Property Tax Deductions: Strategy You Should Be Maximising

Anyone planning to get into property investing must know that they are entitled to deductions they can claim against their taxable income. Here in Australia, one type of tax deduction that property investors can claim is property depreciation.

Savvy investors know how important a depreciation schedule is in minimising their tax. But surprisingly, not all are taking advantage of it. Are you’re making the most out of your property investing strategy?

(Read More: Get a (Tax) Break: Grow Your Portfolio by Minimising Your Tax)

Big Savings

Industry experts say that only one out of five of the millions of residential property investors in the country is maximising the yearly depreciation deductions. This means that thousands of dollars are being unclaimed by investors every year — money they could have used to pay off their mortgage or buy other assets.

There are two types of property depreciation allowances you can claim, namely, depreciation on plant and equipment and depreciation on building allowance. To maximise the tax returns you can claim, you need to know which potential deductions deliver the biggest returns.

According to a Bradley Beer, CEO of a tax depreciation firm, ducted air conditioners, floating timber floors, and solar power systems give the biggest deductions. “In the first financial year alone, these three items could result in about $3400 in deductions for the owner,” he says.

(Read More: Make the most of property tax deductions)

Small Deductions Help

But it’s not just the biggest deductions that can help boost your tax savings. Smaller ones like smoke alarms, garbage bins, and exhaust fans can help you put more dollars into your savings fund. But if you want to maximise the tax money that you can get back, it helps if you work with accountants who have years of experience in making depreciation schedules.

If you want to win the property game, you need to understand and make the most out of investing strategies. Contact us now if you want to learn more about these strategies and how to build a smart property portfolio.

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Why You Should Hold on to Your Property

In property investing, one question that often gets raised by new investors is whether to sell or to hold. The answer would depend on various factors, such as the past performances of Australia’s housing market.

A Growing Investment

Take this couple for example. Sydney and Doris bought a home in the then up-and-coming area called Burwood in 1952. The couple knew the neighbourhood well, as Doris attended the Ashburton Primary School and Sydney met his would-be wife at the art-deco Regal Cinema.

According to Domain, the house they purchased, a cosy red brick veneer home, was worth 7,865 pounds or about $ 15,750 in today’s dollar. Now, the property’s value is more than $1.4 million — almost 90 times more than its original price.

(Read more: What happens when you sit on a property for 52 years?)

So much has changed in the neighbourhood since they bought their house. The area where the property stands is now a part of Glen Iris, a premier spot in the housing market. The cinema where they met is now a block of apartments.

 

The demographics are changing as well, as younger residents move into the neighbourhood. “I’ve seen the transformation here as all the older families moved out and this younger breed moved in and it’s been a change for the better,” estate executor Jeff Smith said, who is also the couple’s son-in-law.

“It’s become a very desirable area for young, up-and-coming couples with reasonably good jobs.”

Long-Term Pursuit

Property investing is a long-term pursuit, so you should be careful where you invest your money. You need to have a good plan and a good team to help you know which property fits your investing goals.

Our 44-point checklist, for one, can help you identify properties that have promising capital gains. Just like Sydney and Doris, you can reap huge gains from your property if you hold on to it for a long time and if you did your research right.

With the right investing strategy, you can also have a property portfolio to secure your financial future. Talk to our team now to get your property investing started.

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No, Negative Gearing is Not to Blame

For the past few years, negative gearing has received a lot of criticism, especially with the rising prices in some property markets. But now it seems that it’s time to lay those dissenting opinions to rest. A new report finds that negative gearing is not the key culprit influencing shifts in housing prices.

Not the culprit

According to Mythbusting tax reforms by Deloitte Access Economics, negative gearing does not have a direct or major impact on housing prices. The report explains that supply is the primary factor and at the moment a boost in supply is helping ease prices in Sydney and Melbourne.

“We have seen a distinct shift in the hot property markets of Melbourne and Sydney in recent weeks. This wasn’t due to any changes in tax policy, it is a result of new housing supply coming into the market and finally taking the pressure off prices,” Property Council of Australia CEO Ken Morrison said in an article in Mortgage Business.

(Read more — Negative Gearing: Why It Should Not Be Scrapped)

“As the report shows, pointing to negative gearing as the primary driver for higher house prices is wrong,” Morrison said.

Who benefits from it?

Another prevalent claim against negative gearing is that it only caters to the rich. With it in place, some argue that the rich can avoid paying taxes and inadvertently preventing everyday Aussies and first-time home buyers from entering the market.

This is not the case however, as analysis show those who benefit from negative gearing the most are those who earn around $80,000 a year. While it’s not anywhere near poverty level, earning $80,000 a year doesn’t make one wealthy either. These people are your everyday Australians who only want to have a comfortable future.

“Negative gearing is not a tax lurk for the wealthy – it’s a legitimate and long-standing part of the tax system used predominantly by the regular folk who are looking to get ahead,” Morrison said.

JDL Strategies has always fought for the rights of Mum-and-Dad investors who are struggling to achieve financial security during their retirement years. So, we welcome this news and stand behind our belief that negative gearing should not be removed. When used in a comprehensive property investment strategy, it can help you build a smart property portfolio, and ultimately, secure your financial future. That in turn eases pressure on government because they are not burdened with caring for those who cannot afford to fund their own retirement.

The JDL Strategies team are at hand to guide you in making effective property investment decisions. Talk to us to learn more how we can help you create a better future.

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When Owners Say No to Property Developers

Scenes where homeowners refuse to leave their abodes despite big offers from large developers are stuff that we often see in movies. Here in Australia though, fiction can sometimes be reality.

Unmoveable Houses

They’re called nail houses in China, after an expression that loosely translates to “stubborn nails”. These are houses whose owners refuse to accept compensation from businesses and developers. And just like in movies, such as Up and The Castle, most of the property owners remained resilient, even when big time developers knock on their doors with huge cheques.

In Mollison St, South Brisbane one home stands between a shopping complex and unit blocks. For 15 years, husband and wife Norman and Janet Richards have turned down several offers from various developers. But now that they’re moving to a retirement home, the property is up for sale to the highest bidder.

Sydney also has its own nail houses. In St Leonards for example, a single-storey property has stood for over 75 years. It was bought back in 1960 for 3,000 pounds and was expected to fetch about $3.5 million. It has since been sold for an undisclosed sum, after the owners closed their business.

The Better Strategy

These stories show what could happen if you buy and hold properties in the right location. Real estate becomes more valuable because of developments. When you know where to invest — an up-and-coming suburb just outside the city, for example — you can take advantage of potential capital gains and reap great returns in the future.  Learn more about holding on to your properties here.

Here at JDL Strategies, we can show you what’s best for your wealth creation plan. While we do applaud these owners for their resilience, we believe it’s also important to assess your financial health and see which step is the best for you.

There are several factors that you should consider in property investing, from rental vacancy rates and future developments. Our 44-point checklist can help you get started. Talk to us if you want to know how to start growing your property portfolio.

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To Have and to Hold: Property Investing in the Long Run

There are several strategies in creating wealth and investing in property is regarded as one of the most effective. In terms of returns, we believe your money is far better off in property than leaving it in the bank. Combined with debt reduction and tax minimisation strategies, you can secure your retirement effectively.

To Have and to Hold

To maximise the growth of your property portfolio holding properties for the long term is a better option. Some investors today, in fear of missing out, buy and sell property as fast as they can, hoping to reap short-term gains. What they don’t realise is that they’re missing out on potentially greater capital gains if they hold their properties for a long time.

In It for the Long Term

The key here is knowing where it’s best to invest and to hold. There are many other good locations apart from Sydney and Melbourne. Brisbane and other parts of South East Queensland, for instance, have a lot of promising property choices at the moment. On the other hand, you only have to look just outside cities for good property stocks. The outer suburbs of Melbourne, for example, are prime spots for savvy property investors.

In Perth, which is experiencing a price downturn in some areas you can find good properties that can provide good returns in the long run. The important thing here is to learn more about the area and see if the property stock fits your portfolio.

If you’re looking for an investment option with long-term sustainable growth, property is your best choice. We at JDL Strategies can help you plan your strategy and do your research before you go into property investing. We can help you get started and show you how hundreds of everyday Aussies have managed to grow a smart property portfolio.

Come to our events and see how you can improve your financial situation and secure your financial future.

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Investment Property Location and Why It Matters

New property investors are often told to pick a good location when buying a property. But have you really asked yourself why location is important?

Knowing where to invest should not be based on guesswork. There are lot of factors involved in determining whether a property is suited to your portfolio or not. If you just look into wherever the crowd is now without research to back you up, you could end up losing a lot.

At JDL Strategies, we use a comprehensive 44-point checklist — with help from our research team — to find out if a property is worth investing in. And for over 20 years, we have helped pick out best property options for our clients.

Location, location, location

Recently Realestate.com.au published a list of high growth areas which are under $550,000. Some time ago, JDL Strategies identified two of these locations for investors, specifically Tarneit and Craigieburn in Victoria. And for Realestate.com.au to include these areas in their list now proves how our solid research and our 44-point checklist can help you find the best property locations at the right time.

In Craigieburn, buyers are flocking because of relatively lower prices. While it’s not in the central business district per se, its close proximity to it and affordability are enough to make the suburb popular to buyers, averaging an annual growth of 12%.

Location is not just about proximity to the central business district or access to major establishments and institutions. You should also consider future development plans for the area. In Tarneit, for instance, there’s a new train station that is slated to open this year. This means, commuting to and from the city will be easier, making it more convenient for the residents and adding value to the property market there.

If you go through our checklist, you’ll know what to look for in an investment property. But it’s best to consult with property experts to know what steps to take next.

The best property advice can go a long way       
There’s nothing like solid property research to back your investment decisions. Our 44-point checklist filters out the average properties and identifies the ones that have the best capital gain potential. If you’re serious about securing your retirement, you need to pick the right properties in the right location

 

Let our expertise in property investing and research improve your long-term wealth creation strategy. Talk to us now and learn how to start a smart property investment portfolio.

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Winning the Race: What Happens When You Don’t Listen to Good (Investment) Advice

Last week, we wrote about how great leadership helps make a great team. It was evident in the last NRL grand final as captains Johnathan Thurston and Justin Hodges rallied their teams and helped put on the greatest NRL grand final yet.

This time, we want to discuss what happens when you don’t listen to good advice, as Jamie Whincup learned the hard way in the recent Bathurst 1000 event.

Title Hopes in Tatters?

For the second year in a row, Jamie Whincup defied team orders and gambled on continuing the race, which eventually cost him the race and potentially his title hopes. On lap 138, the fourth safety car of the race was sent out, as Scott Pye lost control of his Falcon and slammed into the side of Mount Panorama.

But instead of queueing in the pit lane as ordered by his team, Whincup continued on and went past the safety car, earning the ire of his teammates. The four-time Bathurst winner, who was at the second position at the time, was consequently penalised and dropped to the back with only 20 laps left. Whincup finished 18th.

After the race, Whincup admitted his mistake and said that he thought the safety car displayed green. “I tried to do the right thing by the team and stay out then I saw the safety car boards and knew I’d made a massive error.”

“I was coming up the hill and I saw the green light so I thought ‘happy days’ and went straight past. But I don’t want to bring the team down,” he continued.

No “I” in “Team”

One could empathise with him and see why he made that decision. He believed he was doing the right thing thereby giving the team a huge boost. But ultimately, his split-second decision made all the difference, costing him the race and, quite possibly, the title.

There are similarities when it comes to property investing — you’re in the driver’s seat and your decisions can pay dividends. But often, acting on instincts alone can seriously hurt your property investment portfolio. Don’t let emotions rule your investment decisions as they can easily put your wealth creation strategy off-track.

Our wealth creation experts can help you navigate the road to financial success. With our expertise in property investing, tax minimisation, and debt reduction, you can take the chequered flag and have a comfortable retirement.

Give us a ring and rev up your wealth creation strategy.

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Work Hard, But Make Sure Your Money is Working Even Harder

This is one of the most important financial lessons Senior Client Manager, Andrew Russell, has learnt. And this is exactly what JDL Strategies has been cultivating all these years. Best exemplified through the JDL Strategies Chain Reaction, every one of us can create a better future for ourselves through debt reduction, tax minimisation and asset accumulation. This method is not exclusive for the knowledgeable investor. In fact, this strategy is aimed for every Mum-and-Dad investor, every day Australian to raise his/her financial intelligence and, eventually, become a millionaire.

In this video, Andrew talks about one of his clients who attended our Fast Track to Wealth seminar with Julio De Laffitte. This client wanted to retire at 50. Here’s how Andrew and the rest of JDL Strategies Team helped to achieve this goal.

Curious on how the JDL Strategies Chain Reaction works?

Let’s talk.

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Turning Bad Debt to Good Debt

Demonstrating how bad debt can turn into good debt, debt recycling transforms mortgage debt into investment debt. With the use of equity, this is a tool that you can make work harder for you. This is what we call the Debt Recycling Strategy. By refinancing your current loan, you get a higher loan limit from which you can get a significant amount of available equity for investments. You can now choose to utilise this for various types of managed investments. The goal here is to increase your income potential until such time that all your mortgages are extinguished. Debt recycling has a steady and higher rate of success requiring investment not only through funds but also patience and time. We already mentioned this on a post we did way back, but here’s a nifty new video to give an example of how debt recycling can lessen the burdens on your investment.

JDL-Debt Recycling from Julio De Laffitte on Vimeo.

Talk to a JDL Strategies client manager to learn more.

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The Secrets to Getting into the Mindset of a Millionaire

Not all millionaires were born with a silver spoon in their mouth. Becoming one can’t be achieved overnight either. Unless Lady Luck smiles upon you and you hit the lottery jackpot, there simply is no shortcut to being a millionaire.

Nearly every millionaire owes their success to discipline and adapting good daily habits. Mr Julio De Laffitte, businessman, entrepreneur, and founder of JDL Strategies, is one of those who strongly believe that the right mindset and habits can make you successful in business and in life. Here are some nuggets of wisdom from Mr De Laffitte on cultivating winning habits:

(Read: The 5 Habits I Cultivated to Become a Millionaire)

Find the right people

“Letting go of the reins and delegating to the people best suited to the task is a recipe for growth, progress and, ultimately, success.”

If you’re managing a team you need to find, not only the best, but the right people for the job. Each of us has strengths and weaknesses. Tap into your team’s diverse talents and maximise the skills of each one.

Be specific with your goals

“Lofty goals and faraway dreams aren’t going to get you anywhere. Any goal I set, whether it’s personal or business related, is actionable and measurable.”

Goals determine your plan of action. So without specific goals, you may as well aim for nothing. Think about how you can achieve your plans and create the strategies for it. Be as specific as possible and get help if you feel lost or overwhelmed.

Get real with your finances

“Getting real with your finances is the only way you’re going to become a millionaire. If you don’t have a good picture of where you stand you’ll never be able to move forward.”
You need to know where your money is coming and going, so take a closer look at your finances and know your net worth. You’ll be able to manage unexpected expenses and improve your financial position when you have a good understanding of your finances.

Investing in the right resources

“The right resources for the job make things incredibly easy for my team and myself”

Ensure that you have everything you need to run your business. Millionaires like Mr De Laffitte don’t settle for anything less than outstanding, particularly when getting the right resources.

Push your limits

“By allowing yourself to drop these self-imposed limitations on how much money you can ‘have,’ you open the doors to unlimited wealth.”

Sometimes, the only one that’s stopping you from achieving greatness is you. Push your limits, challenge yourself, and dream more. When you set your mind to it, you can achieve anything.

You too can be as successful as Mr De Laffitte. Talk to us and know how to build and expand your property portfolio, create real wealth and plan for your retirement.

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