What Time Is It On The Property Prosperity Clock?

I am often asked by people as to where I think the Gold Coast property market is on the “boom-bust” cycle and I invariably answer something like this: Property is subject to cycles but the real key is to examine the “drivers” of a cycle and when it comes to residential property there are three key drivers: 1.  Population growth 2.  Ability of the “population” to spend and 3.  Their overall confidence to do so.

As I reported last month, my chat with Tony Pearson the Head Economist for the ANZ Bank gave me the economic data to back up what  I am seeing in the marketplace and that is there is spending ability and why shouldn’t there be with near full employment.

Plus, the confidence to spend is still extremely strong.   

Which leaves the very important driver of population growth and in this regard we are just so fortunate to have the natural assets we do on the Gold Coast...people are continuing to flock to the Gold Coast both to visit and to live. As the tourism advertisement says “Where Else But Queensland?”

Okay...it’s time for me to stop being a politician and to declare my position.

Where are we on the Boom-Bust cycle?

We are trending upwards and have been since late last year and by the way, some of the price moves have been impressive.

My brave call is that, barring a savage increase in the interest rate, we have a small run in front of us, though the wise investor will keep a watchful eye of the housing affordability index.

Acacia Centre Booming!

Certainly, we can report strong investor interest at the moment as our Acacia Centre project at Robina, where we are the exclusive agents, achieved a stunning 25 sales and close to $10,000,000.00 for the month of July. 

It is tremendous value for money when compared to the other projects in this area, and it’s also a great negative gearing proposition because of the substantial tax advantages through depreciation deductions. By the way I think this is an overlooked and/or misunderstood advantage for most investors as I explain in a later article.

Have a great month and whether you are buying or selling we can help you achieve your objectives.

Kind regards,

 

 

Alanah Day

Managing Director

 

Planning For A Possible Interest Rate Rise

The financial papers are full of speculation on this subject with the majority of “gurus” punting on an interest rate rise...the question is when. Is it before the lection or after?

And, in some scenarios over a longer period, there is a growing band of advisors who suggest that in a year’s time, interest rates might have moved between .5% to 1%.

This is all the more reason to seriously review your current financing arrangement and compare it with what’s available in the market place. Naturally you will do this is in conjunction with your financial advisor and we’re sure you’ll look at other important considerations apart from the rate offered.

For instance, we’ve noticed a few canny investors now opting for fixed interest money; no doubt they are punting on the interest rate going for an upwards “mini-ride” over the next few years.

The internet is a great place to start your research on the subject of finance and interest rates; a favourite site of ours is www.infochoice.com.au Another site worth visiting is www.cannex.com.au

By the way, another website you should visit from time to time is the Australian Securities and Investments Commission www.asic.gov.au The ASIC site provides a wealth of information on how to invest with confidence, and offers on-line searches of the National Business Names Index. It’s not bad advice to visit this site before you invest in property, shares or anything else....and particularly so if you are considering buying property from one of the slick “marketeers” who adorn rogues gallery at the ASIC site.  

Depreciation On Investment Properties Represents Massive Tax Savings

Firstly, let me state upfront that when it comes to taxation or investment matters, you should always seek the opinion of your professional advisor/s. That said, I’ve had many a discussion with “bean-counters” on the subject of depreciation claims and their thoughts concur with mine.

Of course, the beanies have been trained to say that depreciation is a charge to recognize the use of a property, whereas I say that it is also a damn good tax deduction for no cash outlay...and let me demonstrate my point.

Presently, our Acacia Centre project has fully costed depreciation schedules indicating depreciation deductions in the initial years of approximately $14,000 a unit. Please understand that this deduction will reduce your taxable income by this amount whereas you haven’t had to actually put your hand in your pocket to expend the funds, right.

Now, the following are the tax rates for the current financial year (to which should be added 1.5% for the Medicare Levy):  

$30,001 – $75,000	$3,600 plus 30c for each $1 over $30,000
$75,001 – $150,000	$17,100 plus 40c for each $1 over $75,000
$150,001 and over	$47,100 plus 45c for each $1 over $150,000

So, the value of the $14,000 depreciation deduction to a taxpayer whose taxable income exceeds $150,000 is a massive $6,510 ($14,000 multiplied by 46.5%).

That’s $6,510 that the Government will give you...and how much did you actually expend from your pocket to get that extra tax advantage? Nothing.

If this appeals to you and it certainly has for myself and my fellow Director, and you are looking for another investment property...contact me or our site office and we’ll arrange an inspection of the site and the display unit. Alternatively,

Simply Click on the 1300 Robina image below to immediately register your interest!

 

A Peep Inside The Tent Of Future Trends

According to the recent ABS Census results, 31% of the Australian population are now aged 50 or more. Yes, we are an aging population and this will have an affect on the design of homes in the future; a major issue been that of “access”. The home of the future will need to be access friendly for a frailer, aging population.

With this in mind, the Queensland Department of Housing with the support of the Real Estate Institute of Queensland has introduced a new service.

The Department is encouraging Brisbane Real Estate Agents to participate in a trial to promote home access information. The trial launched in July is expected to run until late 2008.

As you can imagine, the access-friendly home will be a sought after commodity and so you can expect to see property advertisements promoting this matter.

What are Access Features?

The Queensland Department of Housing considers the following to represent access features: 

• At least one entry into the property with no more than three steps or if there may be a ramp, elevator or lift allowing entry into the home.

• From this entry, the kitchen, living room and at least one bedroom, bathroom and toilet are all on the same level and a resident will not need to use internal steps or stairs to enter or move between these rooms.

• If the toilet is within the bathroom and if the bathroom is step-free.

• The width of the narrowest door (ie width of actual door, not doorway) leading to the rooms mentioned above.

So, if you are thinking of doing a renovation, think access.

Meet Our New Team Members

Vicki Jackson

Vicki is the newly appointed Manager of our Property Management Division and what a positive dynamo she is. With over twenty years experience in property management and a strong systems background, she is rebuilding the way we operate internally with a total focus on offering a better and faster service to landlords and tenants alike.

She has already begun to make massive changes and people, processes and systems that don’t conform to THE GOAL are been purged. 

Vicki expresses THE GOAL like this and she, and us, expect to be held accountable to it:

Rod Kidd

As many of you would now know, Rod Kidd is our newly engaged Customer Service Officer. Already, Rod has spoken to just about every one of our landlords and tenants with a view to getting suggestions on what we can do to improve our performance.

Rod and Vicki work closely together to ensure we are moving forward on our promise to be the firm that provides solutions and not excuses.

What Does Clean & Fair Wear & Tear Mean At The Final Inspection?

By Vicki Jackson, Manager of the Property Management Division

Folks, this is the first of my regular newsletter contributions and my intention is to provide practical insight into what happens in the management of a property, for as you may know, the laws are very detailed and complex these days.

An area of much contention between property owners and tenants is the issue of fair wear and tear. Given that we are presently completing our winter inspections of all properties on our books, it’s a great subject for my first newsletter article...so here goes. 

Carrying out a final inspection when a tenant vacates the property involves comparing the condition report completed at the commencement of the tenancy with the final condition that the tenant leaves the property at the end of tenancy.

Legislation states that the tenant must leave the property in the same condition as it was at the commencement of the tenancy, taking into consideration fair wear and tear.

It is a common expectation by landlords that the property is to be left in a perfect condition as it was at the commencement of the tenancy, without taking into consideration fair wear and tear.

The dictionary definition of clean is: not dirty, free from dirt or impurities, however you must take into consideration fair wear and tear, when determining if the property has been left clean.

The term fair wear and tear is not specifically defined in the Act or the Tenancy Agreement and therefore is open to interpretation. A generalized definition of fair wear and tear is: something that happens during normal use or changes that happen with aging.

So where do we draw the line? This has been one of the ongoing challenges for many years.

It is a challenge that we as property managers have to deal with every time a tenant vacates your property.

Our office has very high expectations and standards when it comes to carrying out the final inspection. Albeit, we are starting to discover that our expectations and standards are sometimes considered above the industry standard and what the legal system (Small Claims Tribunal Courts) considers acceptable, allowing for fair wear and tear.

When determining fair wear and tear the following should be taken into consideration:

• The number of tenants that resided in the property;

• The term of the tenancy; and

• The age of the fixtures and fittings

For example:

There is going to be a greater allowance for “fair wear and tear” if you have a property with a family of four children, who resided in the property for five years and no improvements/replacements were carried out with carpets, curtains and painting of walls etc – compared to a single couple who resided in the property for 6 months where the carpet, curtains and walls were refreshed in the last 12 months.

Areas that may be considered fair wear and tear:

• Holes in fly screens

• Marks on carpets

• Marks on walls

• Marks on curtains

• Insects in light fittings

• Dusty window tracks

• Tears in linoleum or cracks in tiles to name a few

Once again, the above areas will depend on the circumstances of the tenancy.

Our property management department has a reputation for offering people clean well maintained properties to live in.

We will continue to adopt the policy of “if its clean when a tenant moves in, then it will need to be the same when they move out”.

While adopting this policy, it is important for landlords to be aware that in some circumstances you may be required to attend to a “post-tenant” clean if it is considered fair wear and tear.

A well-documented entry condition report will also strengthen our case if a dispute arises at the end of the tenancy.

Meet The Robina Spiderman

Even the Gold Coast Bulletin was interested in the unusual marketing strategies of our very own Lincoln Horder, alias Spiderman.

In stealing a valuable lesson from no less a PR luminary than Sir Richard Branson, Lincoln got valuable media coverage and a swag of listings whilst posing as Spiderman. The local kids line up to get their photo taken and as one parent commented “I’m not selling at the moment, but you are precisely the person I want to sell my property because these days you have to be different to get noticed in a cluttered marketplace."

By the way, Lincoln is selling a line of 6 individual units in Wings (on the site of the old Pink Poodle just south of Surfers Paradise. They a selling for well less than their original listing price and include a substantial furniture package. Call Lincoln on 0415 206 677 to find out more.

                     

Robina Realty Now Has The Largest Dedicated Commercial Division In The Central Gold Coast Region

We’re proud to say that our team of four full time commercial sales consultants ably led by Nigel Bevis is the largest in the central Gold Coast region and right at this moment, they have access to commercial project product in excess of $250,000,000 – and this isn’t counting the recently announced new super office tower appropriately called Rocket which is due for commencement later this year.

The Robina Varsity region is really pulling the professional offices from the older established areas such as Bundall and Southport, so if you’re looking to add to your commercial property portfolio, drop in and have an obligation-free chat with Nigel and his team.

At the very least you will be served a brilliant coffee and be fully briefed on the exciting developments that are underway or about to commence in this boom area. It really is mind-boggling.

By the way, Nigel and his team are fielding enquiries in record numbers at the moment. Sure, we have brilliant marketing programs, particularly using the internet...but it is also a solid indicator of a strong groundswell of investor interest.

Simply Click on the 1300 Robina image below to immediately register your interest!

 

Alternatively, contact Nigel and his team by phone now! on 1300 762 462

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