Size DOES Matter – Regardless of What They Tell You!

Last weekend we were away from home and staying in the city. I have to say that I’m the first to admit to loving the luxurious environment of a 5 star hotel and all that goes with it!!

However, there are times when that’s not the type of accommodation we are after.

These days for lots of our short trips away from home we try to avoid paying through the nose for expensive hotels, shiny lobbies and costly goodies from a bar fridge.

Instead, we will generally find a place close to our needs through www.Airbnb.com.au . If you’ve never checked this site out before – you should  You can get great accommodation deals in loads of locations and at a fraction of the cost of most hotels and motels.  It’s also a great way to increase your income by being a host with your own property (but that’s a post for another time).

airbnb scarboroughThe apartment we booked this time was right on the Scarborough beachfront in Perth. It was a 3 bedroom, 2 bathrooms apartment that a young couple rent. As the male partner is often away with his work, they have decided to rent one of the spare rooms out to folks like us through the Airbnb website. Their rate per night is $100 and for this we had our own private bedroom, bathroom, full use of the kitchen facilities and were provided with some simple breakfast supplies. Bargain I say!

During our stay I couldn’t help but notice how simply (yet tastefully) the apartment was furnished. And in the kitchen cupboards there were just 6 cups, 6 plates, 6 wine glasses – you get the picture.   The whole weekend I kept laughing to myself as I thought of all the accumulated ‘things’ that filled my cupboards at home!

SIZE DOES MATTER…

So here we were, staying in a place that was absolutely perfect for a working young couple. Great location straight across from the beach, spacious, a couple of spare rooms for friends, an office, a hobby room (or room to rent ) and a shared bbq area and swimming pool within the complex.

This lock up and leave environment will mean any free time they have can be spent doing fun things. This is obviously their preference instead of tending to a huge garden, cleaning rooms that never get used or having shelves filled with dust collectors.

When you are trying to choose an investment property, it’s easy to get distracted into looking at properties that you would like to live in; somewhere with lots of space for your ‘things’. But it’s important to remember that young working couples make up a huge portion of the rental market these days and their needs are very different from yours or mine.

It would be a wise move to find an ideal investment property that meets the needs of these type of people. They generally have a large disposable income. They love to be close to amenities like transport, beaches, coffee shops, and restaurants.

Size Does MatterTHE RIGHT SIZE FOR THE RIGHT TENANT

You must match the type of property you buy with the demographic of people living in the area who are going to be your main rental pool.   This apartment close to the beach is a great example. Another example is buying a 1 bedroom 1 bathroom apartment close to universities or hospitals.

Buying a property that meets the needs of the rental population within a close radius will help to ensure you are never without a tenant.   On the other hand, trying to rent out a large house with a spacious garden and sheds could spell disaster if it’s in a location where the population is largely made up of single or young couples.

Even though you may not like the idea of living in a small, simple space – there are many for whom that is just perfect. Some of the best returns on investment can come from small apartments or units.

I’m pleased to say we have three properties in our portfolio that would fit into this category. One is 6km from the centre of Brisbane, one is 7km from the city of Perth and the other one is 6 km from the city of Perth in another direction. All of them have proved to be very profitable for us.

When it comes to investing in property, bigger is not always better. And yes, size does matter!

What about you? Comment below if having a smaller unit or apartment feature is something you would like to have or do have in your property portfolio?

Here’s to your success!

Fay McLean

 

P.S. Check out Airbnb today and see what’s available for when you’re next away from home and want a great place to stay that won’t cost you an arm and a leg 

Stop! Don’t Go Changing Jobs Right Now…

Stop! Don't Go Changing Jobs Right Now.... Getting approved for finance is tough enough without putting major hurdles in front of your application unnecessarily by changing jobs.

If any circumstances change between the date you first submit your finance application and the date of settlement of your loan, then the bank may not look kindly on your application, and in fact in most instances, will decline your application completely.

Trouble is – most people are not aware of this!

CASE STUDY:  CHANGING JOBS AT THE WRONG TIME

Recently I saw a familiar case where an investor had selected a great little investment property and placed his application for the loan. Being disgruntled with his job he decided to quit and take a holiday. He planned to get a new job when he got back home, which he did. When he returned home his loan application process continued and he had to provide documents to the bank to support his income. The bank saw that he had a change in job and promptly declined his application!

If he had only just stayed in his job for a few more weeks until the loan application was finalised, he would now be the sitting happily on his first investment property.

I see this same scenario happen over and over and I want you to avoid the same thing happening to you!

(Even real estate agents will tell you not to change jobs when you are in the process of buying property.)

TIMES HAVE CHANGED

In days gone by, investors didn’t have to think about this so much because it was common that the career you went into as a 16 year old was the same career you had when you were making all of your loan applications as an adult.

Today the world is a different place. People are less likely to remain in situations that make them unhappy, especially jobs. Many employers demand more of employees, longer working hours and less gratitude for work done. It’s not uncommon for employees to change jobs multiple times in their working career.

Of course, the long term purpose of helping you to build wealth through property is to no longer have to rely on an employee status for income. But, in the meantime, initially you need your job to support the serviceability of your loans.

ARE YOU A RISK TO THE LENDERS?

Lenders look more favourably on borrowers who have a reasonably stable recent employment record. They prefer you to have had at least six to twelve months or more in your job, receiving regular income.

Lenders like to be reasonably sure the borrower has a reliable future income based on their current income. If they see a borrower has been changing jobs over a short period of time, there is just not sufficient evidence to back up their financial stability.

Equally high risks to lenders are borrowers who have gaps or breaks in their work history or have had a change in pay structure. For example, if you move from a salary to a position that is commission based, you will be tagged as a higher risk. This will occur even if your new employment conditions provide you with a higher income.

Moving to a commission based employment arrangement will be considered along the same lines as someone who is self employed. That means, you would have to prove a two year history of your new income levels before that additional income can be included in a loan application at all.

WHAT TO DO IF YOU HAVE CHANGED JOBS

If you have had a job change, no matter what, a lender is going to need the following things from you — and your employer — in order to approve a loan application: an offer letter for the property purchase, a role change letter if you have a title change and commensurate compensation package change, and the most recent pay stub and verification of employment.

It’s not all doom and gloom…..

If you have just changed jobs – don’t be tempted to do nothing expecting that you’ll have to wait for time to pass. Every lender views all circumstances differently. A good broker will be able to match you up with a bank that will look most favourably on your conditions.

Other circumstances that can also affect the loan approval process for you are:

  1. Not being honest about your financial position
  2. Not including all your expenses
  3. Get the paperwork details right first time
  4. Understanding your borrowing capacity before you place a formal approval
  5. Shop around to get matched with the best lender for your circumstances
  6. Be prepared for additional loan costs

A FINAL ROUNDUP

If you are looking to be changing jobs around the same time you are looking to buy a property, seriously consider doing just one or the other. Stay in the same employment at least until you have the mortgage.

If you already have a mortgage commitment and are determined you’ll be changing jobs, ensure you have enough money saved to cover mortgage repayments and lifestyle costs for a few months or even more, in case things don’t work out.

I hope these tips help you be more prepared when you are ready to apply for mortgage funds.

Thoughts, questions? Leave a comment & let’s talk…

Here’s to your success!

Fay McLean Property Investing Support

 

p.s. At the very least, consider getting yourself a complimentary Financial Health Check just by contacting me here. It’s a great way to see how much you can borrow in your current circumstances.

My March 2015 Monthly Review

My March 2015 Monthly Review

I have decided that at the end of each month I will write a detailed monthly report about my property portfolio and investor lifestyle. There is a lot more to owning a property portfolio than just simply signing a contract, sticking a tenant in your property and forgetting about things.
I hope by sharing my Monthly Review it will be helpful for you to read about the good, the bad and the ugly when it comes to creating and managing a property portfolio and investor lifestyle. This is going to be the real life stuff involved with property investing. Most of flashy sales teams trying to sell you properties will never tell you about these behind the scenes things.
I will share as I review any challenges I faced. What I can learn from these experiences? What good can come from it? By finding the positive and the lessons learned, those challenges then become your asset. This will ensure you don’t make the same mistakes or experience the same challenges/failures for your upcoming investing journey.

Interest Rate Reduction

For the third time in less than twelve months, this month Murray called the banks we have loans with and requested they review and reduce our interest rates. I have to make it clear, that this request is in addition to the drop in interest rates the banks have given as a result of the RBA reducing rates this past year. It really does pay to continually check in with your bank and keep them honest. This is extra money in our bank for just 10 minutes effort.

South Hedland Deal

This is a deal we are doing with a Joint Venture partner. You can read about the deal in more detail here where it all started.

Joint Venture Agreement in South HedlandThe property that is currently on the land has come up for lease renewal and the agents are recommending a drop in rent which is not unexpected given the current conditions in the mining arena.

The initial plan was to have already started to build the first of the new houses (4 x 2) by now on the rear of the block. To date this hasn’t happened for a couple of reasons. The main one is that we are investigating the opportunity to use pre-constructed buildings in a slightly different configuration from our original plan.

Some good research has been done by our partner on the option to have some smaller modular style accommodation built in China and shipped to WA for installation and final fittings. It would be very much along the same lines as what a builder in Perth has recently done recently that you can read about in this article.

 

Original plans: Two 4 x 2 houses plus one 2 x 1 granny flat giving us three rentable properties.
Currently being considered:
Two 4 x 2 modular multi-key units. Each of these modular units would have dual occupancy (multi—key) which means each 4 x 2 can be rented out as two 2 x 1’s. In addition, we can also fit two 2 x 2 modular multi-key units. Each of these modular units would have dual occupancy (multi-key) which means each 2 x 2 can be rented our as two 1 x 1’s.
In total, this option would provide us with a total of eight rentable units.

As with the homes Mr Forster has erected, the houses would be Cyclone-D rated and designed to meet the needs of the demographic current looking for accommodation in South Hedland and Pilbara region.

So, our joint venture partner is continuing to research the costing, viability and rental demand for this type of property. As you can see, the modular units would provide us with a much larger rental base and spread our risk should any of the units not be tenanted for a period of time.

If we decide to go ahead with the change of direction in what is built on this property, the current DA approval in place from Council would need to be re-submitted for some changes although we can’t foresee any difficulties in getting these amendments approved.

We were fortunate to buy into the Pilbara region at a time when the prices had already dropped considerably, and now it’s a matter of working out how we will maximize returns on our investment so that we can ride through the current conditions and still be players in the field when the next lift starts to occur – and I believe it will.

One thing we are realizing very quickly is that in the world of property development, the words 12 months really means 18 months icon_smile

Balmoral Joint Venture

This deal is a sub-division on a block of land in the inner suburbs of Brisbane. The sub-division is now completed and we have engaged a marketing company to promote the blocks of land to builders with mock plans of the type of house that could be built on these properties that would still provide a builder with a good profit margin himself, and see us receiving our expected asking price for the two blocks.
Hopefully next review we might have had some nibbles on these blocks icon_smile

Melbourne Sub-Division

This project is a larger 80 lot sub-division that is being done in two Stages. Large machinery is starting to come in to do earthworks, drainage etc and I’ll post some pics as soon as I have some.  Many of the Stage 1 blocks have already been sold.

We will be due to receive one chunk payment of some of our capital back that we invested into this project so the Line of Credit will enjoy having another $50,000 in it. This payment schedule was all agreed upon and set out in legally drawn up Loan Agreements between ourselves and our JV partner.

Gamble Green

We’ve recently replaced the oven in this property, and the tenant is now complaining to our Property Manager that it is not working properly and is inefficient.
We have also just ordered for a security screen to be fitted to the front door. This will assist in airflow in the warmer months, but more importantly, will also address the needs to meet with safety standards now imposed on rental properties.

Flynn Street, Churchlands

The new tenant that moved into this property in January has been no trouble and the increased rent we are receiving is very welcome. There will be a rental inspection on this property mid April. We have decided to attend this inspection personally so we can see first hand how the property is being kept.

Daly Street

A tradesman has been contacted to go and quote on some repairs to the patio at this property.
We are still waiting on a report on exactly what needs doing and the cost.

PPR

Principal Place of ResidenceWe have flagged 2015 as a year to do quite a few maintenance jobs on our principal place of residence. The most urgent was to replace the front doors which were very weather damaged and not a good look as the entry point to our home. The new doors look fantastic and still need a final coat of paint to finish them off which we’ll do after Easter.

Reviewing Our Own Portfolio

We had a good review of our current property portfolio during the last few weeks and can see that our focus still needs to be on increasing our borrowing capacity/income further to be able to add still another property or two into our portfolio. The sooner we can add these properties, the longer we have it to take advantage of another full property cycle.

Books I’m Reading

MONEY Master the Game: 7 Simple Steps to Financial Freedom

I was unsure about spending the time to read this book as I knew it had a very large focus on shares and mutual funds. But I figured if it was written by Tony Robbins, there would have to be something I could learn from it. And I was right! I’m only part way in, but this is a book that I would love to make as essential reading for all teenagers or young adults. The first few chapters lay the foundations for understanding the importance of saving, investing and having your money work hard for you. Even as a seasoned saver and investor, these are good reminders for me too. I’m looking forward to finishing the rest of the book. (I should get some good reading in over the Easter break!).

Property Investing Support Blog

Although this blog is reflective of the personal journey both Murray and I have taken to build a multi-million dollar property portfolio, it is important to me that visitors also see it as being a professional and high quality hub for information. It is for this reason that I have spent much of the past month working with designers to re-design this site. I am planning on being able to release the new version to the public by the end of next month, so watch this space….

Lifestyle & Personal Development

Events

I’m excited to have locked in my ticket to the annual ProBlogger event. It’s an event for lots of other bloggers and online entrepreneurs to get together and improve their presence and make new connections. It will be good to visit the Gold Coast and get lots of new ideas on how I can deliver great content to you on this blog. icon_smileicon_smile

Meditation and Journaling

At the end of 2014 I decided it was important for me reduce the high expectations I was setting on what I could achieve with my time. To learn to say ‘no’ sometimes and be sure to spend the majority of my time on things that were going to move me closer to both my professional and personal goals.IMG_1575

I am now regularly including meditation into my week and enjoying the process. It’s a new skill and one that I have wanted to introduce for a long time. I am also journaling every day giving gratitude and setting intentions for what I want my new day to be like. My journaling and meditation have both been helpful introductions to my daily routine to me start my days in a more peaceful way.

Goals Review

The end of March also saw the end of the first quarter of the year. It was time for me to review my quarterly goals. To see which ones got hit, and which ones fell short. It’s the first time ever I’ve been really committed to setting my long term goals and consistently reviewing my progress.  I break the long term goals down into quarterly, monthly, weekly and daily goals. I have to say I love it and have got so much more accomplished this way. I can still make even more improvements for sure, but I’m happy with the results so far.

I enjoyed putting this Monthly Review together and I look forward to doing one again for April. It’s great to share what’s working and what’s not and to give you an insiders view to property investing and wealth creation. Thanks for reading!

Please leave a comment below or let me know any questions you have.  I’d love to hear what you think!

Here’s to your success! icon_smile

Signature_Fay

 

 

 

P.S.   If you want to find out how you can start building a property portfolio that will fund a life you love… then the next step is to reach out by submitting a message by clicking HERE and I’ll look forward to seeing if I can help!

11 Tips For New Investors Nervous About Buying A Rental House

nervous buying rental propertyAs a new property investor, these are some of the ideas that have helped me and others get going when we have been nervous about buying a rental house.

1. Turn your analysis paralysis into a need-to-do list.

Breaking the whole investing process down in steps or a timeline will make it easier for you to take the emotion out of the process and just focus on what you need to do next to reach the goal you desire. It adds to confusion and nervousness if you try to remember everything in your head. Get it out on paper and worth through what needs to be done systematically.

2. Don’t get bogged down in media headlines.

The only way news channels and newspapers keep themselves in business is by selling. The bad stories make a great headline. That is why you see and hear so many. These horror stories and stories about the market dropping out of property is what feed the newsroom.

3. You are buying a rental property not a home to live in.

The property you buy will be a home to someone else, but it will not be your home.  Make your decisions from the point of a landlord and not a home owner. Many tenants will not have the luxury of being picky about things such as whether or not the bathroom is at the beginning or end of the corridor. Buy a property in a good location at a good price that will have tenant demand. That’s it!

4. Determine what spending limit you are comfortable with or require and stick to it.

You might be able to afford to buy an investment property worth several hundreds of thousands of dollars more than you are comfortable with. Be sure you’re buying a rental house that matches your comfort zone then, pull that trigger!

5. The key isn’t doing a home run the first time you buy a rental property.

But instead, to get started and not lose money! You will always be learning and changing your decision making processes, but until you take action and buy that first one, there will be nothing to improve upon.

6. Find and maintain a balance of doing due diligence and not over thinking.

When you are first buying a rental house and you start of look at all the numbers and official documents involved, it’s easy to get stage fright. Of course, check things over carefully, but there will reach a point where you must stop over-thinking or it will drive you crazy and you will end up doing nothing! If the numbers stack up – go for it!

7. Consider the 3 important elements.

Regardless of how many concerns you have or how nervous you are about buying your first rental house, it all comes down to 3 things when looking at a property:

  • Numbers: Do the numbers make sense?
  • House: Is the house in the condition you think it is and is it the type of property that will rent well?
  • Purpose: Is there something else you want to be doing in life? I’m guessing there is.

If these 3 things match up, you should probably overcome your nervous edge and get on with it!

8. Remember you’re not alone.

Everyone’s nervous about anything that will involve stepping outside of the comfort zone. Take some time, check your numbers. Gather a reliable support team (not a sales team!) around you and ask lots of questions.

9. Don’t listen to your brother, uncle, Mum or next door neighbour.

That is of course, unless they have already built a multi-million dollar property portfolio. You think you’re nervous. And yet you’ve still reached the point where you are seriously considering buying a rental house. Let me tell you – your brother, uncle, Mum or next door neighbour is even more nervous than you are – because they probably have never even reached the point you are at because they are so scared. These type of ‘helpful’ advisors can undermine your desire to build wealth and live a life you love quicker than you can say Jack Robinson.

10. Forget ‘la-la’ land.

Sitting on your coach thinking of how great it would be ‘if’ will get you nowhere. Wishing, dreaming, hoping is all great (and fun). But they won’t get you the results you’re after. They say knowledge is power. In fact it is not. Action is power.

11. Let the past be the past.

You might have had times where you have made decisions to invest your money before and perhaps it hasn’t worked out so well for you. Let bygone’s be bygone’s. Just because one thing didn’t work out well in the past, or someone else had a bad experience does not mean you will too.

[box type=”note” style=”rounded” border=”full”]Think of the reasons WHY you wanted to invest in the first place.[/box]

Remind yourself of the adventures you’ll enjoy, the time you can spend with family, telling your boss you quit.  Constantly remember the real reason you want to create wealth through property. Things won’t change from your current reality if you don’t take action.

If you don’t start now, you never will. You may feel nervous buying a rental house but there is no one else to wait for. It’s all you – and your future is waiting for you. After all…

A year from now you will wish you had started today. 

Now get out there and buy a house!

Thoughts? Leave me your comments below, and click the little share buttons below to share this post on your favorite social media channel!


 

P.S. :  Find this tutorial helpful? Subscribe by email to get notification of new free tutorials and detailed case studies. Just click on the box below then enter your first name and email address in the form, and I’ll see you on the inside.

Darwin: A Property Investors Paradise??

Darwin:  A Property Investors Paradise?

Over the past ten years, Darwin property has certainly lived up to its name “Life at the top”. The market has been top of the class, leaving all capital cities in terms of capital growth and rental yields and offering excellent returns for investors.

Darwin is a perfect example of the investment property opportunities that exit outside major cities like Sydney, Melbourne, Brisbane and Perth.

For those in our community who invested when Darwin was first picked as an investment hot spot, the capital gains and rental returns have been exceptional.

I have sourced a comprehensive 20 page report on the statistics of not just Darwin, but also a look at the other States of Australia too.  The information is prepared by reputable experts including Herron Todd White and CommSec.

To download your copy here <Click Here>

If you like what you read and would like to see the locations revealed of ideal investment properties in Darwin  <Click Here>

Here’s to your success!

Signature_Fay

Property Maintenance: How To Cope With Ongoing Property and Building Maintenance on Your Investment Property

property maintenance

How To Cope With Property Maintenance

With no exceptions, all of the properties in our portfolio have required money to be spent on ongoing property maintenance and repairs.

[box style=”rounded” border=”full”]In fact – what is it with ovens??? In the last twelve months, I’ve had to have new ovens installed in three of our properties.[/box]

Those of you who have an investment property already will most likely be familiar with the sinking feeling as you get told there is some kind of maintenance issue that needs attention.

If you are using a buy and hold strategy it’s more likely you’ll start out with a newer property. This is great when you are someone who still works a full time job, long hours or simply want to be more passive with their investing.

But… as years pass, things start to breakdown, wear out and need repair and maintenance.

Although these maintenance requests can sometimes be somewhat frustrating, I want to give you some mechanisms I have used over the years of my investing that make the matter of property and building maintenance all a little easier to cope with.

Change Your Attitude

It’s easy to think that tenants break things through lack of care. But if you actually took time to stop and think about how many times you replace, repair or maintain things around your own home you’ll realize that maintenance on an investment property needs to be done on about the same frequency as you need to do these same things in your own home.

It’s true – a house that you rent to a family of adults and children may require more repairs than a property that is rented by a single adult in their senior years. But either way, things will break. They will need replacing and sometimes, the gods just decide to make things stop working for no good reason at all!

The attitude you take towards maintenance of your properties is important. What you purchase is an investment. Your investment will only continue to rise in value and keep it’s earning potential if it is kept in good condition. So look on the bright side and see your repair and maintenance as a continued investment in the value of your portfolio.

property maintenance improves property valueKeeping On Top Of Property Maintenance

It’s always easier to catch maintenance issues while they are in early stages rather than for them to go unnoticed until major damage occurs. It’s for this reason many investors choose to use a company that specializes in property maintenance to do a regular maintenance check.

You can give the company a copy of the Property Maintenance Checklist I have created and ask them to report back to you.

Your Property Manager should also be providing you with detailed reports on the condition of your property several times a year. Please read these reports rather than put them on the filing pile never to see the light of day again.

Track the reports and take careful notice of any items that you see slip from being listed in ‘good’ condition to ‘poor’.   Stay in close contact with your Property Manager about anything that concerns you and don’t be afraid to ask for more information, photos or anything that will help you to stay on top of the condition of your property.

Using your property management reports and a house maintenance service company should see you cover every angle.

What REALLY Needs Doing?

I’ve created this Property Maintenance Checklist that will be helpful for everyone who owns an investment property and even for those living in your own home and want to keep it in a proper condition.

Content of this checklist is grouped according to different times of a year, so each section contains appropriate seasonal recommendations and tips on maintaining your investment property both indoor and outdoor.

If you find that there starts to be major items that need improving or replacing, it might get to the point where a more extensive cosmetic renovation is an option.

We have done this on a couple of our properties that were in need of a major upgrade. It’s when you decide to do the renovation that is important. The most ideal times to spend money on a cosmetic renovation are when you know you will need a bank valuation done in the near future or if you are looking to sell the property. Any time other than these can mean you are simply spending money without getting any significant return.

As an example, our property in Gamble Green is in desperate need of new carpet. The current tenant has been in there for over 5 years. He’s a tradesman who comes inside with boots on and doesn’t particularly want to have to be worried about having new carpet to take care of. We could not get a significant increase in rent for the property for the expense so for the moment; we’ll keep our money in the bank.

As a landlord it’s vital you also maintain certain safety standards. Examples of this are to have fire alarms fitted and working; safety switches that work, security screens on doors and windows etc.

Who’s Going To Do The Work???

If you’re great on the tools yourself you can save a lot of money doing property maintenance yourself. That is great – if you have the time and live nearby. In our case, most of our properties are either 4-5 hours away, or in other States of Australia so this is not an option. Plus my husband is a lousy handyman (but I still love him to bits icon_smile ).   So most of the time it’s going to be a matter of letting the experts do their job while you get on with doing yours.

Your Property Manager or building maintenance company can source and manage reliable tradies to do repair and maintenance work for you. If you are self managing a property (which I don’t recommend), there are lots of online quoting websites tradies use now like http://www.tradeezi.com.au/ and http://www.quote-trade-service.com.au/ where you can seek out someone in the area of the property to do the work for you.

Keep a record of all your expenses relating to property maintenance. It’s likely all of these can be claimed as a tax deduction but your accountant will make that formal decision for you.

How To Manage The Cost Of Ongoing Property Maintenance

I would like to think you always have a small amount of funds set aside for unexpected expenses relating to your properties. Allocating even a small amount each week will ease the burden of paying for a regular maintenance plan. It’s easier to fund small repairs but this won’t mean there will be random acts of replacement necessary…. you don’t’ usually get much notice when the water heater decides to blow up!

We have a Line of Credit set up specifically for this purpose.   Let’s say it costs $1,000 for a new oven. We pay this from our line of credit, so we are charged interest on the $1000 @5% = $50 per annum. That $50 is a tax deductible expense against the income from our properties. So the real cost to buy the new oven is in fact very little.

In my experience the areas requiring the most constant expenditure are hot water systems, toilet cisterns and ovens.

How to manage the ongoing property maintenance can be a big fear for newer investors but in the big picture of investing, it’s simply one of the learning curves that you will go through. There are always people you can call on for support and advice if you need it.

The benefits of maintaining a valuable piece of real estate far out way any concerns with small amount of expense required for property maintenance to keep your asset in good condition and highly attractive for tenants.

Fay

 

 

What tips or challenges would you add for managing property maintenance?

 

 

Free Property Investment Seminars – Are They A Waste of Time??

freepropertyinvestmentseminarperthYou’ve got your weekends all planned out then you open your emails and see this…..

Free Property Investment Seminar

Damn! Now you have a decision to make. You can stick to your weekend plans and keep your spouse and family happy. Or you can decide to grab a ticket to the seminar, commit to anything from a few hours one night to a full weekend to go to the free property investment seminar and start a household argument that leaves the air frosty for longer than it seems worth.

I’m a big believer in investing in one’s self education. I’ve spent thousands upon thousands of dollars over the past 10 years on travelling and tickets to events, seminars and workshops all over the world. All in the quest of knowledge and self improvement.

I love to learn more about property investing as well as other subjects that interest me and affect my life including fitness, online marketing and personal development.

As you can see, much of the information and inspiration I share on property investing is delivered to you through my blog here at PropertyInvestingSupport.com. So Darren Rowse and Fay Mclean, Problogger Seminar perthwhen I heard that a true leader in his field, Darren Rowse from ProBlogger.net was putting on an event in Perth I jumped at the opportunity to get a ticket and learn from an expert.

It was an amazing day. I got to meet and network with loads of inspiring bloggers all sharing their skills and expertise through their blogs. People like Nicole Avery from Planning with Kids and Kelly Exeter from KellyExeter.com.au and Editor of Flying Solo. And of course, I was totally inspired by Darren himself!

This was a paid event and well worth every cent. Unfortunately the same cannot be said for every event I’ve paid to attend.

When it comes to seminars about property investing, whatever price tag is attached to a seminar ticket, does not necessarily indicate the level of value that will be delivered. In fact, many free property investment seminars can deliver massive value. There are some important points to keep in mind as you see these offers come up though.

Here are some warning signs to help you recognise dodgy investment seminars and avoid being ripped off.

1.  Be aware of over-hyped and misleading claims.

Some promoters of free property investment seminars will send an ‘exclusive’ invitation through the mail to attend a ‘premier wealth event’. There will be motivational speakers and they may claim their financial secrets have the power to turn you into a millionaire within a few years.
Claims like these sound great and are almost always over-hyped or misleading. The recommended investments can be expensive, highly risky and lose you money.

In fact, the very first major seminar I ever attended was this type (not a property seminar though). Being naïve as I was, I paid out $30,000 (yes that’s right – $30K!) and got none of what was promised to me!

If there is a big upsell and sales pitch at the end of the event, then that’s the very reason the event was free in the first place. The company will be making all their money from their sales pitch. You will have been given a trickle of information to wet your appetite and if you want any more information then you’ll have to pay big time.

Solution: Keep your money in your pocket! Whatever you do – DO NOT sign up to pay out any money for information or advice on the first night. Don’t fall victim to anyone who hassles you to make big decisions involving lots of money on the spot. Go home and let the information sink in first and then make your decisions in the clear light of the morning.

2.  Constantly Changing Strategies

There are many strategies to build wealth through real estate. Many of the strategies do work well together such as renovations and sub-divisions. But when you are starting out its ideal to focus on one strategy. Which strategy you focus on will depend on your income, your goals, your personality and how far away you are from wanting to give up your day job.

Sometimes you can attend a seminar or workshop and not long into the session, your head is spinning with an overload of information. Just yesterday you really thought you were sure about what type of investing strategy you were going to follow and now….. everyone is telling you something different and your head is spinning like a yo-yo on a piece of string.

Solution:

A quick way to lose time and money in the market is to constantly jump from one strategy to the next. One minute thinking you might buy a house and renovate. The next minute thinking you want to build. While strategies such as these certainly work, if you are always out there trying to make a quick and easy financial killing, you always run the risk of your financial capital being quickly and easily killed.

If you’ve already decided you are following a set strategy such as buy and hold, then keep your head down and bum up and stay focussed. Pick your strategy and then learn everything you can about that one strategy before you move onto the next. This way you’ll gain momentum and be able to make wiser decisions as you become more educated.   Keep your eyes on the goal.

Good Reasons To Attend Free Property Investment Seminars, Events or Workshops

1.  Great Networking Opportunities

You don’t have to do this journey alone. In fact, it’s much more fun and motivating to be around other people who share the same challenges and goals you do.

At a free property investment seminar you will be in a room of like minded people and this means you’ll have a great opportunity to network and meet people who may very well be able to support you in your investing goals. [quote]Anyone who becomes successful has never done it all on their own [/quote]

The people we have met at both online and offline property events have played a significant part in our investing success. These have included researchers, building inspectors, tradesmen and joint venture partners just to mention a few.

2.  Just One Takeaway

invest in youMaximising your investments is not just about signing the contract, getting a tenant and then putting the whole thing on the shelf to take care of itself. Oh no. There is a LOT of information to keep on top of if you want to keep your expenses to a minimum, save money and increase thee overall returns from your property portfolio. And sometimes, it’s from listening to one of these free property investment seminars that you will hear the one tip that will be a major takeaway for you.

3.  Knowledge Is Power

As your education increases it’s easy to think you know enough. Wow – what a mistake!

In my opinion you can never know enough.

It is great to be led by a mentor or support person as you begin your investing journey. But it’s also important you take responsibility for your financial future. Property investing can be a little like a game of chess. You’ve got to always look at the current situation (economic) to help you decide on the best way to make you next move.

The purpose of your investing is for it to take you from where you are today to where you want to be in the future. As such, it’s going to take a little bit of education along the way. Staying up to date on information by attending events is a great way to do this. [quote]Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime. – Maimonides[/quote]

 You don’t know what you don’t know.   Think about that…..

It’s for this reason I would encourage you to attend educational and informative events relating to property investing as long as you keep these main points I’ve mentioned top of mind:

  • Tread with caution.
  • Set your intentions.
  • Know your strategy and stay focused on your goals.

How do you know what property, or which investment strategy is best for you?   If you’re looking for help with where to get started to make your next move ….  all you have to do is contact me to register for a Strategy Action Plan call.

Here’s to your success!


 

P.S.     I would love to help you take your property investing to the next level.

If you have any questions, contact me directly or leave a comment below.

Is Financial Freedom Possible? Or Is It Just A Dream?

I think the reality is that everyone wants to have financial freedom! 

Why?  Mostly people want to enjoy more fun and freedom in their life.  They want to spend more time doing all the things they love.

But also….. so they don’t have to worry about how they’ll manage with unexpected and extended time off work or unexpected bills or medical expenses.

I have spent the last week sitting beside a hospital bed while Murray (darling husband) as been receiving treatment for a serious internal clot.

Working Hard can lead to financial freedomGoing on outside the window of his hospital room there is construction for a new wing of the hospital. I’ve been watching the labourers on the site for several days now and while I don’t know for sure, I can only imagine what is going through their minds day after day.

Day in, day out, in the hot sun they are climbing ladders, hammering tossing bricks. It’s my bet every single one of them wakes up every day and feels like they have to drag themselves to work. And then, towards lunchtime they’ll be counting down the hours till its knock off time.

I bet, each day that instead of rolling out of bed when their alarm goes off in the morning, they’re wishing they could head out for a long breakfast, spend the day fishing, head to the beach and catch some waves, or perhaps spend time with their family instead.

Perhaps you have similar thoughts??

Wishing you could choose how you spend your day rather than put in the long hours you do at work. Or at least, just work at what you love doing rather than being a cog in someone else’s business.

While sitting by a hospital bed is not the most glamorous thing to be doing, I’m grateful I could pack up and take off from home to the city, book some accommodation to allow me to be with Murray while he is so ill.

It is true luxury to not have to ask a boss for time off.  To not have to shuffle shifts (although I did have to give up babysitting my grand-daughter) and to not be panicking about how we will pay the bills because we are both taking time away from our working environment.

I can only do this because I know we have our money working hard for us. Investing in property has given us the ability to have freedom of choice as to how we get to spend our time. We have income coming in from our investment properties which lands in our bank accounts no matter what else we are doing.

Every day I find situations that make me grateful we took steps to financial freedom and made the decision to build a property portfolio so that when the need arises (just like now) we are financially comfortable and able to have more choices than most.

Perhaps you are still in a place where you are working long hours. Being in that position is not always a bad thing!! After all…

[quote]Hard work is a prison sentence only if it does not have meaning. Once it does, it becomes the kind of thing that jakes you grab your partner around the waist and dance a jig![/quote]

If the meaning of your hard work is that you are focussed on a savings plan for a property – great!

If that meaning of your hard work is so you can have serviceability to borrow funds for your next property – great!

What’s important is that you take action to discover how to turn the hard work you do now, into steps towards financial freedom in the future.

  • Are you ready to take the next step?
  • Are you ready to see what your money will buy?
  • Are you ready to put a plan into place to buy your first, second or perhaps third investment property?

It’s 5pm and as I glance outside, all of the labourers are clocking off for the day. I’m about to leave the hospital for today and as I take a glance at the labourers on the construction site outside, I hope sincerely that each and every one of them has a meaning to the hard work they are putting in.

You’re already one step ahead of most people by even reading this blog. You’ve taken the first step to reach out.

Are you ready to put your hard work to good use??

There can be a lot to figure out if you are just starting to think about if you want to invest in property and don’t know where to start. If you want to look at the next move you need I can help. That’s what I’m here for!

Work hard now by all means….  assert yourself and you can shape your future to you desire.

[quote]Success and financial freedom is not a random act!   It arises out of the powerful opportunities that investing in property can provide.[/quote]

Seriously, unless you’re having every emotional and lifestyle need met by working hard…. Why are you doing it?

Why spin your wheels every day hoping and praying life will get a little easier and be more fun.

There’s a better way…

If you’d like a more in depth private discussion on what’s the best way forward for you, go to…

http://propertyinvestingsupport.com/contact-us/

Here’s to your success!

 

 

P.S. :  Find this post helpful? Subscribe by email to get notification of new free tutorials and detailed case studies. Just click on the box below then enter your first name and email address in the form, and you’ll get tips, tools and strategies to create financial freedom.

P.P.S. We’ve got Murray back home now and he is getting better bit by bit every day icon_smile

 

2015: 12 Ways to Make This Your Life Changing Year

2015: 12 Ways to Make This Your Life Changing Year This is going to be a GREAT year, I can sense it already!

Do you ever feel like you’re just drifting along and you look back at the year just passed and wonder, where did it go?

What did I do? What did I achieve?

You may have been flat out busy and every week may have been filled with activities but what did you actually do?

If you can relate to that in anyway at all, the good news is that you can totally change things around this year by being much more purposeful with every day!

Deciding to invest in property as a way to create your dream lifestyle is often part of a bigger picture for you.

It’s easy to get caught up in the day to day activities of work, family and life in general. It’s important to revisit your long term investing goals so every day and every week you can take small steps to achieving the outcomes you want for your future.

Write your goals down. And then start every day, every week, every month with specific purpose.

This way you can begin to measure your results vs activity. Are you meeting your goals and living on purpose?

Here are 12 tips to really help you determine your purpose, focus on it and achieve it like never before!

1.  Know EXACTLY where you want to be on December 31st 2015.

2015: 12 Ways to Make This Your Life Changing Year Write it down, create a picture book, create an excel spreadsheet or presentation in powerpoint, record an audio. Whatever it takes to make the vision of where you want to be at the end of 2015 crystal clear in your mind.

Make sure you write specifics. Saying I want to have more money or increase my net worth, take more holidays or buy more property won’t cut it.

What will your asset and liability register be exactly, what will you’re net worth be exactly. How many weeks holiday will you take a year and to where exactly? How many properties and what sort will you buy exactly?

That is the key.

Example:

It’s 31st of December 2015 and I have increased my net worth to $1 million, I enjoyed taking 12 weeks holiday visiting Thailand, Europe and New Zealand, I have added two units to my property portfolio.  

That’s just a quick example and of course you can go into much more detail about other things you want, but hopefully that gives you an idea.

Think about who you want to be, not just what you want to achieve.

It’s easy to be setting goals, reviewing your progress and still wondering why you are so far off getting what you want to achieve.

It could very well be a good time to take a look at who you hang around with and the person you are being.

When it comes to the end of your time here on earth, how will you be remembered?  

I often reflect on the person I am when I am attending a funeral and hearing all about the person we are sadly saying goodbye to. I ask myself what kind of things will people say about me? What sort of person do I want to be remembered as?

Knowing that I want to inspire and impact others, I know I need to be a certain person to achieve that. With so much more I want to experience and achieve in life I really need to step it up.“>Brendon_Burchard_Lifes_Golden_Ticket

A book I’ve read several times that really drives this home is Brendon Burchards Life’s Golden Ticket: An Inspirational Novel

Once you have a crystal clear vision of where you want to be at the end of 2015, take some time out to consider who do you need to be to achieve that vision?

If you met you met YOU in the street at the end of 2105, what would you think about the person you had just met? Would you want to spend more time with them? Would you find them inspiring?  Write down the changes you would like to make so you can become the person you want to be.

This is a chance to improve on the amazing person you already are. This is the best YOU you can be! 

2.  Start making decisions and choices based on the new vision, rather than where you are now.

Having a clear vision of where you want to be at the end of 2015 and the person you want to be, imagine you’re already there.2015: 12 Ways to Make This Your Life Changing Year

You are already that person, you are already achieving your goals.

Now make all your decisions from that place. Think about everything, and make your decisions from a place of abundance rather than scarcity or desperation. Those are the wrong decisions. They may give some short term relief, but rarely will they be beneficial in the long term.

Believe me, I’ve made a few of those over the years!

This takes a little practise but it is worth it in the long run

3.  Design your investing strategies around your life, not your life around your investments.

2015: 12 Ways to Make This Your Life Changing Year We only get one chance in this lifetime. For some there is a lot more time than for others.

One thing is for sure in life – and that is that you never know when your time is going to be up.

Every day is precious so don’t waste a single one of them.

You’re interested in property investing because you want to live life in your terms. Decide right now exactly what that ideal lifestyle looks like and make your investing decisions around that. You want to be able to cut back your hours in two years time? You want to be in a position that your wife no longer has to go to work? You’d like to be secure in the knowledge you can have extended holidays while you are still young enough to enjoy them?

Be sure to spend as much time as you are willing to give becoming educated, gaining the knowledge and support you need to make the right investments that will return you the wealth you need to make your ideal lifestyle happen.

4.  Don’t be afraid to be wealthy!

We all want to be able to retire early to a life of fun, adventure and financial freedom right?

It’s all well and good to want to be comfortable with an investment property that you can see every day down the street.

It’s inspiring to see renovation projects that others complete. But don’t forget why you started to look at property investing in the first place.

The road to financial freedom is building wealth. It’s no good getting sidetracked with properties or strategies that don’t fit your personality, your financial situation or the financial outcome you are wanting to achieve just because it seems like a good idea at the time.

If you do that you could easily end up with a portfolio full of duds and you won’t be living any kind of fun lifestyle soon.

You have to be able to make wise buying decisions and create a team around you giving you support to maximize your profits.

Time in the market is important, so you need to ensure you’re in the property market as soon as you can be. Although it can be done on the side, property investing is a business, it is not a hobby. This is a business which could both give you the life you desire and make a huge difference to your future.

5.  Learn to master your time.

Oh boy – I really struggle with this one. Always have. One of the best courses on time management is Eban Pagan’s Wake Up Productive.   All of Eban’s stuff is awesome and I’m currently going through his free video series again. Every time I do I bring my self back to centre and increase my productivity.

This year is going to be different…. this is the year to absolutely master time! (Think about who you want to be).2015: 12 Ways to Make This Your Life Changing Year

We all have the same 24 hours in the day. We all have the same 60 minutes in an hour. Those who get more done are not necessarily more talented or have secret skills you don’t have; they are simply ruthless with their time.

Lots of people say they don’t have time to do what it takes to bring all the pieces together to make wise property investments.

Those who want to achieve their plans for the future will not allow any unnecessary distractions to get in the way of things that need doing. They will set themselves deadlines that MUST be met no matter what! They will plan their time and have clear timeframes to achieve tasks that need to be done. It might be watching an educational webinar. Taking a coaching call from your mentor. Sorting through some property profiles. Gathering finance documents for the broker.

People who are really determined to get what they want in life will spend their precious time doing things that make the most difference!

Here’s a great little exercise to do. For one week keep a time sheet and mark down how you spent the time you are not at work. At the end of the week go through your time sheet and highlight every hour you spent doing something that was non-productive towards your financial goals.

Chances are you’ll be surprised at how many hours are simply whittled away doing very little.  For most people it’s spent in front of the TV. Your timesheet needs to be filled with activities and actions that will drive you towards generating wealth.

That is what will dramatically change your life from what it is now to what you want it to become.

6.  Build your Network as well as your Networth!

2015: 12 Ways to Make This Your Life Changing Year It’s has been said many times that you are the sum total of the 5 people you spend most of your time with. So it’s important to hang about with people who energise you, and have already achieved what it is you want to achieve.

Ever been around people who de-energise you? I know, we all have.

You know that moment when you’re having a great idea and you’re super excited and you can’t wait to chase your dreams and then that lovely friend or spouse or family member you love so much just wanders in and squashes them like a frog.

It’s only because they love you and they want to protect you right? Or actually has it got more to with their own insecurities? Who knows, don’t waste your time thinking about it, just go out and get around people who have been there, done it and want what you want.

People who are successful take advice from and model those who have walked the path before them.  People who want to be successful but generally are not take advice from the bloke down the pub!

The world we live in today allows us tremendous online access to be part of groups and communities of like minded entrepreneurs. Property investors are all around you, you just need to be willing to join into their conversations!

7.  Manage your money

This is a massive point!2015: 12 Ways to Make This Your Life Changing Year

Even if feel that right now you have very little, it’s time to start managing it.

If you want to achieve financial freedom you have to do it with purpose. That doesn’t men just earning money, it means investing it wisely and also managing your money even better.

It’s amazing how many people I speak to that are earning big incomes and still have trouble keeping any money in the bank or have trouble saving for a deposit to place on an investment property. If this is you, it’s time to go back to basics and run with a budget until you reach your savings goals.

Money can be easily made but there is still no need to throw it away unnecessarily. The trick is holding on to it!

I’m a big believer in knowing your numbers ALWAYS! Knowing how much you spend on things and how much projected profit you anticipate from your investments.

Knowing these numbers in detail will allow you to manage your money and maximize your profits.

8.  Feel the fear and beyond.

2015: 12 Ways to Make This Your Life Changing Year FEAR = False expectations appearing real. In other words fear is what you make it.

What are we afraid of? All of us can name many situations that keep us in a state of fear – for example, fear of aging, rejection, ending a relationship, losing a loved one, not having enough money, becoming ill, and on and on.

Most of these fears are ‘surface’ fears. I would call them this because they only scratch the surface. If you look a little deeper you find the REAL fear which is the underlying cause of all your other fears. And what is that? It is the fear that you won’t be able to handle whatever life brings you!

If you knew that you could handle anything that comes your way, what would you possibly have to fear? Nothing! 

We are conditioned from a young age to be cautious. After all, I’ve never heard a parent calling out to a child going off to school, “Take some risks today, Darling…” On the contrary, the words we hear are usually “Be careful ….” Every time you take a step into the unknown, you experience fear. Fear is part of a success package. With each little step you take into unknown territory, you feel stronger and stronger.

Think about something you have done and accomplished that when you first thought about it – put the fear of God into you.

I can remember how afraid I was when I considered participating in my first half ironman event. Boy was I scared!! But every training session, every discussion with other club members I got a little stronger both physically and mentally. When I finally crossed the finish line I was so proud of my achievements and nothing could take away the feeling of success I had in that moment and have lived with ever since.

It’s time for you to take a few steps outside your comfort zone if you are considering growing your property portfolio. Do one thing at a time. Attend a meeting, listen to a webinar, read a book, fill out a finance capacity form; whatever it is that you have held back doing for so long because of self doubt and fear.

Sometimes it’s time to just take that leap of faith and when you have that next property sitting sweetly in your portfolio – any of the fear you overcame along the way will have long melted away.Recommend book:

9.  Keep it simple silly!

As human beings it is our nature to make things more complicated than they need to be.2015: 12 Ways to Make This Your Life Changing Year

Well, stop it!    With everything you do ask yourself, how can I simplify this task or project?

I actually find the simple answer for me in most cases is to turn to someone who already has the answers or who has already done it before me.

I’ve known people who have got stuck for months and months trying to manually research data and create dot maps in an attempt to figure out where the next best hot spot is going to be. By the time they are completed the market has well and truly moved on, or they have lost their mojo completely.

Make it a habit in your life to simplify as much as possible.

At every opportunity ask yourself these questions;

1. Is what I’m doing right now moving me closer to my goals?

2. Could someone else be giving me this information rather than me spending hours finding it myself?

3. How can I simplify what I’m doing right now?

10.  Invest in yourself!

2015: 12 Ways to Make This Your Life Changing Year This is not an excuse to buy every book, program or seminar ticket that is on offer.

However, it is sensible to invest time talking to the right people that will give you and your financial goals a leg up.

Don’t try to learn it all yourself, step in the shoe prints others have left and learn their mistakes and triumphs the fast and easier way, through what they share with you. But be focused about what and who you invest in. Absorb everything like a sponge.

You will never stop learning, so be hungry for education.

Yes, I already have a lot of experience in property investing and do a lot of reading and research but if someone else is getting the sort of great results I want, then I want to learn from that person.

A word of warning though. Don’t allow education to take over your life. As soon as you have watched a webinar or been sent some information you must TAKE ACTION!

It’s the action part that’s the most important bit.

11.  Become a master in the art of happiness.

2015: 12 Ways to Make This Your Life Changing Year

Happiness is a choice not a circumstance.

We all have the same 24 hours in every day.

We will all at some point in our lives lose people we love, we will all suffer health issues, I grant you some worse than others, but whatever life throws at us it’s how we deal with it that determines the outcome. Tony Robbins tells an amazing story in his personal power series (which I highly recommend by the way) about a guy called W. Mitchell  http://www.bigspeak.com/w-mitchell.html

This guy, a healthy and fit ex-marine, has a motorbike accident that leaves him with 65% of his body covered with devastating burns. Clearly in pain every day, he returns to life as normally as he can with an incredibly positive outlook a smile on his face and goes on to build a successful business. Unfortunately 4 years later while flying his small plane, he crashes. His passengers walk away unharmed, but the crash paralyzes him, leaving him wheelchair bound for the rest of his life.W Mitchell is now a worldwide motivational speaker and author of the book  It’s Not What Happens to You, It’s What You Do About It.

I’m just scraping the surface here with this story and I strongly encourage you to get the book or visit his website to learn more, but the message here is all about CHOICE.

You choose how you feel every day.

You choose how you deal with things that go on in your life.

You choose what to focus on each day and although it’s not easy sometimes, you choose whether to feel happy or not.

If you’re reading this and thinking, come on Fay, it’s just not that easy then you’re right. It’s not easy if you have developed a pattern of negative thinking. In fact it’s hard. But it’s doable. It’s all about mastering your emotions and training your brain to replace the repetitive negative thoughts with empowering ones.

If you’re in that situation I urge you to get yourself a copy of Anthony Robbins’ Personal Power II: The Driving Force! (25 CD Set).

Find yourself a good life coach if you can (ideally recommended by someone who has experienced the change) and dedicate yourself to finding happiness.

I also recommend you pop on over to www.ProjectLifeMastery.com and watch some of Stefan Pylarinos’ videos which I find are great for inspiration and motivation.

Make it a daily priority to fuel your mind with books, videos, audio, people who all advocate and practise positive mindset shifts and habits.The more you can immerse yourself in the education of what rituals to undertake to induce happiness the happier you will become.

If you want to be truly happy you have to work on it like you would your business or job. Fuel your mind with the right stuff and people everyday and make a choice to master the art of happiness!

12.  Have FUN!

2015: 12 Ways to Make This Your Life Changing Year What are we doing all this for if it isn’t to have FUN!

Chances are you’re investing in property so you can get the heck out of your regular J.O.B. and have more time to enjoy life with your family and friends.

I hope you do enjoy the process of increasing your wealth and creating financial freedom.

Sometimes there are tasks that are less enjoyable than others.Pouring over data, contracts and finance documents can get pretty full on sometimes. It’s important to remind yourself of why you are doing this.

Remember my earlier advice; Don’t waste a DAY!

If you don’t enjoy your current job or want to skip into retirement early then make some plans to do something about it.  Sometimes life requires massive action so take it!

Summary

So there you have it 15 Ways to Make 2015 a Life Changing Year.

I hope this has helped and inspired you to make some changes and take some big leaps moving forward.

The key to all this however is action so let’s take some right now!

Action Steps:

  1. Read through the article thoroughly, there’s gold in here.
  2. Create a spreadsheet or google doc and list all the Steps.
  3. Make a commitment to yourself to work through each step one at a time.
  4. Tick off each step on your spreadsheet as you tackle it head on and take some action as a result.
  5. Download 10 Biggest Mistakes Property Investors Make and How You Can Avoid Them so you can see exactly how you can retire to a life of freedom and adventure through smart property investing.
  6. Choose which points resonate with you the most and comment below.  I’m going to SMASH 2015 because ……..

Thanks so much for reading!

Let’s Crush 2015!!!!

Here’s to your success icon_smile

Fay

 

10 Sure Fire Ways to Increase Your Serviceability

“How can I increase my serviceability?”

…..is a question I get asked all the time.

Once you understand the power of property as a vehicle to creating long term wealth you will want to buy one investment property, then buy another and then another. It can literally become quite addictive

Trouble is, while holding properties long term will create wealth from capital growth, having cash flow to support your portfolio is like needing to have a pulse to keep your body alive.

After you’ve bought your first or second property, you can often get stuck because your serviceability won’t let you buy more properties.

If you want to improve your cash flow, look carefully through the following strategies. Growing your portfolio further may be possible by applying one or more of these ideas.

1. Reduce your credit card

creditcardOne of the first and easiest ways to increase your serviceability is to reduce your credit card and other credit.

Your existing credit limits have a large bearing on your ability to service new loans. Having a high credit card limit can dramatically reduce your serviceability.

Many borrowers get easily confused about how a lender will treat their credit card debt (or lack of it). Most people believe it’s your credit card balance that counts but that is not the case.

Lenders will take the limit on the card as a possible debt level regardless of whether or not you pay your credit card off on a monthly basis. So even if you have a zero balance on your $10,000 limit credit card most banks will count that $10,000 as a liability.

Lenders will also assume you have a monthly debt repayment of 2%-3% of your total limit.

To give an example, if your credit card limit is say $10,000, most lenders will assume your minimum monthly debt repayment to be $200-$300. This calculation stays the same from the lenders point of view, regardless of how much you have outstanding on your credit card at the time of your loan application.

At the time of making a new loan application or accessing your serviceability, you should try to keep your credit card limit as low as possible. The key things to consider when taking out a new loan is to keep your credit card limits as low as possible.

Even inactive or unused credit cards are considered in the same way as the example above. If you own multiple credit cards do your best to cut up or cancel as many of them as you can. This will be advantageous even if it is for the short period of time that your loan application is being submitted for approval. If you have to keep one card available during the loan application period, at least request that the credit limit be reduced to as low as you can manage for that period of time.

Don’t apply for any further credit facilities such as credit cards, car loans or personal loans while you are having an increase to your serviceability accessed. All of these limits will reduce your ability to borrow.

2. Consolidate Your Debts

consolidateConsider combining any unsecured debts such as other personal loans you may have into your existing mortgage repayments. If each of these unsecured debts are listed individually you will see a high monthly total that needs to be paid out in order to reduce these short term debts.

A lender will look at these high monthly repayments and calculate this against your serviceability. They will consider each of these repayments to be less money you have available to meet a new mortgage repayment.

By rolling the debts into your existing mortgage, the repayment will be seen as one lump sum and this will immediately work in your favour to help increase your serviceability.

3. Know Your Numbers And Keep Them Up To Date

Almost every week I spend around one hour keeping my book keeping up to date using Quicken. quicken

I know how much I spend on every thing that goes on in my life (including how much all my coffees cost me!). While this may been an overkill to some – I believe it gives me massive power.

I can see areas that I can cut back on if necessary. I can notice if a change if unusual charges occur in relation to personal or property invoices. And I believe in focussing on abundance.

You might not have the same reasons as me to know your numbers but when it comes time to increase your serviceability you will be able to:
•    Provide the most up to date information possible on your income levels to your lender.

•    Complete your tax returns on time (money back in your bank account quicker).

•    Provide information on your entire income. If you are working for wages your last two payslips may not accurately reflect your annual income. And if you are self employed or relying on income from your property portfolio like me, you will need to be able to see your annual income.

4. Join With Your Partner

If you have previously loaned money in just your name you can increase your serviceability by joining with your partner this time around. Including your partners income in the loan application will boost your serviceability. Understand of course that your partner will also then also become responsible for the debt if a new loan is approved.

5. Split Liabilities With Your Partner

In the exact opposite to the above strategy – you can split the liabilities for some of your expenses with your partner. You will need to be buying a property only in your name for this to work.

Provide proof in your application that your partner is responsible for certain obligations and you may be able to increase your serviceability.

For example, you could show that your partner supports – and will continue to support – your dependent children and the lender may disregard any financial costs associated with their care.

6. Get The Right Product For You

There are so many loans on the market now it’s like a smorgasbord. And each new product comes with its very own features. Every lender has their own criteria and guidelines when it comes to approving loan applications. This is where a broker can be of such a help to you. They know and understand each of the lenders requirements and can match you more easily with a lender whose guidelines you meet.

Many features of products that can mean you either are or are not able to service a loan include:

Not every bank will access your income in the same way. Some lenders will require you to have been employed in the same job for a longer period of time than another lender. Some lenders include certain types of income such as government benefits whereas other lenders may exclude them.

If you want to seek every possible opportunity to increase your serviceability, work with a reputable broker who can really shop around to find the right product for you.

7. Keep On Top Of Your Existing Interest Rates

If you can get a lower interest rate for any existing loans this is going to mean lower repayments. Lower repayments will help increase your serviceability!

While the RBA interest rate has remained steady for a long time now, we have personally telephoned our bank three times in the last twelve months to request a reduction in our loan interest rate. Every time it has been granted! You must stay active in pursuing every avenue open to you to maximize your profits from your property portfolio. Keeping on top of your existing interest rates is a way to easily keep more cash in your bank account.

8. Pay Interest Only

Not everyone is aware that lenders will nearly always allow you to make interest only repayments on your loans. The first loan many people have is for their principal place of residence (PPR).

While you can pay principal and interest to help reduce the overall debt, it is also common to request your mortgage repayments be interest only; even if it is your PPR.  This will mean your monthly repayments are considerably lower than if you were paying principal and interest.  Lower repayments equals great serviceability next time round.

9. Stretch Your Loan Term Out

Stretch your existing loan to increase your serviceabilityMost mortgages have a loan term of 25-30 years. Some lenders will agree to letting you extend this out to 40 years. This 10 year difference can make your repayments hundreds of dollars less each month. If you need to increase your serviceability you might want to have a serious conversation with your existing lender about this option.

Extending a loan like this will mean your overall interest paid is more but it could be well worth it if it means you’ve been able to access additional funds to propel you further into the property market.

Being able to secure and hold an additional property that has good capital growth potential might far outweigh the additional interest you pay on the extended loan.

10. Save…And Then Save Some More!!!!

If you’ve set a goal for what you want to achieve, it will be easy to be determined with this strategy. It is also easy to implement and requires the very least effort of all.dollararmy

Establish a budget and keep track of your spending. Allocate a certain amount of your income regularly to a savings account.

Aim to save 10-25% of your deposit. The amount you will need will vary depending on which product your mortgage broker considers best for you. If you’re using equity from an existing property, it’s still a good idea to save up a nice stack of cash before applying for your loan.

Careful planning, debt reduction and consultation with your broker and key factors to increase your serviceability without having to make dramatic changes to your existing lifestyle.

Start working on these strategies today and speak to a reputable broker  to help you calculate how much you can borrow for your next property

 

 

Cheers, and I hope you enjoyed this post! Let me know, and please share if you’d like! icon_smile

 

Real Estate Investing Ideas, Tips and Tools To Help You Create More Wealth and Financial Gain