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Property Education Workshop
- 1. 2 Hour Property Investment Workshop Hosted by Contour Finance NEOCHATS ON PROPERTY 1 www.neochats.com.au
- 2. Our Vision "Imagine a world where every property buyer is empowered to make wise and confident purchase decisions that successfully creates wealth. This is the world we want to create through education, mentoring and our expertise in finding excellent properties that are aligned to your unique and personal goals".
- 3. What We Do Personalised Coaching Education Financing Unbiased, Systematic Property Search Negotiation Have the Buyer’s best interests at heart
- 4. Before you start your search • Mentally and emotionally committed • How much can you afford to buy? • Keep your emotions in check • Know your time frame • How much time and financial resources do you have? What else?
- 6. Your Vision Clarify Goals What are you trying to achieve? What type of risk can you handle?
- 7. Property Vision Cycle YOUR VISION Life Goals 3 Year Property Vision Pathway Immediate Strategy Pick your Partners Focused Search Shortlist & ComparisonMake an Informed Decision Negotiation & Purchase Post Purchase Assessment Define Next Milestone
- 8. Property Vision Cycle YOUR VISION Life Goals 3 Year Property Vision Pathway Immediate Strategy Pick your Partners Focused Search Shortlist & ComparisonMake an Informed Decision Negotiation & Purchase Post Purchase Assessment Define Next Milestone
- 9. Mortgage broker Financial Advisor Conveyancer Accountant Insurance Broker Rental Management Agent Property Specialist/Agent Pick Partners that match your vision Representing YOUR interests • 2 clients that you can call • What is their turnaround time • What experience have they had dealing with properties in your strategy?
- 10. Picking a Mortgage Broker
- 11. Structuring your loans for your Vision Pathway Be forward thinking when selecting your home loan
- 12. Questions you will be asked • Owner occupier or investment • Amount of credit sought • Size of your cash deposit • Interest only, or with repayments • Fixed or variable • Penalties on additional repayments • Lenders mortgage insurance • Cross-collateralize against current property?
- 13. Property Vision Cycle YOUR VISION Life Goals 3 Year Property Vision Pathway Immediate Strategy Pick your Partners Focused Search Shortlist & ComparisonMake an Informed Decision Negotiation & Purchase Post Purchase Assessment Define Next Milestone
- 14. What are your purchase options? Get Educated Pick your advisors Education on property strategies Plan your finance structure
- 15. Apartments Houses Renovation Subdivision Granny Basic strategy concepts Price range Cash flow impact Capital cost Time and resource requirements Location considerations Tenant considerations Tax Currency Pros and Cons Risks House and Land Primary Residence Group Buying Offshore Property Holiday Home NRASHigh Yield PROPERTY STRATEGIES
- 16. www.neochats.com.au 16 3 Year Property Vision Pathway Create a Plan What type of property/s will you buy? How many will you buy? When will you buy them?
- 17. $150k available capital $185 pw savings ~$9000 per year savings $600k in capacity 35% tax bracket Time Poor Conservative on monthly budget and risk Sarah’s Vision To create $150k in capital in 3 years to fund her primary residence What is Sarah’s 3 Year Vision Pathway?
- 18. Property Vision Cycle YOUR VISION Life Goals Immediate Strategy 3YR Property Vision Pathway Pick your Partners Focused Search Shortlist & ComparisonMake an Informed Decision Negotiation & Purchase Post Purchase Assessment Define Next Milestone
- 19. Strategy • Rental apt, t/houses • Rental houses • Off-the-plan apt • House and land • NRAS • Single industry property • Holiday home • Negative gearing • Options • Undervalued & renovate • Granny flat • Long term land settlement • Inside connections • US property Property Investment Needs • Cash flow • Capital growth • Purchase while saving a deposit • First home buyers grant • Affordability • Primary residence • Short term investment • Long term investment • Family reasons • Other Personality • More time and patience • Attention to detail • Low maintenance • More time required • Capital available • Tenant characteristic • Risk tolerance • Reliance on external expertise • More up front hassle • Current tax rate • Personal network • Other Suitable Investment Strategies for You EDUCATION
- 20. Vision to create 3 Year Vision Pathway ANCHOR THE VISION Sarah’s Vision To create $150k in capital in 3 years to fund her primary residence PROPERTY INVESTMENT NEEDS Cash flow Capital growth Purchase while saving a deposit First home buyers grant Affordability Primary residence Short term investment Long term investment Family reasons $150k available capital $185 pw savings ~$9000 per year savings $600k in capacity 35% tax bracket Time Poor Conservative on monthly budget and risk
- 21. Property Vision Cycle YOUR VISION Life Goals 3 Year Property Vision Pathway Immediate Strategy Pick your Partners Focused Search Shortlist & ComparisonMake an Informed Decision Negotiation & Purchase Post Purchase Assessment Define Next Milestone
- 22. FOCUSED SEARCH Search online Call local agents Set up your alerts Visit the properties Check valuation Cost and budget for each property Negotiate the purchase Compare against other properties Strata Report check Research for negotiation Suburb research Location, location, location Conveyancer review contract of sale Building & Pest
- 23. Due Diligence There’s no such thing as a free lunch Be informed of your risks in relation to reward
- 24. The Formula for a Focused Search • Suburb selection • Have all your research sources as favourites • Online search • Call estate agents • Valuation check • Cash in and cash out for each property • Location, amenities, walk score • Flooding • Create a list
- 25. Suburb Research • Follow the infrastructure trail • Urban renewal (planned and organic) • Lifestyle features • Sticky residents • Education and medical infrastructure • Ripple Effect • Infill development • Job nodes • Sea/hill borders • Boom towns?
- 26. Comparing Areas What to look for What does it tell you Performance Price growth per year over the last 10 yrs • Consistent performer • New boom • Been dormant Rental yields Rentals per dollar of property value Whether the suburb is over or undervalued Vacancy rates % of the year property likely to be empty Risk on your cash flow Tenant demand Any trouble finding a tenant Demographic The type of tenant you will get The type of property that is more popular in the area
- 27. What does rental yield really tell you? Rent pw x 52 Today’s property price =Rental Yield St Mary’s = 4.5% Mt Druitt = 5.5% Randwick = 3.2% Kingsford = 4% For every dollar you pay, this is the income you will be receiving. Areas will lower rental yields, tend to be more congested or buyers are willing to pay higher prices to be in that location
- 29. Sources of Information Local City Council Housing Industry Association
- 30. Cannon Hill, QLD Enoggera Army Reserve
- 31. Kellyville, NSW
- 32. Cannon Hill, QLD
- 33. The Formula for a Focused Search • Suburb selection • Have all your research sources as favourites • Online search • Call estate agents • Valuation check • Cash in and cash out for each property • Location, amenities, walk score • The big risks • Create a list
- 34. Step 1 to Property Search
- 35. NUMBERS CHECKLIST Ongoing Costs Upfront Costs Amount Rent PW Stamp duty Mozo calculator Avg rental pw of similar property in the area LMI Depending how much you want capitalised Strata Conveyancing fee ~$1200 estimate Council Depreciation report ~$550 estimate Utilities Finance fees ~$300 estimate Landlords insurance Holding cost (if any) Depending on your mortgage rate Size in square meters Deposit LVR Maintenance costs (if any) Depreciation – building & fittings Rental management Interest costs ALWAYS DOUBLE CHECK YOUR NUMBERS WITH A PROFESSIONAL
- 36. How much will you be out of pocket today? Upfront Costs Amount Stamp duty Mozo calculator LMI Depending how much you want capitalised Conveyancing fee ~$1200 estimate Depreciation report ~$550 estimate Finance fees ~$300 estimate Holding cost (if any) Depending on your mortgage rate Deposit LVR ALWAYS DOUBLE CHECK YOUR NUMBERS WITH A PROFESSIONAL
- 37. Estimating Price Rental Yield Check Comparative Sales Method • Buy a property report with a list of comparative sales • Get one from a bank for FREE • Search for comparable properties yourself Everything is subject to NEGOTIATION and EMOTION For Banks! 37 www.neochats.com.au Step 1: Rent per year of property Step 2: Suburb median rental yield #1 / #2 = estimated fair price
- 38. Location Check St Marys Sports Recreation Centre Police Station St Mary’s Primary & Senior High School
- 39. Location – Walk score 79 Train Station University of Western Sydney Penrith Observatory Golf Course St Marys Sports Recreation CentreTrain Station Parks and residential St Marys Rugby League Club
- 40. What are the BIG risks? Water efficiency standards Check water flow Hot water Electricity compliance certs Roof Flood Concrete cancer Asbestos damage
- 41. Homework • Practice cash flow calculator • Practice property valuation ratio • Look for properties you think would suit Sarah • Email me any properties you want to include in next week’s case study work www.neochats.com.au 41
- 42. What to look forward to next week • Work through actual property examples • Should Sarah buy one or two properties? • Learn how to filter out bad apples • Property inspection checklist • Compare and vote on your choice for Sarah • The truth about the real estate industry and who is acting for or against you • How to take next steps to finding the right property for you www.neochats.com.au 42
- 43. Property Vision Cycle YOUR VISION Life Goals 3 Year Property Vision Pathway Immediate Strategy Pick your Partners Focused Search Shortlist & ComparisonMake an Informed Decision Negotiation & Purchase Post Purchase Assessment Define Next Milestone
- 44. Best Things? • What did you learn, best things? • Was there anything you didn’t know you didn’t know? • Is there anything you would do differently • Who wants to come back next week?
- 45. Well done for participating in your first NeoChat NEOCHATS ON PROPERTY