Property Investment By Kenny Lim SmartProp Realty

Top Australian Investments 4 th Spot is Commercial Real Estate  $0.7 Trillion 4 th Spot is Commercial Real Estate  $0.7 Trillion 3 rd Spot is Listed Stocks  $1.6 Trillion 3 rd Spot is Listed Stocks  $1.6 Trillion 2 nd Spot is Superannuation  $41.8 Trillion 2 nd Spot is Superannuation  $41.8 Trillion Top Australian Investment is Residential Real Estate  $45.7 Trillion Top Australian Investment is Residential Real Estate  $45.7 Trillion Figures from The Courier Mail Figures from The Courier Mail

Why Investment Property? Financial Freedom Financial Freedom Retirement Retirement Pay Down your own home loan Pay Down your own home loan Sick of boring desk job Sick of boring desk job To reduce personal tax To reduce personal tax Build Wealth Build Wealth Pass on to kids Pass on to kids Capital Growth Capital Growth The Love of Properties The Love of Properties All Sorts of Reasons All Sorts of Reasons

Some Basic Facts Land Appreciates Land Appreciates Building Depreciates but you need this to generate income (Rent) Building Depreciates but you need this to generate income (Rent) Capital Growth on Residential Homes Averages about 8% per annum (Price doubles in just over 8 years. To be conservative if growth was 6% per annum it will take just under 11 years to double the price of your investment property) Capital Growth on Residential Homes Averages about 8% per annum (Price doubles in just over 8 years. To be conservative if growth was 6% per annum it will take just under 11 years to double the price of your investment property)

What Is A Good Investment Property? Buy Entry Level Homes Buy Entry Level Homes Cheapest Home on the Best Street Cheapest Home on the Best Street Important Factors On Location:- Important Factors On Location:- –Transport –Schools –Childcare –Employment –Facilities / Amenities Cash Flow Positive Properties Cash Flow Positive Properties

Location Location Location? Buying In Established Estates (Conservative / Short Term Growth) Buying In Established Estates (Conservative / Short Term Growth) –Pay Higher Price –Steady Growth with track record Buying In New Estates (Long Term Growth) Buying In New Estates (Long Term Growth) –Cheaper –No track record on growth –Price could Sky Rocket once all infrastructure is completed

What Do I Need To Start Investing? For People With Own Home For People With Own Home –Draw Equity From Own Home as Down Payment for Investment Property –Part Equity & Part Cash –Cash for Down Payment For those without Own Home For those without Own Home –Save all your money NOW –FHOG –Look for a rich partner

What Else Can I Do To Start Investing In Properties? Self Managed Super Fund Self Managed Super Fund –Please seek professional advice

How Do I Make Negative Gearing Work For Me? Negative Gearing happens when expenditure exceeds income – captured as loss Negative Gearing happens when expenditure exceeds income – captured as loss All such losses can be used to offset taxable income therefore reducing overall tax All such losses can be used to offset taxable income therefore reducing overall tax

What Is A Cash Flow Positive Investment? When the Tenant and savings in tax exceeds the overall expenditure on Investment Property When the Tenant and savings in tax exceeds the overall expenditure on Investment Property –Depreciation on Building –Depreciation of Fixtures –Depreciation of Electrical Appliances

How Much Down Payment? Typically 20% of the price of Property Typically 20% of the price of Property Minimum of 10% but the bank may insist on Mortgage Insurance Minimum of 10% but the bank may insist on Mortgage Insurance

How Do I Grow My Money Through Property Investment Even If I Do Not Have Savings? 1. Acquire Home and Investment Property 2. Sit on Properties & wait for properties to grow in value 3. Revalue properties and get Equity to purchase a second Cash Flow Positive Investment Property 4. Repeat Steps 2 & 3

How Do I Grow My Money Through Property Investment If I Have Regular Savings? 1. Acquire Home and Investment Property 2. Review savings & equity from Home and Investment Property regularly 3. Purchase Second Cash Flow Positive Investment Property 4. Review savings & equity from Home and Investment Properties 5. Purchase Third Cash Flow Positive Investment Property 6. Review and Purchase more Cash Flow Positive Investment Property 7. Just Keep Investing & Prospering

When Is A Good Time To Start? Interest Rate is at an all time low Interest Rate is at an all time low Majority of Suburbs in South East Queensland had gone up by 10% last year Majority of Suburbs in South East Queensland had gone up by 10% last year Yesterday is gone, so I’m guessing it’s probably now? Yesterday is gone, so I’m guessing it’s probably now?

When Do I Stop Investing? Some say when you retire. You sell half the investment properties, cash out and pay off the remaining properties. Live on the rent. Some say when you retire. You sell half the investment properties, cash out and pay off the remaining properties. Live on the rent. I would say never unless you have no choice, you want all your properties to constantly grow and make money for you. I would say never unless you have no choice, you want all your properties to constantly grow and make money for you.

Food For Thought If you had invested $100,000 on a $500,000 Investment Property 12 months ago, your property would have gained 10% in value equivalent to $50,000 in a year and this is 50% returns on your investment compared to 5% if you put your money in a bank.

Thank You Please Enjoy The Rest of the Evening