Open Developments | Company
Open Developments
Phone: +61 1300 649 564
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25.01.2022 Interest rates kept of hold by the Reserve Bank of Australia. Most economists tipped a rate cut, showing how difficult it is to accurately 'predict' the market and monetary decisions. Stay focused and disregard the noise. Historically, it generally takes 3 months for the effects of fiscal policy to alter behaviour, so a 'wait and see' approach appears sound.
24.01.2022 What's on for the long weekend? The guys are continuing to prepare for Tough Mudder, Tyson is house hunting, there'll be a few Sunday sessions going on, Michael's at a training camp in Mount Beauty and Cass is probably looking forward to KFC at some point!
21.01.2022 Streamlining processes and maximising cash flow are two critical factors to control as a smart investor. This week's property investor tip looks at a simple, yet very effective way to do this - by paying your builder's deposit prior to settlement, ideally 2 months before if possible. Most investors who buy house and land off the plan wait until the land has settled prior to thinking about the construction process. Did you know that even before land is registered the builder c...an gain access to the site and commence some preiminary works such as soil testing and get their insurances arranged? This not only redues the time between land settlement and the construction start as most of the work is already done, it also saves you siginficant amounts of bank interest. Let's assume the purchase price is $400k. If the builder's deposit is 5% of a $200k build, then let's say you pay them $10,000 two months prior to settlement. This will cost you, at a 7% interest rate, about $115 in interest over the 2 months. Compare that with waiting until the land has settled, meaning $210k has been drawn down to cover land purchase, stamp duty and costs. Add the builder's deposit at this point and interest over 2 months on $220k will cost you $2565. So just by thinking ahead and streamlining processes, you've saved $2,450 in interest. That's a nice summer holiday! Was this tip useful? Anything else you'd like to know about? We'd love to hear your thoughts and feedback.
19.01.2022 Welcome to the first instalment of Open's weekly tip for property investors! It will appear every Monday and is designed to help share a few little gems that you may not be aware of to help you maximise the wealth you build. Is this a good idea? Anything you'd like to know more about? We'd love your feedback. This week's tip: Ensure you review your rents every 6 months. This maximises the income your property can generate by making sure you're capitalising on any rental market increases as soon as, or shortly after they happen. You may be wondering 'what if I have a 12 month lease in place?' It is possible to insert 6 monthly rental review clause at the time of taking out a lease agreement with a tenant. Cashflow is key! Have a great week.
19.01.2022 Further indications of the trends we've been discussing lately. Particularly relevant for future growth is that affordability is as favourable now as it has been for a decade.
19.01.2022 Weekly property investor tip: Even though property investments work their magic over the long term, don't forget to continually monitor them. It is important to remember that one property is not going to make you wealthy, so you're not ready at this point to start out then kick back and relax just yet! Whether it be your cash flows, your loan products, seeing good sales in the area that can increase your valuations or whether it be just understanding your borrowing capacity, ...doing all of the above on a 3-6 monthly basis (at least) can really help propel you forward. Here are a couple of examples: When interest rates dropped, there were opportunities to convert to a fixed loan at under 6% for 3 years through one lender. This may not be for everyone but if you're in the market to fix, this deal wasn't available 3 weeks later. Secondly, two valuations were done on the same property two weeks apart and they came in $30k different. Now clearly the market won't move $30k in a fortnight but the second valuation was higher as there was one comparable sale in that period which pushed the valuation up. Always looking for useful comparable sales is fundamental. If you're wondering how you can tweak the knobs on your current portfolio (even if it is just your own house), please comment on what you'd like more information on. Have a great week!
16.01.2022 Weekly tip for property investors #2: Ensure that you have a depreciation schedule completed for your property. Any property constructed after 18th July 1985 can have the depreciation on the structure and fittings claimed as a tax deduction. These different components depreciate at different rates and can be assessed using two different methods. To ensure you maximise the tax deductions avaialble to you, ensure every property you own has a depreciation schedule as part of a professional Quantity Surveyor's Report. We make it easy for you by having one included as part of our service, but if you've done it yourself in the past, ensure you have this essential item.
16.01.2022 Positive news to start 2012 on the First Home Buyer front. Since Nov 2011, FHB numbers are up on the back of interest rate reductions and renewed confidence. This is positive not only for increased demand in the affordable end of the market, which drives growth, but also for upgrading owner occupiers knowing they can look to sell with more potential buyers of their homes as this effect filters through the market.
16.01.2022 Would $100,000 per year tax free give you the financial freedom you want? If we took the approach of posting every article we saw about property, the market or anything related you'd never have time to read them all. That's why we only post the most useful, informative and educational of them. If you're investing in property, thinking about investing in property or just interested in what makes successful investors successful, this is a must read!... Well written, in simple English explaining the power of compound growth over a long term investment strategy and how to get your hands on the money you've made to fund your lifestyle. We agree with everything written about, but know you can do better than 4% yield :-)
13.01.2022 As those who have met with us know, we say that investing successfully is not difficult but predominantly about mindset and cashflow management. This is a great article written by another successful investor about what's really important when growing wealth.
12.01.2022 Way to go Melbourne. Even though we got marked down for climate, we're still number one! Australia dominating the Top 10 of the world's most liveable cities.
12.01.2022 The next weekly instalment of our property investor tip! Last week we talked about continually staying tuned in to our investments as even though they work over the long term, treating them like your own business separates the successful from the not as successful. This week's tip is along the same lines and motivated by talking with 3 different investors last week. This week's tip: Even with a 12 month lease, ensure you have a 6 monthly rent review clause.... Your tenant has signed up for another 12 month lease. Great! Consistent cashflow! However, given rental shirtages around Australia rents can increase quite rapidly in a market in a short space of time. A 6 monthly rent review clause allows you to review, and raise, your rents half way through the 12 month lease. You do need to specify a cap at the start of the lease that the rent may rise by, but at least it means you're maximising your cash flow without having to wait the full 12 months. Gradual rent rises are also more likely to be accepted by a tenant as being reasonable. Enjoy your week and if you've had a good experience maximising your cash flow, please share it!
11.01.2022 Weekly tip #3: Remember to leverage tax into appreciating assets. "My accountant told me I pay too much tax..." Most of us have probably heard this at some point and if not, we've probably thought it ourselves. This is not surprising given the amount of tax annually on the average Australian income of $72,228 is over $15,000. Yes, it's a lot!... Some people choose to leverage tax into investment property or other investments. Others choose to upgrade the car. Which is best? Cars lose value over time so all you're really doing by putting tax benefits into depreciating assets over time is losing more money. Investments grow in value over time, so remember to be a Smart Investor and leverage tax benefits to hold appreciating assets using as little money out of your pocket as possible. The very reason you don't buy new cars, is why we buy new houses - the depreciation on the house is tax deductible! Was this tip useful? We'd love your feedback! Have a great week.
09.01.2022 Congratulations to all four teams who turned it on down at Phillip Island over the weekend at Tough Mudder. A few sore bodies and few hundred stories of bravery and strength floating around the office today...
08.01.2022 Who struggles with motivation? Especially in winter? Yes, most people do but overcoming that is easier than you think. Whether it is motivation to work hard, spend more time with your family, continue growing your wealth or to get fitter, this is a great read on easy tips to get ahead and feel great for it! If you have a tip of your own, please share it. : http://tristanwhite.com.au//how-motivated-people-get-so-m/
07.01.2022 To all of our clients, partners, family and friends, we wish you a very happy Easter and hope you enjoy the break. If you're travelling, please drive carefully. Stay tuned next week as we report on Cassandra's next attempt at mastering the art of wakeboarding. We're hoping there's a video!
06.01.2022 Merry Christmas to everyone! From the team at Open Developments, we hope you have a wonderful festive season and look forward to bringing you some more valuable insights in 2012!
05.01.2022 This week's property investor tip of the week draws on Cassandra's experience in property management and optimising the return on your investment. Professional photography where real estate is concerned is most commonly used by agents looking to maximise the appeal of the home they're selling to potential buyers. Why not do the same for your property targeting potential tenants? Not only will using professional photos enhance the marketing of your property and assist you in g...enerating more interest and therefore placing a tenant sooner (and possibly at a higher rent), they can be used in the future should the property need to be re-let. Increasing the demand for your property can only ever be a good thing! Have you used professional photos to good effect in the past?
04.01.2022 Tax time is upon us! The attached article is a great read on how to avoid the spotlight of an ATO audit where property deductions are concerned. For those of you aware of our finance structure utilising a line of credit against equity for deposit and costs, remember a key benefit of that is transparency that those funds are for investment purposes and therefore the interest is tax deductable. Helps you to easily avoid red flag #2. http://www.yourinvestmentpropertymag.com.au//danger-16-mis
03.01.2022 The GDP figures announced today show a 1.3% increase in the March quarter contributing to a total growth in Australia's gross domestic product (GDP) of 4.3%. You wouldn't believe it given all the negativity around. As we've said before and we'll say again, there is global concern about Europe. In Australia though, we have minimal exposure to this market as 70% of our exports are to Asia. Our banks are profitable and highly rated amongst the worlds best. They employ some of t...he smartest economic minds as economists and for the best part of the last 12 months, several economists predictions have been proved wrong. They're not bad at their job, they're dealing with an emotional market place where rational thought isn't taking place. Take for example the significant share market reduction last week. The only thing that changed from one day to the next, in real data terms, was the release of the US unemployment data. Not enough to warrant such a significant drop by any stretch on it's own but due to 'fear' billions were wiped off the value of world markets. So remember the big picture. Remember the opportunity given high population growth and an undersupply of housing. Remember our low employment rate and inflation under control. And remember the opportunity just got better with the rate reduction yesterday as it costs less to hold a property. We take education very seriously as it's only fear that holds people back. So if you'd like to understand more about what this means and how you can benefit, visit www.openwealthcreation.com.au now! Sign up to receive our newsletter. Give us a call for a free educational appointment.
03.01.2022 This week's property investor tip: Understand the benefit of using an offset account or redraw facility as opposed to paying down debt. Offset accounts are one of the most useful financial tools you can have. An offset account is linked to a loan account you have and helps reduce the interest you pay on the loan. The bank calculates the interest payable on the balance of your loan account minus the balance in the offset. So for example, you might have a mortgage on your own h...ome of $300,000 but a cash balance in the offset account of $40,000. In this scenario, you're only paying interest on $260,000. Why not just pay down the debt you might argue? By doing that you're only getting the same outcome interest wise but your money has been used. Using offsets, you can have access to the money should you need it without having to pay expensive bank fees to redraw the money. Just more flexibility! Offsets can also improve your overall financial position. It makes more sense to have your $40,000 savings for example in an offset account saving you 7% interest as opposed to a 'high interest cash account' earning you 4.5%. If you think this structure could benefit you, we can point you in the right direction with finance experts who can help.
