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Investing in Real Estate & Owning Property Assets
Many Australians believe that owning their own home is the biggest and best financial decision they can make because they don’t have to pay rent and the value normally goes up over time (long term investment approach).
Our series of information and education guides are aimed to educate you about various aspects of owning property to live in as well as how to get the most value out of it as a landlord and investor.
You’ll find micro course case studies will teach you about property investment decisions.
The Property Investment Academy Course will give you training and support as well as contacts to help you turn your property dreams into reality.
Many property experts talk extensively about property values and drivers like jobs and demand and supply in the capital cities and being the largest capital in Australia, Sydney is often the focus. EzyLearn CEO, Steve Slisar moved his family to the Lake Macquarie area after closing EzyLearn’s physical training centres and becoming an online-only training course provider and many examples, case studies and exercise files in EzyLearn courses are based on property investment in the Newcastle, Lake Macquarie and Central Coast area.
Regional Areas Like Newcastle, Lake Macquarie & NSW Central Cost are Growing
In various businesses and partnerships since going online, Steve has advocated the use of virtual assistants (remote contractors) because technology enables businesses to find the best person for the job regardless of where they live and this is becoming more relevant with cloud-based programs like Xero and QuickBooks, Online Digital & Social Media Marketing and Google G Suite.
With our property investment education guides we take a similar approach to understanding the potential return on investment of a property just as we would forecast future potential returns if you started your own business.
- a regional airport which will soon be capable for international flights,
- large and busy sea port for mainly coal shipments,
- great beaches,
- a large and successful university, and is the
- main capital for the hunter region.
Areas like Wallsend, Cardiff and Warners Bay & Belmont (Lake Macquarie) connect travellers from the outer rings to the inner rings of Mayfield, Waratah, Georgetown, Adamstown and Mereweather.
Case Studies, Exercise Files & Micro Courses on Property Investment
Understanding the need for people to invest for their future and have a roof over their head we’ve incorporated property ownership and investment topics in most of our courses. Our digital and social media marketing courses even covers how a successful Sydney real estate estate agent who worked within the McGrath real estate brand as a commission only sales agent promote himself online to stand out from other agents.
Here is a summary of what is included in the Property Investment Training Courses.
Household Budgets & Personal Profit and Loss
The journey of home ownership and property investment usually starts off with a visit to a mortgage broker or your bank and what they want to see is “How much profit you make”. Profit means income MINUS expenses, so it’s important to keep your expenses down as well as your liabilities (like credit cards) and the best way to do that is with a personal budget.
A home budget usually starts with REAL information like how much money you spend each month and it’s purpose is to ensure you maintain the same level of profit each year or better.
How much can you borrow
Property Investment Academy Assignment
Not sure how much you can borrow? Learn about all the financial functions in Microsoft Excel like Internal Rate of Return, Value based on future cashflow, Forecast value and much more..
We combine real life investment property values based on the Newcaslte and Lake Macquarie areas and go through scenarios where you make an investment purchase at high rates and mortgage insurance penalty rates but discover whether it’s worth the investment.
All figures are based on past performance and future performance based on rates similar to the past. This training course and workbook will enable you to go through and see the investment property potential to invest in regional areas like Newcastle and Lake Macquarie as well as in your local area.
If you have own your own property for some time you can probably make some fresh property investments without any savings (although it’s always better to have a buffer). In this guide we outline a scenario that is simple to understand and may help you act and become a property investor!
When you begin the journey into property investment you enter a new world of managing assets and liabilities, managing the income and financial return by good cashflow management. The most important consideration for quality (investment grade) property investment is to buy into areas that are growing so that the value of your investment property grows just like your house has.
How Much Can You Borrow with Home Equity Release
This step is really a combination of working out how much you can borrow (or afford to repay) based on the step above and rather than having just a cash deposit you’ll calculate a deposit based on cash+equity in your existing property. This is the area of investing in property that enables people to grow their real estate wealth without having to save up the money.
An increase in the value of your home is like an increase of cash in your bank, but be aware that a reduction in the value of properties around yours may also result in a reduction in your equity.
Cost and Expected Return
This step can be a lot of fun when you first get started investing in property but as you look at different houses in different areas you’ll realise that this step is as much crystal gazing as it is looking at old historical data.
Many websites have this information as statistics but no one can tell the future nor can you really know the value of a property by just seeing it in an online directory.
A big consideration for some property investors is what they can “develop” on that property or how they can renovate it to improve the value and rental return.
Negative Gearing & Depreciation Tax Benefits
Many high income earners, who are paying higher marginal (personal) tax rates use negative gearing and depreciation to reduce the amount of tax they pay while being able to leverage (borrow money) to buy an asset which will increase in value in the medium to long term.
We explore a typical scenario where a couple combine their income, explore ways of reducing their expenses and do the math to see if they can invest in a brand new house and land development for their future, and possibly a home they can live in if they move out of Sydney.
New Property Investment module currently in development
Land is a scarce resource. You can’t manufacture it in a factory and you can breed it, all you can do is use it to erect buildings like houses and units where people can live. You can also build factories and warehouses that businesses can lease to operate from.
Vacant land is created by subdividing larger, usually rural, blocks of land into small residential sized blocks. This vacant land is created in an estate by a developer and is the best indicator of the value of land in that region. Vacant blockss are also available in established areas where no house has yet been built.
New homes are created by builders and builders fall into several distinct categories. Project homes are one of the cheapest ways to have a new home built because the plan, materials, engineering and all other aspects of the build process are systemised.
This reduces the price to build and reduces the cost while also giving you a beautiful home.
Investors are not normally as choosey about flooring and fittings and some builders cater specifically for investors. These builders also have designs that are suited to increase the rental income with things like “dual key” houses where you can get two rentals from one block.
The most expensive way to have a house built is to have it designed by an architect and built by a custom builder.
There are tax incentives involved when buying a new house and land package so if you want to reduce your tax while investing in an asset that normally increases in value over time then this is a good option for you.
Existing dwellings can be from 1 to 100 years old, they’re just NOT new. The older the property the more chance that it will need repairs and maintenance and the less chance you have to use tax tools like depreciation.
One of the things you’ll need to do when looking to buy an existing dwelling is get a building report and a pest inspection and report. These reports are the best tools that any property investor can have because it gives you a solid understanding about the state of the building.
Sometimes you can renovate an existing dwelling to improve the bathroom and kitchen and make it look newer and more modern. In other circumstances you can change the internal layout of the house and add and extra room or make it more open space. Each of these tasks can incur risks and costs but increases the value of the property.
If you have a property that contains at least 450m2 of land (much easier in the Newcastle & Lake Macquarie region) you may be able to earn an income from your own home and we’re not talking about renting out a tent in your backyard using AirBNB!
Building a granny flat enables you to build a property cheaply yet get a good rental return and it could also increase the bank value of the property!
New house and land packages
In a growing country like Australia where the population needs to find somewhere to live new house and land packages are popular. Property developers will convert a rezoned farmland area into a housing estate and sell off blocks of land. Some of these blocks are registered and ready to build on while others are not registered so you’ll have to wait.
The property that you build on these blocks depends on the zoning as well as the estate guidelines and can include a property that you intend to live in or rent out. Some can be single dwellings while you can also build a townhouse, dual key or multi tenant dwelling.
With the scarcity of available land in popular built up areas most land developments are further inland where more land is available.
New Unit Developments
New house apartments are popular in built up areas. The developer in these situations will build up so they can sell multiple units rather than blocks of land. This also affects the ownership structure and the title for each asset and most units is a strata title as opposed to a Torrens title for house and land assets.
A unit block will have a strata manager and some parts of your unit is yours to do as you please while other parts are owned by all the owners in the complex. This makes living in a unit and owning units as your real estate asset a little more complex and time consuming.
Owning a unit / apartment exposes you to the financial risks associated with the strata manager and the sinking fund. Every unit owner pays levees that go into the sinking fund that pay for the parts of the complex that everyone owns.
Should you invest in Commercial Property
Xero Cashflow, ROI and Budgets Course
Unlike Residential Investment properties which are affected by sentiment (ie. the emotional drive to live near a beach, lake, school, shopping etc), commercial property values are determined by their yield. Yield is simply the rental income based on annual rental amount and as a percentage of the total cost of purchase so the value of the property will increase if the rental income increases.
The returns are normally higher because when a tenant vacates the premises COULD be empty for longer periods of time and the premises may only suite a certain type of business.
Our Xero Advanced Course (covers Cashflow, ROI and Budgets) goes through a business case study based on historical financial information and corresponding profit and loss to determine whether the business owner should invest in a commercial property for his own business to use.
As soon as you own an investment property you need to manage it. Managing property includes repairs and maintenance as well as advertising it to rent, choosing the best tenants, signing leases and then ensuring that the property is looked after and that the rent is paid on time. For these services you pay a percentage of the income from the property as a management fee.
Selling and buying property are some of the biggest transactions that most people go through in their life and they often only happen once so we’ve created educational material to help you understand the stages of the sales and change of title process but also use real estate as examples in our training courses.
Get the right training for your goals, needs, circumstances and budget