Avoid living a difficult life on the pension!
- Current pension is $22,178pa or $426 per week and it’s the main source of income for 67% of Australian retirees
- A Super Balance of $400,000 invested at 5% return would only provide an income of $20,000pa or $384 per week – less than the pension!!
- The average Super balance for males aged 60 to 65 is $114,000 and for females is $94,000 (Deloitte 2014)
- Only 1% of Australians retire on more than $50,000pa
Is this the life you want to live?
Or would you rather a life you love?
Invest for capital growth and compound growth!
Property in Australia has unofficially grown on average 10% per year in metropolitan Australia for the last 150 years, despite natural disasters, recessions, stock market crashes, wars, depressions and changes of government. When we analyse properties for clients, we use a conservative 7% historical growth rate. This essentially means that property prices will double approximately every ten years.
Leverage is the key!
Property allows you to leverage yourself more than any other asset class, giving you the opportunity to maximise capital growth over time. Banks will typically lend you 90% or even 95% of the value of a property (depending on your financials and the banks criteria).
Another major factor why property is a favourable investment option is that there continues to be strong immigration into Australia and this puts demand on the supply of housing. The population is typically increasing faster than homes are being built. With immigration numbers forecast to be very strong and with a significant increase in new born babies combined with limited housing supply, the increase in demand will continue.
Utilise your equity!
If you have owned your own home for a few years, chances are you have managed to accumulate some equity. This means that the value of your home is now significantly greater than the loan that you owe on the property. If you don’t use this equity then it in financial terms it is like hiding this money under your mattress at home and never getting any return on it. If you can utilise this equity to buy more property, then you have effectively leveraged your assets to create more wealth and are now playing the game that all wealthy people play.
Just think for a moment on how much your home has gone up in value and then ask yourself, “What if I could have bought 7 properties when I bought my first? How wealthy would I be right now?” The answer to that question should be enough to help you make a positive move towards building a property portfolio. According to the Australian Bureau of Statistics (ABS), the median house price in Brisbane in March 2002 was $185,000 and in September 2010 the median house price was $460,000. If you held 7 investment properties during that period, then your net worth would be $1.925million, and you could retire in the top 1% of wealthiest Australians.
If you don’t own a home or property yet, then the above paragraph should explain why you getting yourself in the market might be a great idea. Always remember that there is always the option of getting an investment property before you buy your own home. In fact you may never need to buy your own home depending on your circumstances. At Property For Wealth this is just one of the many strategies we may suggest that suits some people who don’t want the burden of a huge mortgage.
What is the Process?
It is very simple to use our services. We want to fully understand your reasons for investing, which makes it a very easy process for both experienced and inexperienced investors.
Our process involves:
- Discussions about personal wealth goals and retirement plans
- Investigating your capacity to invest in a secure way
- Formulating a strategy and discussing entities and financial structure
- Assessing your financial obligations and analysing cash flow
- Discussing what types of property will be best for your circumstances
- Research and presentation of properties to be considered
- Property contracts, financing and conveyancing
- Settlement and ownership of the property
- Depreciation reports and tax variations
- Property management and tenant selection to achieve the best possible rental return
If you are ready to get started with building your property portfolio, or perhaps you would like to find out more or have a chat about your options, we would value the opportunity to discuss your individual goals and the service Property For Wealth can provide.