3. • Diploma of Financial Services
• Certificate of Mortgage Planning
• Accounting Apprenticeship
• Financial Planner
• 26 Years experience in Finance Industry
• Very experienced Property Developer & Trader.
• Business Owner myself for 13 years
• Finalist Business Women of the Year 2006
• Equipment Finance & First Home Owners
• Work very closely with Accountants and Key Business advisers to
ensure borrowing structure is appropriate and tax effective!
Helping you and your clients make more profit
and pay less tax!
Specialist Area
8. Vehicles and AssetsWhat information will I need?Vehicle & Assets
• Passenger cars
• Light commercial vehicles
• Heavy trucks and trailers
• Forklifts
• Mining vehicles and equipment
• Construction vehicles and equipment
• Manufacturing plant and equipment
• Printing presses and associated plant
• Electronic and computer equipment
• Office fit-outs for professionals
• If you’re not sure – call us
9. • ABN and GST Reg’n for minimum 24 months
• Home Owner with equity (no mortgage required)
• New or used Vehicle
• Must be from a Licensed Dealer
(no more than 5 years old)
Low Doc Vehicle Funding
16. $31/wk = New leather lounge
$52/wk = New kitchen
$77/wk = New boat
$170/wk = New 4W Drive
Spending the spare money
17. $31/wk = Lounge
$52/wk = Kitchen
$77/wk = Boat
$170/wk = 4W Drive
= 1 Townhouse
= 1 small house
= 1 big house
= 3 houses
Investing the spare money
18. • No Margin Calls
• Property market not as volatile to downward trends
(still possible to have reductions)
• Income from rent can be enough to cover the
interest costs
• History shows strong capital growth
• Higher LVR’s available (banks love lending on
property)
Why Property can be better than
Shares for Gearing
20. • Borrowing to fund business purchase
• Purchase of Business Premises (stop paying rent)
• Self Managed Superfund Borrowings
• Funding Working Capital requirements
• Asset Finance – ie Motor Vehicles and Plant and
Equipment
• Debtor Financing
• Stock Funding
What do we do for Business Clients?
21. 1. Interest – Overdrafts/Term Loans/Commercial Bills
2. Lease Payments – Leases & Chattel Mortgages expiring
3. Rent Payments – Loan to purchase freehold
4. Rental Income Received - Investment property loan, caompetative?
5. Storage Shed Fees – Loan to purchase shed
6. Merchant Fees – is it competitive rate?
7. Bank Fees & Charges – are you paying to much
8. High Motor Vehicle Repairs – Upgrade vehicle – Chattel Mortgage
9. Workcover – Large premiums can be spread over 12 payments
10. Superannuation Payments - Self Employed Deduction
What to look for on your P&L !
22. Business Lending at Home Loan Rates
Assume: Business Loan $300k secured by Home
Interest Rate
8.2%
Fees Approval (1%)
$3,000
Fees Loan Admin
$1,650
Interest 6.79%
Savings $4,230 pa
Fees Approval $500
Fees Annual $120
Total Savings (yr 1) $8,260 yr1
Ongoing $5,760 pa
Comparison of Benefits.
23. We are in the business of
helping people to realise
their personal and business goals
and create wealth
through property and
saving on their loan facilities.
That’s why I love what I do!!
Any Questions?
24. Wize Up to your best Financial Decision!
www.loanwize.com.au
Editor's Notes
NotesWhy does a $360,000 property cost you so little with the annual cost of $5,768.10 being about $111 per week? Because two other people are contributing to the major portion of the loan interest payments and expenses of $32,045! Firstly, the tenant pays $18,265 in annual rent and then the taxman gives you a $8,011 tax refund. What’s even better is that you don’t have to wait until the end of the year for that tax refund. It can be claimed back each week as a reduction in tax taken from your pay as allowed under Section 15-15 of the Tax Act. Then you the investor is left to make up the deficit of just $5,768 or 18% of the total expenses. ($32,045 - $18,265 - $8,011 = $5,768). This equates to just $111 per week - less than $16 a day. And this is only in the first year. As time goes on, the cost to the investor decreases as rents increase.ReferencesMore Wealth from Residential Property, pp 193-195, p 200.
NotesOne of the most often asked questions is “How much money can I borrow?” Two factors primarily determine this. Firstly, a financial institution requires some form of security, preferably a residential property, to advance a loan. A measure of the level of security is called the LVR or Loan to Value Ratio.Secondly, the lender must be convinced that the investor can comfortably make the repayments on the loan. A measure of this level of serviceability is called the DSR or Debt Service Ratio.ReferencesMore Wealth from Residential Property, pp 147-156.
NotesHow do lenders measure LVR and DSR? Point out that there is no need for investors to get bogged down in detail.Simply point out the formula for each of them.The LVR is measured by the relationship between the total loans to the total value of the security offered, usually a combination of the family home and investment properties, including the one being purchased. And the DSR is measured as the relationship between the total loan payments (including home loan payments and car loans etc) and the sum of roughly 30% of incomes plus 80% of the rent, though this may vary with lenders.It’s probably a good time to suggest that either your PIA software will calculate this for them or a lender can assess their borrowing capacity for them.ReferencesMore Wealth from Residential Property, pp 147-156
NotesWith a short time frame of just a few months in which a property is bought and sold, timing is critical. Consequently, for property traders and speculators, buying and selling at the right time can make or brake the deal. However, for long term investors, timing is less important. Many financial commentators try to predict the best time to buy property but it is all too easy to sit back and do nothing and then miss the boat altogether. It is best to get in at any time and hold on for the long term. The best time to buy a property is not when you judge the time to be right - because this is crystal ball stuff - but when you can afford to.ReferencesMore Wealth from Residential Property, pp 101-108
NotesTiming should have more to do with an individual’s finances than the economic clock. An investor should be buying an investment property when he can afford the $52 (on average) that it costs to buy it. This is the average cost when the investor uses the equity in their own home instead of a deposit. The tax benefits and rent then help pay for the investment property. This slide should be a good lead-in to informing investors that you, the agent, can show them how this is possible. The PIA software can be used to produce a detailed report showing investors how affordable an investment property really is. You can point out that the property might be $100,000 and the cost only $6 per week or $300,000 and the cost $80 per week. But no matter which way you look at it, the cost of buying an investment property is cheap.If buying an investment property is so cheap, then why can’t everyone afford to? ReferencesMore Wealth from Residential Property, pp 194-195, PIA software
NotesAlthough buying an investment property is relatively cheap, the reason why most people cannot afford to buy today is not because they have a high mortgage on their own property, not because interest rates are high, but because they have other priorities. These in themselves do not cost much, but together consume most of the available spare money.The costs highlighted in this slide are the hire purchase/lease costs of the typical consumer items. Most people will identify with at least one of these. The next slide shows the alternative to spending all this spare money on consumables. ReferencesMore Wealth from Residential Property, pp 225-226.
NotesIn this slide we present an alternative to spending all the spare money on consumables. It really drives home the fact that buying an investment property is no more expensive than buying a lounge or a car but it is the cost of consumer debt that prevents most people from buying an investment property.It should also be pointed out that after buying an investment property, the joys in life still continue. It is not a case of giving up everything nice, but a case of setting a priority. Yes you can have a four wheel drive now, but the boat may have to wait. Yes you can have the new kitchen now, but you have to do without the “you-beaut” leather lounge. People can afford to buy an investment property when they set a priority system in place. Invest first - spend later. ReferencesMore Wealth from Residential Property, pp 225-226
