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POSITIVEMAGAZINE
TO GET STARTED GO TO:www.positiverealestate.com.au/lmp
REDUCE YOUR TAXES
HOW TO SPOT A HOTSPOT
Save your salary with these simple tips
We reveal expert hotspotting tips so you can buy before the BOOM!
GOODBYEHow property can create a passive income and help you retire sooner!
December 2014www.positiverealestate.com.au
KISS YOUR JOB
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KISS YOU JOB GOODBYE
MEET PAUL & ANA
CONTENTS
How property can create a passive income and help you retire sooner!
This average couple are able to purchase a $1.5 million property portfolio in just two years. Discover how!
4 HOW MUCH DO YOU REALLY KNOW ABOUT INVESTING
Take this quiz and find out
6 HOW TO SPOT A HOT SPOTWe’ll show you how to be smart about this
8 PAY YOUR HOME OFF FASTWouldn’t it be better to keep those interest payments in your back pocket? We tel you how to do it!
10 REDUCE YOUR TAXES LEGALLY So you want to reduce your taxes? Take advantage of the many legal methods of reducing your tax!
11 BIANCA & MATTHEW STORYLearn how they bought 4 properties in 5 months and only paid $1000 income tax!.
13 SMSF CLUB Read about the first place many investors stop when looking for finance information and assistance.
14 GIVING BACKWe’re proud to have contributed more than $324,000 to Room to Read’s school construction programs.
16 LIFETIME MENTORINGThe 6 reasons why the Lifetime Mentoring Program delivers results
18 OUR CLIENTSReal life results
21 THE SMSF CLUBRetirement can be scary without the right plan.
22 OUR CLIENTS IN THE MEDIA
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Brochure provided by Positive Real Estate, Corporate Licence 1217226. Please view our legals and licenses on www.positiverealestate.com.au *Conditions apply, please refer to the website for more information. These scenarios do not take into account your personal circumstances, for more information on these results see the website. All information is of a general nature only and does not constitute professional advice. Please seek advice from licensed professionals about your personal situation. This information is subject to the disclaimer on www.positiverealestate.com.au/disclaimer
POSITIVEMAGAZINE
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POSITIVE MAGAZINE EDITORIAL
HIINVESTORS, There’s nothing more
satisfying than looking back over the past twelve
years and seeing the real profits created by over 4000 of our investors. It’s a sensational feeling when I look back at deals we sold just a few years ago and see how much those properties are worth today. Positive Real Estate is now one of the leading property investment companies in Australia. We’re helping thousands of everyday Aussies get fantastic results from property investing.
Our service delivers trusted meetings with property and finance professionals to produce profitable solutions. An investor can sit down one on one with our team members and utilise all of our four services (Property Coaching, Real Estate opportunities, Finance, and SMSF) in a single appointment. Our teams dramatically change people’s lives because they work in absolute harmony!
All our properties are sourced by our Investor Agency, which is run by the Acquisitions Team. We source the best properties available and offer access to markets that would never be
identified through traditional residential real estate firms. The Investor Agency is always on the pulse of the best areas, market trends and ideas.
Our teams of property experts are called upon by reputable industry media publications to provide unbiased advice, cutting edge commentary and educational content. We are nationally recognised for unveiling crucial hotspot locations before the crowds move in.
At Positive Real Estate, we know that education and surrounding yourself with a team of experienced investors is the key that unlocks the door to financial freedom.
Take a read through the pages of this magazine and you will find numerous stories of our clients, every day people like you and me, who have achieved extraordinary results through property.
You will also discover practical tips and strategies that will safely take your property portfolio to the next level while bypassing some of the most common investor mistakes. I hope this helps you on your property investment journey.
SAM SAGGERSCEO Positive Real Estate
Happy investing and I look forward to seeing you at one of our future events.
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HOW MUCH DO YOU REALLY KNOW
ABOUT INVESTING?
INSTRUCTIONSMark your answers then
see the Quiz Scoring Guide (next page) to see
your results.
POSITIVE MAGAZINE QUIZ
QUESTIONS1. WHAT CAN A GOOD PROPERTY MANAGER DO FOR YOU?
a) find a good tenant
b) spot maintenance issues
c) give advice for getting
better rents
d) all of the above
2. WHAT CAN INVESTORS DO TO REDUCE THEIR TAX?
a) claim depreciation
b) file a PAYG variation
c) declare a tax strike and
not pay their taxes
d) both a and b
3. GAZUMPING IS ENCOURAGED BY A
a) hot market
b) flat market
c) reduction in sales
d) busy mortgage broker
4. WHAT IS AN OFF THE PLAN DEVELOPMENT?
a) an infrastructure project
in the CBD
b) a DIY project
c) a development which
hasn’t been built yet
d) both a and c
5. WHERE DO YOU START SEARCHING FOR GOOD INVESTMENT PROPERTIES?
a) look for the 6 “Ds”
b) newspapers
c) real estate agents
d) all of the above
6. WHAT IS “BUYING POWER”?
a) how much the banks will
lend you
b) how far your equity will
go towards costs
c) the ability to get
financing
d) a bank’s internal fee
calculator
7. HOW DO YOU DETERMINE YOUR GROSS YIELD?
a) purchase price plus
broker’s commission/100
b) annual rent/purchase
price x 100
c) purchase price/annual
rent x 100
d) an average of the
suburb’s yields
8. WHAT VERBIAGE IN A MORTGAGE CAN STOP YOU FROM BUYING MORE PROPERTIES?
a) all monies clause
b) mortgage insurance
clause
c) late fee clause
d) both b and c
9. WHAT TYPE OF PROPERTY WOULD WORK BEST WITH STRATA TITLING?
a) duplex
b) house and land
c) two level home
d) both a and c
10. WHICH TENANCY WILL NOT GIVE YOU RIGHTS OF SURVIVORSHIP?
a) tenants in common
b) joint tenants
c) tenancy by the entirety
d) both b and c
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POSITIVE MAGAZINE QUIZ
QUIZ SCORING GUIDE
”EXPERT INVESTOR”10 POINTS
Wow look at you - you’ve
got this in the bag! You’ve
got what it takes to really
succeed at investing, but
why don’t we kick it up a
notch? Have you tried your
hand at more advanced
strategies such as strata
or a small development?
What about investing
through a joint venture?
There are countless ways
expert investors can boost
their portfolios significantly
and to keep what they’ve
worked so hard to gain.
Let our coaches give you
an edge in the marketplace
by showing you tips and
strategies you can use to not
only grow as an investor, but
to preserve your wealth both
now and into the future.
Find out more about our Mentoring Program on page X
ANSWERS (DON’T PEEK IF YOU HAVE NOT TAKEN THE QUIZ YET)
Question 1 (d), question 2 (d), question 3 (a), qustion 4 (c), question 5 (d), question 6 (b), question 7 (b), question 8 (a), question 9 (a), question 10 (a).
“SEASONED INVESTOR”7 - 9 POINTS
Amazing - you’re really on
fire! You understand how to
spot a growth market but do
you know how to succeed in
property investing no matter
what the market is doing?
Our mentoring program can
help you do just that. When
you sit down with your
mentor you will go over the
goals you’ve set for yourself
- or perhaps set some new
goals and then begin to
execute your plans.
Got a question? How about
an idea? Want an opinion
about a certain market?
Your coach is just an email,
SMS, phone call or coffee
shop meeting away!
Find out more about our
Mentoring Program on page X
“AVERAGE INVESTOR”4 - 6 POINTS
Fantastic score! You’re
moving quickly towards
financial independence and
you know that education is
key to achieving your goals.
Rather than go it alone,
however, why not enlist the
aid of others who have been
where you’re at now?
A mentor can help you
stretch yourself beyond your
comfort zone where you can
achieve much more than you
may have thought possible!
Find out more about our
Mentoring Program on page X
“BEGINNER/NEWBIE INVESTOR”1 - 4 POINTS
Congratulations! After
attending tonight’s seminar
you’re already well ahead of
other beginning investors.
Why not continue your great
start by taking advantage
of our mentoring program?
You’ll gain access to a world
of information vital to your
success.
You’ll also grow as an
investor as you learn tips and
strategies from successful
property coaches who will
work with you every step of
the way as you create wealth
through property investing.
Find out more about our
Mentoring Program on page X
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Look at what local investors
are doing. Are they buying in
their own backyard or are they
avoiding their local area - even
if it’s showing promising signs
of growth?
It’s not uncommon for local
investors to shun their own
location until they begin to
see out of state investors
move into the area.
2. IS THERE A RIPPLE EFFECT HAPPENING?Look at nearby locations. Are
they growing? Compare the
suburb you’re considering to
those nearby that are actively
growing.
If the suburbs are comparable
in terms of the market drivers,
amenities, then you can
expect your subdivision
may grow as well.
3. WHERE IS THE CURRENT MARKET SENTIMENT?
Let’s be smart about this. To achieve the most gain from a property hotspot you want to buy when few others are aware of the opportunity.
If everyone knows their property is in a “hotspot” location, you will pay more!
So how do you spot a
hotspot?
By studying the factors that
influence the market.
At its root, all of the market
drivers (infrastructure, popula-
tion, economics, demographics,
supply and demand and suburb
yield) are the result of people
and their actions.
1. WHAT ARE INCOMES LIKE IN THE AREA?Are incomes rising? One clue is
to look for growth in industries
that typically pay more, such as
tech, mining or medical.
Compare incomes to current
property prices. Can the salaries
support rent and/or property
value increases? In other words,
is the market equitable?
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4. WHAT ABOUT THE MARKET DRIVERS?
POPULATION
Is the population growing?
Can the existing supply of
properties meet the demand?
How much land is available
for release? This factor can
have a big impact on property
values. Sydney, for example,
is constrained from greatly
expanding outward by its
mere geographical location.
INFRASTRUCTURE
Are there large infrastructure
spending projects either
planned or in the works?
For example: new hospitals,
universities, road works, public
transport or shopping?
Contact either the economic
development manager or town
planner of the local council for
this information.
ECONOMICS
Is there a diverse employer
base? Don’t invest in locations
with a single industry employer
- choose suburbs with a wide
variety of industries.
SUPPLY AND DEMAND
Is the population putting
pressure on the local supply
of property? The vacancy
rate for the suburb will give
you a good indication of
both demand and supply
for the area.
SUBURB YIELDS
What are the rental returns?
If they’re increasing then you
have a shortage of supply in
the area and a subsequently
increasing demand for more
accommodations.
DEMOGRAPHICS
Can the incomes of the local
residents afford the rents and
is there room for growth?
Are the majority of individuals
in their prime working age or
are they nearing retirement?
5. STUDY DIFFERENT GENERATIONS - WHAT THEY WANT AND WHERE THEY WANT TO LIVE.Look for signs that growth is
happening. Is the population
growing and if so, what is the
majority of the demographic?
For example, individuals
born between 1980 to 2000
- Generation Y - are typically
attracted by apartments situated
in an active location such as the
CBD or nearby suburbs.
This can also help you target
the right property type once
you’ve found a potential
hotspot.
6. STUDY THE FAMILY MAKEUP OF THE DEMOGRAPHIC.Are the majority of individuals
living in the suburb either
established families, young
professionals - couples or
singles - or retirees? What
does the demographic want in
a home? Do they want to live
near every conceivable amenity
or do they want to spread out,
willing to embrace a longer
commute as a trade-off?
7. WHERE DOES IT LIE IN THE PROPERTY CYCLE?Where in the property cycle
is the suburb? For example,
if sentiment is low, even
though the suburb has seen
an increase in yields of at least
1% to 2% over the previous
5-year average, it’s possible the
market is leaving the bottom,
heading upwards.
If the market is anywhere
from 10 to 12 o’clock you’ll
see everyone talking about
the market, and it is generally
agreed it is a “hotspot”.
Ideally you would have
purchased earlier, when
sentiment was still very low/
non-existent, but you still may
find some good deals if you
search hard and choose the
right strategy. Be certain you
have a viable exit strategy
already in place to avoid getting
burned when the market cycle
starts to shift downward.
POSITIVE MAGAZINE HOW TO SPOT A HOT SPOT
Propertyclock
At Positive Real Estate, we’re dedicated to bringing our clients the best possible deals in markets that are poised for capital growth - markets which we ourselves buy in personally as property investors.
To discover the great opportunities we’ve found across the country, have a chat with your Property Coach tonight.
If you prefer, our Investors Agency can be
reached at 1300 365 886 or alternatively by
email at [email protected].
We look forward to speaking with you soon!
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Sounds crazy, doesn’t it? It may sound nuts, but with some clever strategies and strong financial discipline under your belt, you certainly can pay your home loan off faster than you may have thought possible!
Look at the following example of interest paid for a $300,000 mortgage:
As Graph A shows, if you pay off this mortgage with a rate of 6.85% over the full 25-year term, you will be paying $718,000.00 - more than double the initial loan amount!That’s $327,516 just in interest repayments! Save $212,302.80 by paying your home off in 10 years instead of 25, the huge saving is illustrated in Graph B.
PAY YOUR HOME OFF
FAST
Don’t want to be paying off your home for the next 10, 20 or 30 years?
What if you could reduce your home loan faster?
Over the full 25-year term, you will be paying more than double the initial loan amount!
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Here’s how you do it:
MANAGE YOUR MONEYBUDGET YOUR FINANCESNo discussion about finance can leave out the topic of budgeting. If you don’t have a plan for your money it will find a way to simply vanish from sight... and quickly!
CUT EXPENSESGive yourself an immediate pay raise by cutting expenses and use the savings towards paying off your home loan. Eliminate “extras” like pay TV (stream movies or watch DVDs instead), switch to a cheaper data/cell plan, etc.
BE CREATIVE Remember that every dollar counts! Add up what you’ve spent this last month on “treats” and you’ll see what I mean!
SWITCH TO WEEKLY/FORTNIGHTLY REPAYMENTSPay your mortgage weekly or fortnightly rather than monthly. As mortgage interest is calculated on a daily basis you’ll pay less interest and the money that would have gone to interest go to reducing your principal and paying your loan off sooner!
MAKE EXTRA REPAYMENTSThe more payments you make towards the principal the faster you can pay down your loan. Easily and efficiently reduce your loan by using the redraw or offset facility tied to your loan to manage the extra payments.
ALIGN YOUR SALARY AND HOME LOAN REPAYMENTSDespite our best intentions, money often has a way of slipping through our fingers. Avoid the risk of spending your extra repayments and set up your loan repayment period to match your salary payment date. This will maximise the amount you have available to pay towards your home loan.
PUT YOUR SALARY INTO AN OFFSET ACCOUNTHave your salary put straight into your offset account!
If you don’t already have one, speak with your financial advisor about getting one. As an “all-in-one loan account” you can pay your salary directly against your loan, which reduces the principal and subsequently the interest that is charged against it.
Remember... a lower principal balance results in less interest charged - and a faster payoff!
PAY INTEREST ONLYYes, interest only... you’ll soon see why!So let’s say you pay $2,000 per month on your mortgage. Have your advisor structure the mortgage so that $1700 of that payment goes towards your mortgage interest and the $300 sits there in your redraw or offset account.
How does this help you?The money sitting in your account will be earning interest, reducing the balance of your loan because it “offsets” your mortgage balance. But this is not all...you can add more money to your account, further shrinking your loan!
BE CONSISTENTWhen interest rates fall keep your repayments the same. This is a simple way to slash your debt!
We’re not done yet. This is where we get to the part about paying off your mortgage.
BUY INVESTMENT PROPERTIESDon’t turn the page! This works, honest... hundreds of our clients have done this very thing! Using some of the equity in your home, purchase some investment property(ies). Pop the rent into your offset account and boom - down goes your loan balance!
Claim your tax benefits weekly, fortnightly, however you wish and put those monies into your account - after all, why should the ATO have benefit of your money all year?
If any extra money falls into your lap, then toss it into your offset account.You don’t have to wait until you have your entire mortgage amount in your offset account. Make a partial payment with the funds from your offset, further shrinking the principal and interest!
Increase your returns by adding value to your investment properties through renovation and/or subdivision, strata, etc. When the timing is right sell one or more investments and use the funds to pay your home loan down (or off).
Each of these strategies works well by themselves, but when you combine them all you really supercharge your loan payoff!
Book a COMPLIMENTARY CONSULTATION with your Coach now and find out how having the right property investments can build your wealth and pay your home off in record time!
POSITIVE MAGAZINE PAY YOUR HOME OFF FAST
BELOWRemember to book your complimentary consultation with our expert team
PAY YOUR HOME OFF
www.positiverealestate.com.au/lmp
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Property investors have many deductions they can claim to reduce their tax liability. Following are just some of those deductions:
INTEREST AND BORROWING EXPENSESExpenses surrounding your investment property purchases such as interest payments and accounting fees can be claimed, reducing the tax you owe.
REPAIRS AND MAINTENANCE Maintenance and repairs of your investment property can be deducted as long as they were incurred as a result of leasing the property.
AGENT AND BODY CORPORATE FEESTenant advertising costs as well as a property agent’s fees and commissions can be deducted from your tax liability. So too can body corporate fees. INSURANCEInsurance costs covering your investment property’s contents, the structure itself and public liability insurance costs can all be deducted from your tax bill. RATESCouncil and water rates can be claimed on your tax return too.
TRAVEL EXPENSESTravel costs associated with inspecting and/or maintaining your investment properties are deductible from your taxes.
Whether you travel by air or by car you can deduct your expenses - and if your proper-ty is in another state and you have to stay overnight you can deduct your meals and hotel fees as well.
DEPRECIATION SCHEDULEWe all experience wear and tear as we get older - so do our investment properties! Hire a quantity surveyor to do a depreciation schedule for your properties. The schedule puts a dollar amount on that wear and tear - often totalling in the thou-sands! You won’t likely have this expense every year (unless you do major improvements) as the schedules are good for about 20 years on average.
There are two types of depre-ciation: capital works and plant and equipment. Capital Works DeductionsAn example of a capital works deduction would be the build-ing costs of the original struc-ture as well as improvements. Note that even though you cannot claim capital works on properties built prior to 1985, you can still claim plant and equipment depreciation. Plant and Equipment DeductionsThis covers household items such as AC units, blinds, carpeting, etc.
PAYG VARIATIONIf you’re a PAYG earner, file a PAYG variation with your
employer. When you file the variation, your employer will take out less tax, leaving you with more each pay day which you can use to fund an investment property purchase, add to your buffers, pay off an existing mortgage, go on holiday... whatever you choose.
INVESTMENT PROPERTIESYes, owning investment properties can help you slash your tax bill. Amazing, isn’t it? Take a look at the following graphic. Looks like Adam has some catching up to do, right?
So you want to reduce your taxes? Who doesn’t? But rather than sport a new pair of metal bracelets (courtesy of the ATO) take advantage of the many legal methods of reducing your tax!
REDUCE YOUR TAXES LEGALLY!
NOTEAll tax calculations done by a CPA accountant.
As you can see, the expenses surrounding Eve’s investment properties significantly reduced her tax liability.
Combine the tax cutting strategy with any capital growth her portfolio might have gained and she’s well on her way to financial freedom.
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POSITIVE MAGAZINE BIANCA & MATTHEW’S STORY
HOW BIANCA AND MATTHEW BOUGHT 4 PROPERTIES IN 5 MONTHS AND ONLY PAID $1000 INCOME TAX!On a combined income of just $80,000p.a., Bianca and Matthew overcame their fear of debt and now hold a property portfolio worth almost $2 million!
They bought their first home at the tender age of 18 and had paid the $150,000 home loan off within five years. “I thought I would feel different after having no mortgage but I didn’t.” Bianca explained. “We still have to go to work every day.” Frustrated, and not wanting to work full-time for the rest of her life, Bianca looked into investing in property and shares. In 2011, Bianca and Matthew made the decision to purchase an investment property in Devonport, Tasmania. It didn’t perform as well as they’d hoped. With two properties in Tasmania, Bianca realised she needed to diversify her investments. She wanted to invest in other states of Australia but had no idea where to begin. One night, while at her mother-in-law’s house, Bianca stumbled across an article in the newspaper about a free Property Investor Night in her local town. The event was the following night.
“It was like it was meant to be!” Bianca exclaimed. She and Matthew signed up right away, and turned up eager to learn how property could provide an extra income.
The free Property Investor Night revealed one thing: “We needed to educate ourselves.” Bianca said. “There was more to it than just buying any old property.” They joined the Lifetime Mentoring Program, and armed with their new education, set out on their mission to create an income with property and reduce their working hours. With the equity for their first home, Bianca and Matthew bought four properties in just five months – on a combined income of $80,000 per year.With a promising portfolio in such a short amount of time, Bianca has taken a step back to pay down their loans, so they can comfortably invest again further down the track. “You need to look at your portfolio regularly, as things change, and your strategy may need to change.”
TAX REDUCTION“Reducing tax was one of our goals but not a main focus,” Bianca said. “We don’t pay much tax, but we are not complaining that we get most of it back!”Last financial year, Bianca and Matthew earned $127,000 (salaries and rental income combined) and only paid $1000 in tax – completely legally.
“Our first property, Bunbury, was 40 years old but had been renovated so there was still some depreciation to claim.” Bianca explained. “Toowoomba, being a newly built house and land package, also had great depreciation benefits.” With such great returns from their tax, Bianca and Matthew are able to pay down their loans so they can move forward with their investment journey. “Yes, sounds very boring, I know.” Bianca states. “But I am very focused on achieving our goals.” Bianca and Matthew have achieved so much in a short period, and are well on their way to being able to scale back from their jobs and achieve their dreams of working part-time – maybe even retiring altogether. “We couldn’t have achieved this without the support of Positive Real Estate - especially when I hate debt and it was terrifying to take on so much! You just keep reminding yourself of the end goal and keep educating yourself.”
Find out how you can start to take proactive steps towards paying less tax and investing your money directly into your property portfolio. It doesn’t take a lot to get started - just an interest in changing your future. Take the first step by booking in a complimentary one on one appointment with an expert Coach in your area, where you will learn smart money management strategies, which can help you, among other things, cut your taxes.
GO TO: www.positiverealestate.com.au/lmp/
Location Purchase Price Current Value Rent
Spreyton, TAS $264,000 $430,000 PPOR
Devonport, TAS $150,000 $220,000 $250pw
Bunbury, WA $225,000 $240,0000 $285pw
Toowoomba, QLD $399,750 $440,000 $400pw
Newcastle, NSW $315,950 TBA Under construction
Teneriffe, QLD $424,000 est. 480k - 520k Under construction
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INVESTING POSITIVE MAGAZINE
Paul is 42 years of age and Anna is 38. They have 2 kids under the age of 10 and live in Western Sydney.
Their financial situation looks like the following:
PaulEmployed full time earning $81,000 PA
AnnaEmployed part time earning $30,000 PA
CURRENT ASSETSPPOR in Western Sydney valued at $590,000 with a current mortgage of $285,000.
Investment Properties: 0.Savings: $8000 in the bank and depositing $500 extra each monthSuperannuation: Combined balance of $150,000
CURRENT LIABILITIESPersonal Loans: $38,000 for 2 carsCredit Cards: 2 with a combined limit of $15,000, completely paid off each month.
PAUL AND ANNA’S GOALS:1. Paul and Anna don’t want to rely on their superannuation for their retirement, as it wasn’t performing the way they needed it to.2. Paul does not enjoy his job and doesn’t want to have to work until 70. He would like to create a passive income within 11 years, when his kids finish school. Paul will then be 53 years old.3. They are paying the maximum amount of tax at this point and want to reduce this with legal deductions.4. Anna wants to eliminate the debt on their home over the next 7-10 years.5. They want to take an annual overseas family holiday for 2 weeks.
6. They are concerned how their two children are going to get into the property market when they hit their 20s and want to assist them with their first property purchase.
Paul and Anna’s buying power was $1.1million and serviceability was $1.2 million meaning we could move forward on a relatively balanced strategy.Based on Paul and Anna’s goals and financial information, the following properties would make great foundational properties for their investment portfolio.
YEAR ONEPROPERTY ONE:Location: Liverpool Sydney
• 3 Bed, 2 Bath, 2 Car• $412,000pp May 2014• Recent sales in the building
for similar product up to $495,000
• 5.5% gross rental• Estimated $40k equity gain
in under 6 months
HOW TO START OUT INVESTINGIf you want to get started investing, you need a plan. To make a plan, you need to set goals.
Meet Paul and Anna*
GOAL #1 Replace Paul’s current income with a passive income of $81,000. Deadline: 11 years.
GOAL #2 Create $15,000 per annum in savings/profit to take a holiday. Deadline: immediately
GOAL #3Reduce debt of $285,000. Deadline: 7-10 years.
GOAL #4Eliminate tax. Deadline: 5 years.
GOAL #5Gift $100,000 to their kids when they turn 21.Deadline: 13 years
SERVICEABILITYThis is the maximum amount a lender is willing to lend you based on your situation, income and expenses.
BUYING POWERThis is the maximum amount of real es-tate you can afford to buy, based on how much cash or equity you have for your deposits.
*Real names have been changed for privacy reasons.
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POSITIVE MAGAZINE FINANCIAL SERVICES
GEORGE NORI, Managing Director of PFS, and his team have helped thousands of Positive Real Estate, SMSF clients and others achieve financial freedom by securing the best possible loan for their individual goals and needs. In addition to the Pay Your Home Loan Off Sooner Program, Positive Financial Services provide the following services: a FREE HOME VALUATIONa FREE FINANCIAL HEALTH CHECK No strings. No commitment. Just information you can use to understand your true financial position. As a client of Positive Financial services you can expect to: SAVE TIMEPFS does all of the financial legwork for you. SAVE MONEYYou pay nothing for the services you get - the lender pays the broker.Avoid any hidden penalties, fees and other charges.Avoid getting a loan that interferes with your buying capacity and hinders your serviceability. GET FINANCING RIGHT FROM THE STARTJust because a deal is cheap, that doesn’t mean it’s the right one for you. A review of your current lifestyle and your wealth creation plans will determine the loan program that will help you to continue growing your property portfolio. HAVE CHOICESPositive Financial Services deals with a diverse number of Lenders, with a wide range of loan programs and features that suit your individual situation.
Book a meeting with a Positive Financial Services representative now!positivefinancialservices.com.au/connect/free-valuation/(02) 8004 2222Credit Representative Number: 388095 AB: 22140317773
POSITIVE FINANCIAL SERVICESAs a fully accredited mortgage brokerage,
Positive Financial Services is the first
place many investors stop when looking
for finance information and assistance.
PROPERTY TWO:Location: Hidden Waters Fletcher (Mirvac Estate)
• Property type - House: 4 Bed, 2 Bath, 2 Car • Purchase date: March 2014• Settlement date/rented date: October 2014 • Price: $475,000• Rental return: $490-$500 (5.4%) • Equity gain estimate: $495,000 ($20,000)
YEAR TWOPROPERTY THREE: Location: North Brisbane
• Dual Income H&L package specialised for maximising investment returns
• Package price $495,000• Combined rental at completion $650pw, which
shows a 6.8% gross return• Positive Cash flow $5,600+ in year 1 after taxation
This portfolio will give Paul and Anna the base portfolio they need to achieve their goals, while still putting aside $15,000 every year for their family holiday.It is possible, and you can do this too. Strategy is everything. Knowledge of the markets, how to do exceptional due diligence, and getting involved with a team to support you will always lead to success.
If you need help setting an individualised strategy, book a meeting with one of our Coaches. They’ll help you set you an investment plan based on your goals and financial position.
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GIVINGBACK
Education is extremely powerful. We often take it for granted that Australian children, regardless of gender, have the right to education.
However, across the globe, 774.5 million people cannot read
and write. This prevents them from voting, checking the labels on medicine bottles, and filling out employment applications. Over 516 million are female. Education is widely acknowledged as the best way to tackle world poverty. Women that complete their high school education earn more, have healthier families and pass along their education to the next generation. Positive Real Estate has partnered with Room to Read with the common belief that World Change Starts with Educated Children. Room to Read is a global organisation dedicated to promoting and enabling education through programs focused on literacy and gender equality in education. They achieve this goal by
establishing schools and libraries, publishing local-language children’s books, training teachers on literacy education and supporting girls to complete secondary school with the life skills necessary to succeed beyond the classroom. Since their partnership began in 2010, Positive Real Estate has contributed more than
$324,000 to Room to Read’s school construction programs, building seven schools and impacting the lives of over 2,000 children, and thousands more as years go by. Imagine a world in which every child has access to an education. Positive Real Estate and Room to Read are doing their best to make this dream a reality, one child at a time.
Positive Real Estate has contributed more than $324,000 to Room to Read’s school construction programs.
POSITIVE MAGAZINE GIVING BACK
7SCHOOLS
$324,000RAISED
2,000KIDS WITH ACCESS TO EDUCATION
SCHOOLS IN LAOS, NEPAL AND SRI LANKA
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6 REASONS WHYTHE LIFETIME MENTORING PROGRAM
DELIVERS RESULTS
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POSITIVE MAGAZINE LIFETIME MENTORING
VISIT: www.positiverealestate.com.au/mentoring
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OUR CLIENTS POSITIVE MAGAZINE
ADAM SMITH We were working to pay our house off with no real direction for our future. We knew we wanted to invest in something but we had heard so many horror stories where people have failed and had to start over again; and never invested again as they were too scared to lose their savings yet again.I’d been looking and reading about Positive Real Estate (PRE) for a few years, we are very sceptical about people ripping you off as it seems to be a common theme our days… but it was soon realised when joining PRE that this wasn’t the case.
Amazingly, our Coach is an absolute gem; she has been and always will be great help and our mentor! She is very supportive especially the way she approaches and works through our ideas/goals. Kerry, along with the PRE team, has changed our lives forever. The main thing has been the confidence and tools we have gained to be able to move forward and feel comfortable about decisions we might make. PRE gives you valuable information about how the property market can be manipulated (legally, of course!) and it gives you confidence.
We have made some good cash flow from one of our past properties after
leasing it for one year. Part of the cash has been put aside for another property in the near future, and the other part purchased our dream car: a 67-fastback mustang. All of this in 18 months!
We are so glad we joined the program, we would not have done or gained what we have today without it.
MARITA AND REX BISHOP We had always wanted to be involved in property but we didn’t have the education or confidence to go ahead with it. It is terrifying to risk all you have worked for when you don’t have the confidence in your ability. We have just about to hit our 50s so if we were going to do something, it had to be now.
We saw an ad for Positive Real Estate (PRE) in the newspaper and decided to have a look. This was the first time it had been explained to us in a way that we could understand and see ourselves being able to achieve. We did some ‘homework’ and researched the company. We joined PRE in July 2012 and have never looked back.
Once we were ready, PRE were there every step of the way to assist with anything you may have needed help
with. They didn’t do all the work for us; they lead us through the procedures and gave us the confidence to get going. After we purchased our first town house in St Marys, NSW, we needed to up our wages, which meant that I had to find a job. I thought that might be a bit hard at 50 but as Rex is a bus driver, I decided if he can do it, I can too. They employed me!! We have since purchased a townhouse in Toowoomba Qld, which was bought through our Super. We are in the final process of buying a townhouse in Balga, WA, and we simply cannot believe that we have a portfolio! Once this property settles, we will be able to access the equity from our first purchase and start looking for another one.
Our lives have changed so much. We are continually educating ourselves about the industry that we are now a part of, and PRE has made it all happen! Without them, we would still be wondering what was going to happen when we retired. We can now feel confident and safe in the knowledge that when we retire, we can enjoy every minute of it (and keep investing). Not bad for a couple of bus drivers from Tassie.
LEFTAdam Smith, his family and his dream car.
OUR CLIENT’SREAL LIFE RESULTS
BELOWMarita and husband Rex Bishop.
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PHIL AND CORRINE The Lifetime Mentoring Program is all about support. You work really closely with your mentor as well as having access to a team of other people put in place by Positive Real Estate (PRE). Your mentor’s there to guide and assist you through the whole “buying a property process”.
The Buyers Agency is another huge benefit of the program. If you don’t want to go out and find properties yourself, your mentor and property consultant will help you find a property to meet your specific strategy. The PRE acquisitions team source a wide range of properties from around Australia. All are very thoroughly researched and only the best are offered to mentoring clients. There’s also the monthly mentoring meetings where you gain lots of information from guest speakers on a whole range of property and finance related topics. It’s also a time to meet with other like-minded investors to share your stories and listen and be encouraged by their stories. We have made some new friends in the process too.
Two years into the program we’ve really only begun our property investing journey but we can now see a secure financial future in retirement – one that doesn’t involve worrying about having too little superannuation or having to rely on a government pension. We’ve also seen the benefits of restructuring our finances and making our money work for us. Yes there’s a lot of work involved but it’s worth the effort when you’re investing in your own future.
ANITA AND GEORGE OZE In early August 2013, I went to a free seminar held by Positive Real Estate in Cronulla. It was here that I met our property investment coach. I felt an instant liking to her and how she explained how the market was in Australia. She did not have the ego and attitude that many presenters I saw before had. She was also genuinely interested and confident in our situation that she could help us move forward in the investing future we wanted. The team is experienced and genuinely helpful to assist with whatever strategy you choose. I worked with one of their experienced brokers Andrew, who found ways to present our financial situation to the banks in a more favourable way. But what I appreciate most is my Coach’s wonderful support, guidance and knowledge to help me learn how to buy property on my own. She would challenge my old way of thinking, point out things I had to check and ask before considering purchasing and praise my efforts. With no family and friends to talk about property investing, her support and friendship has been paramount in my confidence and determination to keep investing. All this was possible, through the guidance and support of our Coach,
a great broker who refinanced our home loan and found us loans with more suitable lenders and a fantastic and dedicated team. We have also, set up a self-managed superannuation fund with The SMSF Club who works together with PRE. We did this with only $50,000, but already looking to increase returns greater than industry funds. We are extremely excited about where the Australian property market is moving at the moment. It doesn’t matter how much money you have to invest, as there is always a good opportunity somewhere. I didn’t understand or know this 12 months ago. George and I are so happy we have made the decisions we have, learnt to spend money more freely to buy what we need and build friendships with a wonderful group of like-minded people.
Phil and Corrine.
BELOWAnita and George Oze.
But what I appreciate most is my Coach’s wonderful support, guidance and knowledge to help me learn how to buy property on my own.
PASSIVE INCOME EQUALS EARLY RETIREMENT
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POSITIVE MAGAZINE PASSIVE INCOME
Would you like to kiss your job goodbye and begin living life on your terms? Passive income is key to an early retirement and property investing can help you get there.
Although the execution can be tricky, the concept is really quite simple. You buy profitable properties, pay them off and then enjoy the passive income they provide.
Here’s an example:John has been buying properties over the last 10 years and now has 6 properties in all, totalling $2.1 million dollars in value. This breaks down to $350,000 each. He owes nothing on these properties, and he receives $140,000 in passive rental income each year!
This isn’t even considering capital growth. The increase in value and subsequent rental increases can push this number even higher!
It may seem insane to say that John purchased 6 properties in 10 years, but it is actually very doable - if you structure your portfolio correctly from the start.
HOW TO GET STARTEDThe plan you’ll need to put in place to retire early is the same one you’d be using to plan a “normal” retirement, you’re just speeding things up a bit!
SET YOUR GOALSBegin by setting your goals. How much will you need to live comfortably for your expected lifespan? Now how are you going to reach that number?
You will need to buy (or create) positive cash flow and capital growth properties. A positive cash flow property puts money into your pocket before tax. All expenses are covered by the rent and there’s still money left over. You can create a positive cash flow property from one negatively geared by using subdivision, cosmetic renovation, paying down your debt or
many other strategies! Capital growth properties and investments that you expect to grow in value – if you turn to page 5 you’ll discover how to find them!
CLEAN UP YOUR FINANCESBefore you can really get started you’ve got to be sure that your finances are in order. To achieve any level of success you’ve got to know your financial situation and optimise it for the best results:
• If you don’t have a budget, make one• Pay off your debts - both good and bad
For tips on how to pay off your home loan (bad debt) faster, see page 8.
Using your paycheck, rental income and tax savings you can grow the balance in your account even faster. COMBINE POSITIVE CASH FLOW AND CAPITAL GROWTH PROPERTIESAll around Australia, rental returns are so high that after interest and outgoing expenses are deducted, there is still surplus cash flow! Investment properties are an excellent source of a second income. Here’s an example: You’ve purchased a $250,000 property that rents for $500 per week. This is a 10% return. If your interest rate is fixed at 5%, you’ll have a surplus yield
of 5% after interest is deducted. This leads to $5,000 in positive cash flow per annum.
If you’re looking at properties in a lower price range, you can use bump-up strategies (such as renovation) to add value and reap similar returns. You may have to purchase ten positive cash flow properties to have an overall cash flow of $50,000.
Alternatively, you could use the equity from your capital growth properties to provide your second income. In a rising market, a $300,000 property can grow an extra $50,000 in 12 to 18 months. For a passive income of $140,000 per year, you’ll need three to five investment properties in markets set to boom. You’ll have to migrate this money every few years (withdrawing the equity to purchase an investment in another rising market) to consistently get these kinds of gains.
We can show you how to replace your income with property by using these strategies and much more.
Want to quit working sooner? Speak with one of our Property Coaches to find out more.
www.positiverealestate.com.au/info/what-can-i-do-now/
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POSITIVE MAGAZINE SMSF
The sad reality is that a $500,000 superannuation nest egg will not provide a comfortable retirement for most Australians. In fact, most of the nation’s super will hardly sustain them for two years! According to the Association of Super Fund Research, a couple will need around $55,000 per annum for a comfortable lifestyle during retirement. This means you will need approximately $500K if you are entitled to the full retirement pension and if you are self-funded, you will need around one million dollars in your super fund to generate this kind of money.
Sound scary? Absolutely! Especially if retirement is only a few years away.
Recently it was found that women aged 55 to 64 years were estimated to have an average superannuation balance of only $54,500, with average male superannuation balances at just $113,200, (source: University of Canberra’s NATSEM unit).. RETIREMENT CAN BE SCARY WITHOUT THE RIGHT PLANThe good news is it is very possible to retire in a position where you can have the savings you need to live, without depending upon a government pension or allowances. How? Property investing. Whether your retirement is two or ten years away, there are some excellent benefits associated with investing in property using your super, which is where we come in. Our specialist team in SMSF planning with property can help you fast track your retirement plan and start investing strategically in property using your super for a secure and wealthy retirement. WHAT ARE THE KEY BENEFITS OF INVESTING IN PROPERTY USING YOUR SMSF; 1. You can borrow up to 80% of the property
value and have the remainder funded from your superannuation.
2. As the laws stand today, you pay zero capital gains tax and ZERO income tax on rent once in retirement.*
3. A clever way to reduce taxes: Pay down your property using your compulsory super contributions and any salary sacrificed funds will potentially only attract a 15% tax rate – instead of up to 46.5%.
4. Fund your next investment property without using any personal income. RISKS OF BUYING PROPERTY USING YOUR SMSF; While a property investment within your SMSF offers many benefits, there are many other factors that you need to consider to determine whether such an investment is appropriate. There are costs associated with buying and holding an investment property, liquidity constraints, and other risks that all need to be identified and considered prior to making the big leap into direct property ownership. 1. The risks of buying property in SMSF are
magnified when entering into any form of borrowing arrangement.
2. While history has shown that property prices appreciate in value overtime, this is not always the case. Property prices do fall in value and real estate is considered as a high growth/ high risk asset class. For this reason, it is critical to employ a team of experts to ensure that direct property is suitable for your circumstances, and to help you identify the key risks associated.
3. Please seek independent advice to determine whether investing in property is suitable for your circumstances.
*certain conditions apply
Contact the SMSF Club expert in your area by booking in a complimentary one-on-one appointment here [email protected]
THE SMSF CLUBThe thought of retirement is often associated with relaxed long days of reading, travelling, time with friends and family, giving back, and a secure and happy life. A reward for all of your hard years of work.
CASE STUDYInvested in 2 Properties in her SMSF in 6 Months
Positive Real Estate client, Susan Flux had dreamed about property for years but had been held back from purchasing by her own fear. At 53 she has finally taken the plunge and has subsequently bought two properties within just six months in her SMSF.
“I was brought up with a strong belief that you pay for everything outright – you have the money and pay for it straight away, rather than borrowing,” she says, explaining that this perspective made the idea of taking on multiple mortgages a difficult one to swallow.Susan today is a changed woman and has reignited her passion in property and belief in herself. She explains, “It’s partly about being able to fund my lifestyle when I can no longer be in an office working for an employer.” And with so many opportunities Australia-wide, she doesn’t see any reason to stop buying just yet.
Disclaimer: The SMSF Club (A.B.N 72 162 328 501) is a Corporate Authorised Representative of RM Capital Pty Ltd (‘RM Capital’) ABN 74 065 412 820, AFS License No 221938. As a Corporate Authorised Representative of RM Capital Pty Ltd, the SMSF Club and its representatives are authorised to provide General Advice only. General advice is advice which is provided without regard to a clients individual objectives, financial situation or needs. It is not specific advice for any particular investor and it is not intended to be passed on or relied upon by any person. Before making any decision about the general advice provided, clients should consider the appropriateness of the general advice presented, having regard to their personal objectives, financial situation and needs.
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NOTES
Start building your property portfolio now! Book a free strategy session with your Coach: www.positiverealestate.com.au/lmp
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Start building your property portfolio now! Book a free strategy session with your Coach: www.positiverealestate.com.au/lmp
