than waiting for the financial year to end, then submit your tax return and wait patiently for your refund you can access your money sooner.

Many people like to get a big tax refund at year end, but why wait for your refund? We find that some people spend it on a holiday or treat themselves when in fact it might be better used paying down your home loan, reduce debt or go towards holding costs of your investment property. We find those with PAYG withholding variations tend to use the money more wisely than those receiving a lump sum.

You can lodge a Pay As You Go (PAYG) Withholding Variation which if accepted will direct your employer to withhold less tax from your pay and give more cash to you during the year.

In particular people who have several properties may find it a good strategy to help cover costs and manage their cash flow.

Why not get it now? The Tax Office allows you to do just that. Here’s an example to show you the benefits:

CASH FLOW ON AN INVESTMENT PROPERTY — A CASE STUDY

For example, if purchasing a typical $400,000 investment property over one year.

Rental income – $19,000

Interest expense – $27,000

Other general expenses – $4,000

Pre-tax cash flow (negative) – $12,000

So you need $12,000 per year—or $230 each week—to support this property while you wait for your tax return. If you had two or more investment properties, you’d need to find $24,000 to $30,000.

CASH FLOW — WITH TAX BREAKS

Here’s the figures on the same property, including tax breaks.

Rental income – $19,000

Interest expense – $27,000

Other general expenses – $4,000

Tax break (deductions) – $7,560*

After-tax cash flow (negative) – $4,440

Now, $4,440 per year—or $85 each week—is obviously easier to find than $230 a week. It’s clear these tax breaks make investing in property much more affordable.

*Assuming all the expenses are deductible as spent and total income is above $100,000, with the marginal tax rate of 37% (excluding Medicare and other levies).

How to apply for the variation

Firstly you should discuss this option with your accountant to confirm that you are eligible and that this is suitable for you. Read more about how a variation could be advantageous for you HERE.

2.ARRANGE YOUR PAPERWORK

It can often be overwhelming at tax time if you are not organised and have an efficient system for your paperwork. Getting your tax documents together throughout the year might seem tedious but come July that extra organisation has benefits.

There are numerous bits of paperwork including loan statements, rates, water, insurance, lease agreements and if you have more than one property, it can be even more harrowing trying to keep it all together.

This is just another way to avoid falling in to the traps most investors make?

Here are our top tips to stay on top of tax time this year:

• Use software to record your expenses: Something simple like an Excel spreadsheet will be beneficial in keeping up to date with your spending throughout the year.
• Make a habit out of staying organised with paperwork: Schedule a time each month to sit down and make your tax a priority. This will avoid things piling up and getting out of control and will alleviate hours spent in July trying to sort stuff before lodging your tax return.
• Arrange a dedicated place to keep tax documents: It could be a lever arch file, a physical shelf on a bookcase or a digital folder in a cloud application like Google Drive, OneDrive or Dropbox. File all of your tax spreadsheets, your book keeping records and your receipts. This way you won’t spend hours tracking down the documentation you need in order to lodge a return because it’s already in one spot. Many suppliers already provide statements electronically – rates, banks and real estate agents.
• Download an app on your phone to help you organise receipts: Keeping record of lots of receipts and invoices can be difficult to keep track of. Many of our clients simply photograph their receipts and store them in an app that makes it easier to find and categorise later in the financial year.

Being organised throughout the year is a good idea to relieve any unnecessary stress and it will help you feel in control of your investments. To learn more about what you might be able to claim visit the ATO’s guide for rental property owners.

3.REVIEW YOUR LOANS

This should be done on a yearly basis, very much like your insurances. Interest paid on your investment loans will be the most significant expense and even though it is tax deductible it’s always good to reduce your holding costs.

It’s always best to speak to a mortgage broker who specialises in investment debt to do a review of your loans and find out what is available, based on your personal circumstances.

BONUS TIPS TO MAXIMISE YOUR TAX REFUND

• Obtain a quantity surveyor report so you can claim Div 43 building write-off. This can be a significant deduction.
• Pay any rates and insurances etc due in July when they are issued in June.
• Conduct any small repairs to maximise this year’s tax refund. Don’t wait until later in the year.
• Prepaying interest on the loan or additional super contributions may be beneficial. Often if you’ve had a redundancy, distribution or capital gain this can be a good idea.

Please note: We recommend that you speak with a qualified tax agent before taking any action that may impact your tax position and a financial planner before making additional super contributions. Remember tax agent fees are also a tax deduction.

Please call us on 08 6323 2306 or inquire online if you would like to know further information about how to prepare for the end of the financial year.

Whether it’s an investment property or a property you have lived in and vacated, you’ll want to ensure that you protect both yourself and your property, whilst getting the best possible return.

We often get asked ‘should we use a property manager or just rent it ourselves?’ and our response to that is always ‘use a reputable property manager’.

Here’s Our 3 Step Strategy To Renting Your Investment Property Successfully:

1. Higher Quality Tenants

An experienced property manager will likely have seen thousands of applications and knows how to identify the good from the bad. This kind of experience takes time and you can rest assured that they will analyse information for any warning signs or red flags.

A thorough screening process results in reliable tenants that:

• Pay on time
• Rent longer
• Put less wear and tear on your property
• Generally cause less problems

Good tenants are a precious commodity – they will treat your property as if it were their own, they pay their rent on time and they stay for a longer period of time.

2. Shorter Vacancy Cycles

A property manager will help you determine critical things which will affect how long it takes to rent your property:

• Determine the best rent rate: Each week your property is not rented it costs you a chunk of money so take your property manager’s advice. If the weekly rent is too high, in the long run it will cost you more than if you had just dropped the rent by $5 or $10 per week and had it rented straight away. Determining the optimal price requires access to rental rate tools, knowledge of the local area and data on recently rented properties.
• Effectively market your property: With years of experience in writing ads your property manager will understand how to formulate a good add. They will also know where to advertise in order to attract a larger pool of candidates. Additionally, because of their volume they will be able to negotiate cheaper advertising rates both online and offline.

When you go to rent your property its success will heavily rely on your rental strategy.

Remember, choose your property manager wisely as they will be part of what we like to call you’re A-team. Knowing that you will probably be an owner of more than one investment property, it’s a good idea to spend the time in the early stages finding a property manager who has your best interests at heart and is experienced in the industry.

Choosing an agency based purely on the lowest fees could end up costing you in the long run.

3. Managing Paperwork And Responsibility

There’s a remarkable amount of paperwork that can be involved with managing an investment property including lease agreements and contracts for repairs and maintenance, property rules and regulations.

Your property manager will ensure the tenant completes and signs their contract which is very important as it protects the investor. Some investors overlook this key part of renting a property which can result in problems down the track between the tenant and the owner.

Experienced property managers will also be up-to-date on the latest zoning regulations, property values, landlord rights and federal and state laws. 

What Are The Personal Benefits For Owners?

• Less stress – Its no fun taking phone calls in the middle of the night from your tenants or needing to chase unpaid rent. Do you know the process to evict a tenant from your property or what the process would be if tenants did some damage to your property? Possibly not…
• More freedom – By using a property manager you are not restricted by needing to buy locally – you can diversify your portfolio and invest in another town or even interstate. Additionally, you will not need to always be available in the event your tenants need you.
• Free up more of your personal time – You know the saying ‘time is money’… well for many investors time can be profitably spent better elsewhere and not servicing their properties. Be free to enjoy time with your family or friends, or doing the things you actually enjoy.

For more articles about being a successful property investor, see:

• 7 Mistakes Commonly Made By Investors
• What Does The Perfect Investment Property Look Like
• How To Be Smarter Than The Banks When Investing In Property
• What 95% Of Investors Get Wrong
• Investing For Cash Flow vs Capital Growth

If you have any questions regarding this blog that you would like to discuss with one of the team at CPG, then please feel free to contact our office.

Wondering how to avoid falling in to the traps most investors make? Would you like to know how to avoid losing money and putting yourself at risk when buying a property as an investment?

When it comes to investing in property there is no shortage of information available to help investors navigate their way in order to ensure success. However, there are many common mistakes made by those who are inexperienced, who perhaps are first time buyers or simply haven’t grown up in an environment where investing was a thing.

Most investors start with an intention of doing it right, but only a small percentage actually get past their first investment property and even less will create real wealth in the property world.

Why do you think this is? Maybe they don’t have the knowledge to take the first (or next step), it might be that it’s all too scary or perhaps they simply don’t have someone in their world to show them the ropes.

Purchasing an investment property is usually the second largest financial investment you will make, after your own home. If your car breaks down, you go and see a mechanic… if your power goes off you call an electrician – experts in their field. Here at CPG we specialise in the success of property investors, guiding our clients through the obstacles and challenges which commonly occur when buying property.

To help you, we share the top 7 mistakes commonly made by investors and some tips on how you can overcome these to smash your investing goals out of the park!

7 Mistakes Commonly Made By Property Investors

1. Buy A Property Close To Home – this happens all the time and we find one of the main reasons people do this is because they are familiar with the area. They know where the local shops are located, how far away the school is etc. Also, they like to be able to drive by it on the weekend. Bad move!

2. Buy With Heart Rather Than Head – when purchasing an investment property always let facts and figures determine your purchase decisions. Leave emotion at the door. Now is not the time to get attached to the colour of the tiles – the white ones won’t get you any more rent than the cream ones. Rather, you should be focussing on the bottom line and how much the property will put in your pocket each week. After all, each extra dollar spent is a dollar out of your pocket.

3. Ask A Real Estate Agent For Advice – they work on behalf of the seller so have their best interests at heart, rather than yours. You will only get answers that favour them because they really want to sell you something. Contrary to the image a property investor might conjure up, in reality the residential investment market is dominated by people who have brought their own home, and then decide to purchase an investment property using the equity in their home. These investors own 83 per cent of all investment properties.

4. Have The Wrong Financial Structure – this is one of the most important components when borrowing to purchase an investment property and often not done correctly. It’s key to use a different bank than the one you have your home with and often it’s best to focus on paying off your home loan debt first, rather than investment debt. See more in our recent blog and if you need a connection to a great broker speak with our team – How To Be Smarter Than The Banks When Investing In Property.

5. Wait For The Deal Of A Lifetime – progress is better than perfection. There will always be a better deal. Don’t get caught up in believing the grass is greener! Procrastination kills all deals so understand the numbers, do your research and move forward. The longer you wait the more you will pay. Simple.

6. Not Diversifying Your Portfolio – don’t put all your eggs in one basket. Diversification is a way to avoid overexposure and having a portfolio made up of properties in different locations helps protect you against volatility and land tax implications. Also different areas grow at different times, depending on where they are in the property cycle. Savvy investors understand to follow the boom and buy in a market which has seen a little growth and ride out the boom. Do not buy at the top as you pay too much. As an example, you wouldn’t buy in Sydney today because they’ve had substantial growth and are now coming off the boil.

7. Remember The Tax – since the 2017 Federal Budget, the denial of capital allowances (depreciation) on second-hand plant & equipment in investment properties, has significantly affected the desirability of established properties. Understanding the deductible amounts on a property helps you understand the full cash flow picture and often when comparing the numbers newly built properties far outweigh the benefits of buying old.

The Bottom Line

If you have the money to invest and remember to avoid these common beginner mistakes you will have more chance of being successful in your property endeavours. Getting a good return on your investment is key to getting you closer to your financial goals.

Data from RP Data and the Census Data from 2011 show that 7.9% of Australians or 1,764,924 people owned an investment property. The numbers are growing as more and more Aussies are realising that retiring on the pension and surviving, rather than thriving is not a way to live life. Why struggle when you can create something for yourself which will allow you to have choices?

Here at CPG we encourage clients to create a small property portfolio for themselves so they can make decisions later in life based on whether they’d like to do something rather than if they can afford to do something.

We’d love to help you get a better understanding of what things you should avoid when considering purchasing an investment property. Together we can take the steps to help you achieve success. Get in touch today.

Read More:

What 95% of property investors get wrong – http://curtispropertygroup.com.au/95-property-investors-get-wrong/

What does the perfect investment property look like – http://curtispropertygroup.com.au/what-does-the-perfect-investment-property-look-like/

Why now is a good time to invest in property – http://curtispropertygroup.com.au/why-now-is-a-good-time-to-invest-in-property/

Follow us: Curtis Property Group on Facebook

Do you know how to master the inner game of wealth? What should you be reading to increase your knowledge and wisdom?

No matter where you are on your financial journey you need to know it is possible to turn your financial life around.  Making small changes in your life can fatten your savings, help you budget better and achieve greater success financially.

Research shows that 85% of wealthy people read two or more education, career-related, or self-improvement books per month.

Here, we’ve highlighted some of the best books about managing your money and achieving wealth out there, from expert-recommended classics to some of our favourites:

1.Think And Grow Rich, Napoleon Hill

One of the most popular books to read when it comes to money. Written in 1937, Think and Grow Rich teaches the thirteen steps to riches. Those thirteen steps, Napoleon claimed, were the secret to building wealth.

This is the end product of two decades of research conducted by Napoleon Hill. His research started when Andrew Carnegie (the steel tycoon who was then the richest man on earth) gave him the assignment of organising a Philosophy of Personal Achievement.

Hill, who was a poor journalist, armed with just an introductory letter from Carnegie, set out to interview over five hundred successful people including Henry Ford, Thomas Edison, Alexander Graham Bell, John D. Rockefeller, George Eastman, William Wrigley Jr. and Charles M. Schwab.

Hill then revealed the priceless wisdom of his research in the form of the thirteen steps to success (in Think and Grow Rich) and the seventeen principles of success (in courses and lectures he conducted). Some of these include developing a definite purpose, building a Positive Mental Attitude (PMA), channelling the power of the sub-conscious mind and dealing with adversity.

Everything he wrote about or talked about is thought provoking. He was wise, humble and funny. His philosophy is universal; he did not mix it with religion. The riches he referred to were more than money, for the Philosophy of Personal Achievement can be applied to anything in life. Hill was well ahead of his time. This book has a chapter dedicated to some of today’s most important issues – Specialized Knowledge, Decision Making, Imagination and Organised Planning (in which he deals with Leadership).

We highly recommend reading this book and would love to hear your thoughts on it.

2.The Science Of Getting Rich, Wallace Wattles

The inspiration behind Rhonda Byrne’s bestselling book and movie, The Secret. Wallace Wattles concisely shows how to use the power of thought and willpower on the way to getting rich.

Wattles shows that by focusing only on what your heart desires and believing unconditionally that those things are yours to have, you connect to the Universe which gave you those desires in the first place and intends for you to fulfil them.

His philosophy is at the essence of how we can attain real fulfilment and inner-peace doing what we love. This book will show you exactly how to control your thoughts so you can have the success you were created for.

The text is divided into 17 short, straight-to-the-point chapters that explain how to overcome mental barriers, and how creation, rather than competition, is the hidden key to wealth attraction.

Get your FREE copy HERE.

3.The One Minute Millionaire, Mark Victor Hansen

A New York Times bestseller, the mastermind behind the 65-million-copy Chicken Soup series, and Robert G. Allen, a pioneer in bestselling wealth-creation books, share their revolutionary approach to building wealth and present a powerful program for self-discovery.  

The lessons in The One Minute Millionaire are not just about becoming a millionaire – they are about how to ethically make, keep, and share your wealth. Whether your goal is less than a million dollars or that amount many times over, there’s never been a better time to achieve abundance. In these turbulent times, these lessons will show you how to recover from financial loss and rebound with renewed enthusiasm into financial security and prosperity.

The One Minute Millionaire will show you how to create wealth even when you have nothing to start with, use the power of leverage to build wealth rapidly, overcome fears so that you can take reasonable risks and use “one minute” habits to build wealth over the long term. 

4.Rich Dad Poor Dad, Robert Kiyosaki

Kiyosaki shatters the myth that you need to earn a lot of money to get rich in this best-seller. By telling the story of two dads — his own, and the father of his best friend — he explains how to build wealth even with a small salary.

Additionally, Kiyosaki challenges the popular belief that your house is an asset, details the differences between how rich people and average people choose to get paid, and emphasises the critical difference between an asset and a liability.   

5.The Millionaire Next Door, Thomas J. Stanley and William D. Danko

Many people ask this question of themselves all the time. Often they are hard-working, well-educated middle- to high-income people. Why, then, are so few affluent?

For nearly two decades the answer has been found in the bestselling The Millionaire Next Door: The Surprising Secrets of America’s Wealthy. According to the authors, most people have it all wrong about how you become wealthy.

Wealth is more often the result of hard work, diligent savings, and living below your means than it is about inheritance, advance degrees, and even intelligence.

The Millionaire Next Door identifies seven common traits that show up again and again among those who have accumulated wealth. You will learn, for example, that millionaires bargain shop for used cars, pay a tiny fraction of their wealth in income tax, raise children who are often unaware of their family’s wealth until they are adults, and, above all, reject the big-spending lifestyles most of us associate with rich people.

In fact, you will learn that the flashy millionaires glamorised in the media represent only a tiny minority of America’s rich. Most of the truly wealthy in this country don’t live in Beverly Hills or on Park Avenue-they live next door.

It is well known that people who make consistent progress towards educating themselves live a happier life than those that don’t.  So, what are you waiting for?

What Else To Read?

We also share a lot of knowledge on our CPG blog, where you can find property investment related education. Find them Here.  If you don’t want to miss out on future blogs simply register for our mail list where you’ll get them directly in to your inbox.

Have you been researching property for some time but are yet to actually purchase one? Do you wish you had weekend plans that don’t include traipsing around auctions and attending open homes?

Deciding where to invest will depend on your individual goals, the amount of money you have to spend, and what property/s you might already have in your portfolio.

Before we get started helping our clients purchase property we like to sit down with them to get a good understanding of what they are trying to achieve. A personal risk analysis is conducted which equips us to provide them with the very best advice, based on their specific situation. 

When setting financial wealth goals you always start with the end in mind and work backwards to your current position. Do you want to pay off your own home in the next 5-10 years? Generate a passive income of $100,000 p/y in retirement? Be able to provide a good education for your kids? Maybe you just want to maintain your current lifestyle and continue having choices in life…

We understand the challenges you may be facing and share our three top ways to spot a great investment property.

Three Ways To Spot A Great Investment Property

 1. Follow Property Cycles

Picking the right real estate market is incredibly important and it’s not wise to buy in an area that has been on the list of ‘hot spot’ areas for a few years already.

If you invest in a rising property market in the early stages you will benefit from the growth.

Savvy investors know that Brisbane is a great place to invest today as it is on its way up. Whereas Sydney has already experienced high levels of growth and we don’t know how much longer Melbourne will continue to be on the rise.

Steer clear of small boom towns and head to cities because they offer the best long-term prospects. However, it’s not just any old property in a city that will do. 

To provide the highest level of return there are many factors which must be taken in to consideration and when working with our acquisition team they choose stock strategically and in line with a very strict criteria, which we have built on and perfected over the years.

2. Stick With The Big Cities

Capital cities tend to have more infrastructure, a greater number of jobs and a higher population. This equates to a significantly higher rental demand than in other areas, resulting in lower vacancy rates.

We find that this is one of the most common concerns which our team hears from those wanting to invest – what happens if our property doesn’t rent?  Investing in the ‘right’ areas will reduce the risk of having an investment property sitting empty. But, where to buy?

3. Diversification Is Paramount

Our clients’ portfolios will consist of properties in different areas and even different states. Markets grow at different times so if you have a property in each of the major capital cities you should have good capital growth overall, year on year. This strategy will also help you avoid land tax, which if not done right can impact your bottom line.

The list of important criteria can (and does) make a long list of research points, which can be stressful for some. Over many years of working in the property investment space we have created a detailed list of criteria that each and every one of our properties must meet. This ensures a positive result for our clients – we do the hard work and our clients enjoy the success.

If You Would Like To Learn More

If you’d like to know more about the kind of research that we do on your behalf, we’d be happy to talk it through with you in person when you are ready to start investing in property. We can be contacted on 08 6323 2306 or info@curtispropertygroup.com.au