8 reasons why now is the right time to invest in property

You’re already where you are financially – it’s time to understand your options – read the entire article to claim your rebate bonus.

Whatever was important to make sure you did before the interest rates started to rise is now more important: every good strategy you knew you should do, you should do!

Retirement scenarios – which one are you and which one do you want to be?

Situation 2: ‘FINANCIAL FREEDOM‘ – your residential mortgage is paid off, you currently have a $500,000 – $800,000 super balance, you have 1,2 or 3 investment properties with positive cash flow, you’re on track for a retirement nest egg of $2M – $3 million plus (in which case you’re probably clever enough to get another IP because you know how they work 🙂 Well done! I’m guessing if you are reading this, you may well be one of my existing customers very happy with the strategy we helped you with :):) )

Situation 1: ‘TRADITIONAL APPROACH’ – you earn PAYG income, pay your tax, and you pay your home mortgage payments where the bank is allocating a considerable portion of your payment as interest and every time you look at your bank ap, you owe the same amount, your repayments are going up, your super balance is less than $500k, you have a massive retirement gap, you probably have no will, or an outdated will. You are busy doing what you do, but not getting ahead 🙁

The average Australian retires owing $175,000 on their home loan, with super of approximately $500,000 and lives for 30 years. Which means that they will have approximately $9750 a year to live off which is approximately $26 per day.

Question: Why work for 40 years then retire with $26 per day?

 

EIGHT REASONS why now is the right time to invest in new House & Land package

1. To retire you need to clear your home loan and have a ‘nest egg’ equivalent to _____ years of retirement x _____ $ per year. If you want $200 per day you need approximately $2 million Nest Egg at age 65. If you want $300 per day in Retirement, you need approximately $3M Nest Egg. What are your costs of living now (not including your mortgage) because chances are you spend more than $26 per day. Statistically in Australia the easiest & fastest way to build wealth for retirement is new property
2. To pay your home mortgage off faster you need some way of putting more contributions directly to principal repayments and the easiest way to do this is from a positive cash flow new house and land package which will help you pay your residential mortgage off 6, 7, or 8 years faster
3. To increase your net wealth fastest, in an inflationary period, with rising interest-rate’s, you need property that you don’t live in with tenants and the taxman paying your costs of that investment property. And you need that investment property rising in the property market so that it doubles in value as quickly as possible
4. Each ‘right criteria’ new house and land package, in 8-10 years fast tracks you towards ‘Situation 2’ which is a safe retirement and potentially ‘Situation 3’ which is where you are able to do everything you want in retirement (5% of Australians)
5. Each ‘right criteria new house and land package will provide you tax savings from $12k-$16k depreciation claim which is likely to be $5k-$11k off your tax depending on your income. Every cost of having that IP is tax deductible
6. Right now there is a housing shortage and rental property shortage because with higher inflation and rising interest rates fewer people can afford their first home, which means they need to rent. This creates ideal maths for owners of IP, particularly new properties because they demand more rent
7. Without the investment property you are statistically likely to retire with $35-$57 per day as expendable money from your nest egg. Typical maths show the position of the average Australian at retirement and they become completely reliant on a meagre pension
8. Rental income from each IP you own counts to banks as Income, thus helps you to borrow more money. The equity from the increasing value in the new IP is able to be borrowed against. You are creating income replacement and creating a safety net for future periods of salary interruption

Question: How are you going to improve your financial situation in the current economics WITHOUT getting the benefits being described?

 

Simple things you can do right now

• Limit your discretionary spend and reward yourself in other ways – a great idea is to decide to not spend (eg on a meal out) and instead transfer the $75 directly to your home loan. A few of these decisions will feel great and get you ahead on your loan. Of course in an emergency you can redraw but do try not to
• Make sure all your incoming funds and savings are in an offset account against your residential mortgage: this reduces the amount outstanding and the bank can only charge you interest on the outstanding balance
• Pay your bills on a 55 day intertest free credit card, so that the money stays in your offset account longer, having set up an automatic payment of the balance before interest occurs
• With all your rental properties, accept short term leases only from tenants because as the intertest rates rise you can cover your costs by charging incoming tenants more rent. During a lease, there are tighter restrictions on rent increases and you need to stay out of ENCAT
• Make 100% sure that your landlord insurance includes adequate coverage if a tenant fails to pay – good policies provide up to 20 weeks of rent protection. Change your provider if necessary its relatively simple and a good precaution

Why does the Govt offer benefits which help you invest?

Put simply, the government cannot continue to fund the increasing numbers of pensioners and with an ageing population they need to find unique solutions and encourage investors to build new houses, which is why they offer the most benefits for you to do new House & Land packages. With interest rates rising on your residential loan, you need the investment even more! Without the IP you are not likely to achieve a retirement nest egg to save the government having to pay your pension.

 

What is available to you from the Government assistance?

1. You are allowed to pay less stamp duty when purchasing new house and land packages because you can pay it on the land only. If you were buying a finished house or 2nd hand house/unit then you must pay stamp duty (now called transfer duty) on the whole price
2. Builders and investors are supported with new builds by a government Building Insurance Program to make sure that the investor is safe no matter what the fate of the builder. Builders warranty insurance covers the investor
3. Tax savings in the form of considerable depreciation write-offs on new builds are authorised for investors to help investors with tax deductions – legally you can cut your tax by 100%
4. All costs of your investment property are tax-deductible. This includes the interest, the rates, the bins, the landlord insurance payments. All of your costs from the investment property
5. The ATO can authorise your employer to deduct less tax from every one of your pays during the year if your accountant forecasts your year-end tax position and it will be a large refund. this helps your positive cashflow
6. These incentives help investors pay down their residential loans 7 to 8 years faster by having the investment property, which means that once you aren’t paying the bank back you can contribute further towards your nest egg
7. The government enforces and insures 6 or 7 year total structural warranty on all new builds to make this cheaper and safer for investors, so you don’t have to worry about any issues or structural maintenance.
8. They will require inspections and building standards to ensure the quality of the build
9. If your investment is for any reason negatively geared, you can lodge a claim and receive a tax credit

 

Investing in new House & Land is a straight-forward, & proven & a legal strategy

• Even if you’re on a single wage and don’t own property you are fully eligible
• You’re eligible for more than one investment property if you’d like, in fact your first one could increase in value enough in two or three years to provide the equity release for another and so on bullet point this is how people achieve 3,4 or five investment properties in 6,7 or eight years
• If you want automatic rental income
• If you want to pay your home loan down six or seven or eight years faster
• If you want to stop the leakage from your current financial strategies and mortgages
• If you want the real relief and excitement of knowing that you’re advancing rapidly towards a considerable retirement mistake next heading if you don’t do this

… with the right partner and using criteria to choose the right area, Master plan estate, block and build. We can help you to take advantage of this strategy.

IF you DON’T do this

• It can be quite hard to burn your residential mortgage down after paying full tax on all your PAYG income
• Without intending to do so, you delay/lengthen the payout of your residential loan by up to 8 years
• You are statistically likely to not have enough of a nest egg to retire, which may cause you to work longer, after which you may still be short. it is just the likely maths
• You will, naturally, not have the growth in value of the IP to help with your nest egg and retirement

If you are in any way motivated, its best to take a tiny quick action right now because its human nature to get distracted or afraid. It might be months or even years before you are back in the mind space to check out your options.

 

Who can help me?

The simple answer is Geoff! Give him a call on 0409 007 134 because right now is a good time! If you have read to this line, claim your $1000 rebate off any project you go ahead with simply for reading this article. Quote GDK9/11/22

 

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