PROPERTY STRATEGIES FOR IMMIGRATION AGENTS

Transcription

1 PROPERTY STRATEGIES FOR IMMIGRATION AGENTS View our videos at Follow us on Like Blue Wealth Property on We support

2 Disclaimer This presentalon is opinion and not advice. The audience should seek their own professional advice on the subject being discussed Examples used in this presentalon are for illustralve purposes only.

3 Agenda Who is Blue Wealth Property? Three Valuable Lessons Blue Wealth Research Methodology Case Studies The Super RevoluLon Next Steps

4 Who Is Blue Wealth Property?

5 Blue Wealth Property Over 140 years experience Have helped over 15,000 people Helped Australians invest in over $950 million worth of assets We simplify complex concepts NaLonal approach looking at all Australian markets We support clients by holding their hand through the process

6 X Lessons to Create Wealth in the Australian Property

7 Lesson #1

8 Know Your Numbers Do you know your: Taxable income Borrowing capacity Savings capacity Value of your house Value of other assets Super balances How much tax you pay How much can you borrow from others Capital gains tax rate Yield you re achieving on your investment property The yield you need

9 Lesson #2

10 The Power Of Leverage

11 10 Year Growth Total $137k Total $274k $100k $100k Total $484k $100k Total $967k $200k $400k $800k $100k ($100k) ($400k) ($900k)

12

13 Lesson #3

14 The Magic Of Compounding

15 What Would You Choose? A Genie offers you: $1,000,000 Or 1c piece that doubles every day for 30 days

16 The Genie Answer Day 1 $0.02 Day 2 $0.04 Day 3 $0.08 Day 4 $0.16 Day 5 $0.32 Day 6 $0.64 Day 7 $1.28 Day 8 $2.56 Day 9 $5.12 Day 10 $10.24 Day 11 $20.48 Day 12 $40.96 Day 13 $81.92 Day 14 $ Day 15 $ Day 16 $ Day 17 $1, Day 18 $2, Day 19 $5, Day 20 $10, Day 21 $20, Day 22 $41, Day 23 $83, Day 24 $167, Day 25 $335, Day 26 $671, Day 27 $1,342, Day 28 $2,684, Day 29 $5,368, Day 30 $10,737,418.24

17 Year Property 1 Property 2 Property 3 Property 4 Property 5 Portfolio Building $350,000 $374,500 $400,715 $428,765 $458,779 $490,893 $525,256 $562,024 $601,365 $643,461 $688,503 $430,000 $492,307 $526,768 $563,642 $603,097 $645,314 $690,486 $738,820 $460,100 $790,537 $510,000 $545,700 $583,899 $624,772 $668,506 $715,301 $765,372 $818,949 $590,000 $631,300 $675,491 $722,775 $773,370 Pre-tax equity : $1,281,197 Post-tax equity: $983,319 Total Value Debt Capital Growth Rate $620,000 $663,400 $709,838 $3,781,197 $2,500,000 7%

18 Portfolio Building Year Property 1 Property 2 Property 3 Property 4 Property 5 $688,503 $790,537 $818,949 $773,370 $709,838 $736,698 $788,267 $843,446 $902,487 $965,661 $1,033,257 $1,105,585 $1,182,976 $1,265,785 $845,875 $905,086 $968,442 $1,036,233 $1,108,770 $1,186,384 $1,269,430 $1,358,291 $1,453,371 $876,506 $937,614 $1,003,247 $1,073,474 $1,148,618 $1,229,021 $1,315,052 $1,407,106 $1,505,604 $827,506 $885,431 $947,411 $1,013,730 $1,084,691 $1,160,619 $1,241,863 $1,328,793 $1,421,809 $759,527 $812,694 $869,582 $930,453 $995,585 $1,065,275 $1,139,845 $1,219,634 $1,305,008 Pre-tax equity : $4,938,186 Post-tax equity: $3,790,057 Total Value Debt Capital Growth Rate $1,354,390 $1,555,107 $1,610,996 $1,521,335 $1,396,359 $7,438,186 $2,500,000 7%

19 Year Property 1 Property 2 Property 3 Property 4 Property 5 $1,354,390 $1,555,107 $1,610,996 $1,521,335 $1,396,359 Portfolio Building $1,449,197 $1,550,641 $1,659,185 $1,775,328 $1,899,601 $2,032,574 $2,174,854 $2,327,093 $2,489,990 $1,663,964 $1,780,442 $1,905,073 $2,038,428 $2,181,118 $2,333,796 $2,497,162 $2,671,991 $2,859,000 $1,723,765 $1,844,429 $1,973,539 $2,111,687 $2,259,505 $2,417,670 $2,586,907 $2,767,991 $2,961,750 $1,627,829 $1,741,777 $1,863,701 $1,994,160 $2,133,751 $2,283,114 $2,442,932 $2,613,937 $2,796,913 $1,494,104 $1,598,691 $1,710,600 $1,830,342 $1,958,465 $2,095,558 $2,242,247 $2,399,204 $2,567,149 Pre-tax equity : $12,132,038 Post-tax equity: $9,311,339 Total Value Debt Capital Growth Rate 2044 $2,664,289 $3,059,131 $3,169,072 $2,992,697 $2,746,849 $14,632,038 $2,500,000 7%

20 The Media

21 Lesson #4

22 Research Methodology BLUE WEALTH INDEX

23 RejecLon Rate 76.8% 23.2% Rejected Approved Rejected Approved

24 This means that 3 out of every 4 properles are not worthy of your investment!

25 Macroeconomic Factors 1. Employment & Economic Growth 2. PopulaEon & Demographic Changes 3. Infrastructure & Govt. Spending 4. Supply & Demand

26 Macroeconomic Factors 1. Employment & Economic Growth 2. PopulaEon & Demographic Changes 3. Infrastructure & Govt. Spending 4. Supply & Demand

27 Demographics The current Australian populalon is million; For the first Lme in nearly 100 years unmarried Australians are in a majority; In the past decade, single parent families have risen from 14.5% to 15.9%; Almost one million children live with one parent; 22.6% of Sydney households contain only one person (1.89 million Australians live alone). Sydney has the highest housing densiees in Australia with 25.8% of people living in high density dwellings

28 5.0 Demographics Average Australian Household Size

29 Macroeconomic Factors 1. Employment & Economic Growth 2. PopulaEon & Demographic Changes 3. Infrastructure & Govt. Spending 4. Supply & Demand

30 Infrastructure Northern Territory $2 Billion expansion of Gove Refinery creaeng 1,700 jobs $1.7 billion Ghan Railway project just completed $1.1 Billion Waterfront Project generaeng 1,000 jobs $3 Billion Darwin LNG Gas Plant creaeng 2,100 jobs PotenEal of 20,000 jobs at $7 billion Sunrise Gas field

31 $60.4 Billion Of Projects In Brisbane! $3.4 Billion Airport Link $1 Billion Queensland Children's Hospital $3.4 Billion Eastern Busway $3 Billion RNA (Ekka) Redevelopment

32 Lesson #5

33 Picking the Right Market

34 Property Clock

35 Property Clock 2012 Canberra Melbourne Sydney Adelaide Darwin Brisbane Perth

36 Recent RecommendaLons AugusLne Heights Located in the fast growing Springfield region 30km from Brisbane CBD House & Land from $430,000 Current yields circa % Lend Income Gross Yield Holding Cost* 90% $80, % $3/week +0.5% Int $27/week +1.0% Int. $52/week *Holding cost is post tax

37 Recent RecommendaLons - Parramapa Two min walk to Parramapa s Church St precinct Great value: $440,000 Zero vacancy Current yields circa % Lend Income Gross Yield Holding Cost* 90% $60, % +$17/week +0.5% Int $9/week +1.0% Int. $35/week *Holding cost is post tax

38 Lesson #6

39 How The Australian Tax System Supports Property Investment

40 Tax Benefits NegaLve Gearing Tax deduclons Expenses related to the income producing asset Interest Loan Costs Travel/AccommodaLon DepreciaLon

41 Lesson #7

42 New Vs Old

43 New Vs Old The advantages of each New building: Reduced maintenance costs Lower vacancy rates Higher tax deduclons Old building Price Gross Yield Financing

44 New Vs Old - So Who Pays What? Two similar properles, purchase price $350,000 OLD Tenant Taxman You NEW Tenant Taxman You 26% 21% 6% 17% 57% 73% $32/week $149/week

45 On average the holding cost for a new property is one third of the holding cost of an old property

46 Lesson #8

47 Have your cake and eat it too

48 Buying Vs RenLng

49 The Great Australian Dream Purchase a quarter acre block in the suburbs Clear idea of where we want to live usually too expensive, even the less desirable suburbs Have to bite the bullet isn t that what everyone is supposed to do? Spend the next years on the back foot paying off a massive mortgage

50 Buying John & Mary: Inner city suburb they want costs $700,000 Have to buy inferior neighbouring suburb for $600,000 Use savings of $90,000 for deposit plus costs 25 year principle & interest loan of $540,000 Costs $840/week

51 VS

52 RenLng and InvesLng Kate & Peter: Rent in inner city suburb they want costs $550/week Buy an investment property somewhere else $450,000 Comfortably borrow $405,000 costs $60/week Borrowing capacity allows for two properles Now have $900,000 in assets coseng them $120/week Living in their preferred suburb total cost $670/week

53 + TWO INVESTMENT PROPERTIES

54 The Great Australian Dream John & Mary are living in the suburb they don t want to, have $600,000 worth of assets CosLng them $840/week - $170 MORE THAN Kate & Peter When both sets of assets double in the coming years: John & Mary will have $1,200,000 Kate & Peter will have $1,800,000

55 The Great Australian Dream Clearly the great Australian dream isn t what it was cracked up to be It is now about smarter decision making which Kate & Peter made

56 The Super RevoluLon

57 Please Stand Up

58 Sit Down If: You have an SMSF Stay Standing If: You know your super balance within $10,000 You know the company that manages your super You know the surname of the person who manages your super You ve spoken to that person You ve physically met that person You know the fees you ve paid in the last five years

59 What Is Happening In A Picture Work Income 9% Colonial AMP Perpetual Industry Super Fund

60 The Current Super Environment There are approximately 16 million super accounts in Australia The majority (60%) make no choice - default fund The Australian superannualon industry lost $18.5 billion of its clients' money in the last financial year Source: ABS, ASFA, APRA,

61 The Current Super Environment Retail super funds have returned on average 2.9%p.a. over 10 years Source: ABS, ASFA, APRA,

62 Of the 83 default super oplons available ( ), 51 delivered negalve annual returns After fees and taxes

63 6,000,000 Australians would have been beper off keeping money in cash at its face value ( ) than in their super After fees and taxes, returns are on average

64 Where Is Your Money?

65 How Much Is Enough?

66 84% of all Australians relre on less than $21,000 a year Source: ABS

67 Dependence On Pension Pension Self- Funded ReLred for 0 4 Years ReLred for 5 9 Years ReLred for Years 44.8% 37.6% 33.9% 55.2% 62.4% 66.1% ReLred for Years ReLred for More Than 20 Years 27.1% 26.5% 72.9% 73.5% Source: ABS

68 What if we had put our Super money into property?

69 (Darwin v Balanced Fund) (10.4x more growth) Darwin Median Housing Price (Index 100) Colonial First State Balanced Fund (Index 100)

70 (Sydney v Balanced Fund) (3.8x more Growth) Sydney Median Housing Price (Index 100) Colonial First State Balanced Fund (Index 100)

71 So how does our Super invest in property?

72 Through A Self- Managed Super Fund (SMSF) You have control of how your money is invested You can invest across asset classes You can have up to four members

73 The SMSF Environment The fastest growing sector of the superannualon industry Over 184 people join PER DAY The SMSF industry is now worth almost $440 BILLION There are over 913,000 Australians who are members of SMSFs It s increasing at over 16,000 people per quarter Almost 3,000 new funds are established every month Source: ABS, ASFA, ATO Self-Managed Super Fund Statistical Report June 2012

74 The SMSF Environment In 2007, legislalon was changed to allow SMSFs to borrow money Low tax rate on pre- relrement income - 15% income tax, 10% Capital Gains Tax There are restriclons on how much you can put in Assets are protected from bankruptcy Buy a property in your Super and sell it TAX- FREE in reerement

75 Take Control If you (and your spouse) have $100,000 or more in Super, you could: Establish an SMSF Invest in your choice of real estate Borrow up to 80% of the purchase price

76 Take Control If you (and your spouse) or clients have less than $100,000 in Super, you could: Establish a fund with up to four members - parents, partners, siblings, friends etc Work out a plan of how to get there Lend your Super Fund money

77 So What s Next?

78 Some Basics q Could you save $100/week? q Do you have a steady job? q Are you willing to invest Lme to create wealth?

79 MeeLngs MeeLngs are complimentary Make the Lme with your partner In business hours At Sydney Olympic Park MeeLngs are in Lme blocks: 7.30am 9am 12pm 3pm 5.30pm

80 The Blue Wealth Process We want to work with commiped clients For those of you who request it, you will be called within 48 hours A personal meelng Your situalon will be stress tested Ongoing relalonship

81 How many of you have learned something tonight? 1. Know Your Numbers 2. Leverage is powerful 3. Compounding creates magic 4. Find out where to buy 5. Buy the right property 6. Consider your Super 7. Execute your plan

82 Who Wants To Be Wealthier Tomorrow Than They Are Today?

83 Request A MeeLng