Hedland & Newman

Have you put setting up a SMSF in the too hard basket?

If you are asking the question should you start a SMSF its definitely worth exploring. With industry funds starting to lose their shine since the spectacular crashes of the GFC, SMSF property investing is becoming more and more popular. Did you know you can invest in all types of established property, including residential property, commercial property, industrial property and even a farm through your SMSF?

In this weeks blog we break down what exactly is a SMSF, who it suits, and the reasons why an investor might consider it.

What is a SMSF?

A self managed super fund (SMSF) is a trust structure that can be used to manage retirement savings on behalf of its members. SMSFs are established for the sole purpose of providing financial benefits to its members in retirement, the benefits can also be passed to beneficiaries upon death.

Who does it suit?

Just about anyone!

If you contribute to super and are able to be a trustee then you can have a SMSF.

It is most appropriate for those who wish to have direct control over investments, wish to diversify for example including property and generally have over $200,000 in existing super.

Should you wish to buy property using your SMSF, you need to comply with the following rules:

The property:

  • Must meet the ‘sole purpose test’ of solely providing retirement benefits to fund members
  • Must not be acquired from a related party of a member
  • Must not be lived in by a fund member or any fund members’ related parties
  • Must not be rented by a fund member or any fund members’ related parties

Property purchases via your SMSF should be considered long term assets designed to benefit you now and into retirement.

Why should I consider a SMSF?

As well as having control over your investment, you pay little or no capital gains tax if you own& sell the property over the age of 60!

The tax benefits connected with super can improve returns from having property in your SMSF as it enables you to focus on your personal situation.

You also have the ability to increase borrowing power from using super contributions from family or business partners. Did you know you could even own your business premises in your SMSF, which can assist cash flow and funding.

The key to making a successful SMSF investment strategy is educating yourself and using SMSF professional advisor.An incorrectly established SMSF can cost the investor thousands, so its worth getting the right advice from a financial advisor at the start.

So should you start an SMSF? Possibly. If you’ve taken the time to understand your responsibilities as a trustee, the costs involved and how you’re going to invest, seek advice and give it a go.

5 must-read books for the budding investor

Ever wonder why some investors become more successful than others?

Reading books on not only practical applications of investing but positive mindset have been a huge contributing factor to my success in property investing, running several businesses and also in my personal life. So much so that in our team meetings here at CPG, we give an opportunity for a team member to share their key takeaways and lessons from a book they’ve been reading with the rest of the group.

Practical knowledge steps must be taken for an investor to become successful but what is often overlooked is the soft skills that a budding investor must develop. One of the ways to develop these skills is to read books that either demonstrate what has worked for other successful investors, or that tell stories of what made successful investors great.

Here are five books that I consider a MUST read for all property investors.

0-130 Properties in 3.5 Years – Steve McKnight

With more than 160 000 copies sold, this is Australia’s highest selling real estate book — ever!

Scores of investors (myself included) have used Steve McKnight’s wealth building information to discover how to achieve their financial dreams. Now it’s your turn.

Using his incredible real-life account of how he bought 130 properties in 3.5 years, McKnight reveals how you can become financially free by using cash and cashflow positive property.

4 Hour Work Week – Tim Ferris

If you want to live life on your own terms, this is your blueprint. This engaging book will make you ask the most important question that you will ever face: What exactly is it that you want out of work and life, and why? Tim Ferriss is a master of getting more for less, often with the help of people he doesn’t even know, and here he gives away his secrets for fulfilling your dreams.

You Inc. – John McGrath

John McGrath is CEO of Australia’s fastest growing real estate company, his core message is about being the best person you can be. He applies this to your business and your life. This is a book of strategies, tips and positive anecdotes that is destined to change all aspects of your life.

I have personally used the principles in this book over and over again in my life.

Rich Dad / Poor Dad

Robert Kiyosaki has, virtually single-handedly, challenged and changed the way tens of millions, around the world, think about money. This book is timeless, priceless and should be required reading for everyone (especially High-School kids). Seriously one of the best of all time and a must read.

5: Where will you be five years from today?

This book is such a favourite of mine, we take our clients through this exact process as part of their wealth creation journey.

Whether you are setting goals for retirement, considering a new career or direction or just looking for inspiration, here’s the most inspiring and compelling gift you can find.



Investing tax mistakes you could be making

Yep! Tax time is just around the corner and smart investors know it’s a great time to claim back a portion of their investment expenses.

It seems however according to the ATO, there are common mistakes made when it comes to claiming tax. The tax man keeps a close eye on those who over claim but nobody tells you if you are under claiming. Here are the top mistakes the ATO listed and the ones here at CPG we come across from investors.

Please note to seek legal and financial advice from qualified professionals to ensure you claim accurately.

Not using an accountant who understands property
Using the right accountant is extremely valuable, especially as a property investor using an accountant that understands property is worth their weight in gold! Ask your accountant what experience they have in property investing before making your decision.

Paying down tax-deductible debt before non-deductible debt
Most experienced investors will know that it can be tax effective to pay down non-tax deductible debt before tax deductible, such as your home. Most investors will have their investment properties on an interest only arrangement until they have eliminated non-deductible debt.

No depreciation schedule
A depreciation schedule is the schedule of items that can be depreciated at a certain rate allowing you to claim a tax deduction against your taxable income. It is amazing how many people don’t even have one! It is wise to get your accountant to assist you with this as this can save you thousands.

Trying to claim expenses you can’t.

There are certain types of property investing expenses that cannot be claimed as part of your tax return. For example property improvements must be claimed over several years as capital works deductions where repairs can be claimed in the same tax year. Also any conveyancing expenses that you incur during the purchase and selling process cannot be deducted. Instead, these costs make up part of the cost based for capital gains tax purposes.

Keeping the right records

Property investors must keep accurate records, regardless if they prepare their tax returns themselves or not. A record must be kept of the following:

  • Rental income and deductible expenses and these need to be kept for 5 years.
  • All documents relating to the ownership of the property including all purchasing and selling costs, again these need to be kept for 5 years.

By keeping all of these documents handy, it will be a lot easier to make accurate calculations and enlist the help of a tax professional.

Although tax losses are great, the goal of property investing is to earn more income than you pay in expenses. Set your goal for profit as a tax loss is still a loss that costs you money but ensure you are claiming all that you are legally entitled to at the same time.

Leave us your comments below!? Which tip could help you maximise your tax return?

What comes first – the money or the property deal?

When you are just starting out as an investor it can be a huge obstacle to overcome the “I have no money” dilemma and get excited about your goals when they seem out of reach based on your current financial situation.

How often do you hear yourself say “I/we don’t have the money” not just for investment opportunities but life in general?

Or you have gone to the bank/s and been told that you don’t qualify for a loan?

My team come across motivated potential investors each and every day that can’t wait to get started on their property investing journey but they just don’t qualify… yet.

Here are my key tips to start your property investing journey irrespective of your financial situation:

1) Mindset

Most investors don’t get beyond one or two investment properties and it becomes a self-prophesising belief that they can’t continue to grow their portfolio. If you do what everyone else does and thinks you will get what they get… and never get ahead.

Question your thinking and avoid limiting your beliefs of what is possible.

2) Knowledge and Focus

If you want to be an investor, you need to start “walking the talk” and start looking at opportunities and research today.

There are many financial experts out there that offer advice on no or little money down opportunities, joint ventures, option agreements and buying off the plan.

If these strategies are too high risk for you, focus instead on creating a savings plan until you have a decent amount of equity to invest on your own.

3) Figure out the reason as to why you have no/little money to invest

There could be any number of reasons why you are in your current financial situation. You could be a low income owner and struggling to keep up with day to day expenses. Or, you could earn a good salary but struggle to save a deposit. You could have a very low risk tolerance and want to use as little of your own money as possible or perhaps you just don’t know where or how to get started.

Getting clear about your current situation will allow you to create an action plan.

4) Be prepared to put in the hard work

Like any project, investing success is having the willingness to make it work and put in the hard yards. When you commit to learning, researching and actively looking for opportunities, the rewards will come.

Investing starts with mindset and a plan that the money will eventually follow. And although it may be a while before you can invest, you’ve lost nothing and gained knowledge for the next opportunity – it’s a win either way.


What you must know when researching your next investment

This time of year many of us take holidays well into January. With time away from work and busy social schedules, this is a great time to research the market and gain confidence around buying a property. You can use this time to become prepared, with less buyer activity around there’s lower demand, which could allow for a better position to negotiate.

In the video above I share my top tips to avoid the pitfalls of searching for the right investment property for you.


Financial resolutions worth making in 2015

It’s a new year and many of us are making resolutions – again. Here at CPG we have just celebrated our 6 year anniversary and every year we see the top 3 financial resolutions our clients make include saving more, spending less and reducing debt.

Many resolutions seem to get broken throughout the year but it is logical that those who  set out with goals to improve their finances at the start of the year will realise more of their goals by the end and will generally be better off financially.

Here are our top resolutions to make and keep for 2015:

1) Track spending and make a budget

It might sound obvious but checking the status of your savings and evaluating your monthly expenses is key to managing your cash flow and creating a budget that you can actually stick to.

If you are spending more than you make then how can you reach your financial goals? Make sure you include a fixed amount for discretionary expenses – a budget is only as a good as how well you can stick to it.

2) Open a savings account and close accounts you don’t need

Just like tax is taken out of your wages (if you’re an employee), pay yourself first in a separate savings account. If it’s not there – you can’t spent it and these types of savings accounts usually offer better interest rates as well.

And while you’re opening a new savings account, it’s the perfect time to close accounts you don’t need and save money on bank fees and charges – those few $ every month can add up to hundreds quickly.

3) Create a pay down debt strategy

If you have a lot of bad debt, you will probably save more by paying this down first than investing. Start with high interest loans first and pay more than the minimum payments. I have seen many clients become debt free very quickly using this strategy.

4) Educate

If you want to learn something new -research, read and source experts in that area. For example if you want to cook you read cookbooks and attend cooking classes. If financial resolutions are a priority for you this year commit to perhaps reading a financial book or attending an investment seminar once a month.

Applying yourself on a consistent basis to learn more is essential to creating wealth.

(note: I will be doing a blog on my top ten property, investing and mindset books very soon!)

No matter what your financial goal, whether paying down debt or saving for retirement – making a financial commitment will help you reach your goals quicker. The key to sticking to your resolutions is to Take Action, track your progress and check it often.


Give the greatest gift this Christmas! Pay it forward

I want to take this opportunity to wish you and your family the happiest of holidays. I love to celebrate Christmas with my family and since you’re likely spending time with your loved ones too, I’ll keep today’s blog short and sweet.

This very special blog is one of the BEST presents you can give… It’s the gift of paying it forward.

Here at Crawford Property Group we run many community and charity initiatives throughout the year. These include fundraising through casual Friday’s, City to Surf and other initiatives.

Assisting our clients reach financial freedom is what we do every day. We share the tools and resources to help them accomplish and implement their goals but being financially free also allows extra funds to help other people and pay it forward.

This time of year is a great time to reflect on 2014 and plan what the next year will look like for you.

Whether you are ready to invest now or want to look into it for later down the track click here to come in and have a chat with us.

This also could be your opportunity to pay it forward to a friend or family member so they can get started or grow their property investing journey.

Thank you for your allowing us to connect with you over the past year and we look forward to working with you again soon.


Holidays: perfect time to plan your next investment move!

Holiday downtime can provide the perfect opportunity to reassess your current investment position, conduct a portfolio and financial health check and plan your next investment move  – putting you in the best position to maximise returns in the new year. Read more


4 tips to change your financial life and make it stick

This blog isn’t about how to create a budget or a financial plan. It’s about sharing a few simple tips that have stuck with me through the years, made the process simpler and more effective, and provided clarity during my decision making. Read more


How to take control of your money now

Coming into the holiday season the cost of festivities can certainly stack up with the blow out of gifts and extra expenses creating a stressful time when in fact we should be enjoying our time off. This additional spending can get out of control quickly and can often place investors in a negative position by starting the year with more bad debt.

Now is a better time than ever to get your finances in order and take control of your money, easing the strain of funding these extra costs.

Here are my top 4 tips for taking control of your money, starting today.

1) Make a budget for December and January

It doesn’t matter how you track your spending but whichever method you choose stick to it. After you’ve monitored your spending for a few weeks develop a budget from this. This is the 1 simple action that will control where your money is going.

By the time January comes along you will be more aware of your current financial situation – but don’t forget to keep some money spare for January’s extra expenses and bills as well.

2) Don’t fall for expensive payday loans

Although a quick fix, these click away short term loans will set you 10 steps backwards with the extremely high interest rates they charge. When strapped for cash our immediate reaction is to borrow so if you must, consider alternatives such as an overdraft or credit card.

3) Review borrowing options and your accounts

Fees are something we don’t usually look at – we just accept they are a necessity. Make some time over the holidays to evaluate your current accounts and loans and research better deals. Monthly account fees and interest charges while they may look small month to month can add up to thousands over the long term.

By taking advantage of reward credit cards, higher interest savings accounts and 0% balance transfers can all assist in reaching your financial goals quicker in 2015.

4) Automate your expenses

More and more we live in a paperless society. Save time and the stress of having to remember when all your expenses are due. Direct debit and automate all your expenses and if you have a separate savings account (which I highly recommend) automate this deposit too. It is also a good idea to arrange overdraft protection to save yourself from hefty bank fees just in case your account goes into the red.

Taking control of your money can seem overwhelming, but utilise this time of year to plan your finances and take action. Open that savings account, set up a savings plan or call around for a better insurance deal. When it comes to finances and other goals, change only happens with action and action is taking control. Commit yourself to set up a savings and financial plan for 2015 (which I will cover in another blog in the coming weeks).


Which type of investor are you?

I sometimes liken property investing to preparing for a long road trip. When you want to arrive at your desired destination safety safely and on time, it’s important to set your GPS….right?

On a road trip you have to make decisions; like how far you are going, do you have enough petrol, where will you be stopping on the way and what is your final destination? There are basic similarities to property investing also where you need a plan that helps you set financial goals, decisions on how long to invest for, how much risk to take and the amount of money you’ll need to get there.

There are many types of drivers on the road, each with their own journey, just as there are many types of investors. So which type of investor are you?

To figure out what type of investor you are, you’ll need to ask yourself some questions first:

  1. What are your goals? Are they short or long term?
  2. Are you investing for income, growth, security? – do you know?
  3. What level of investment risk are you comfortable with?

Right Laner
You’re not generally one to take unnecessary risks and happy to take your time to reach your destination.  This investor is focused on minimising risk rather than maximising gains and has a long term outlook.

Also known as the opportunist investor, isn’t afraid to take risks for gains. Likely to try different strategies and hold a mix of short and long term investments, with an interest in both receiving a passive income now and future capital growth.

Fast Laner

The riskiest of investors wants to get to their destination/financial goals quickly. Although this type of investor can receive better returns they are also more liable to larger losses.

Back Seat Driver
The type of investor who researches, talks but takes no action. Whether this is from being overly cautious, any type of investment carries risk but you will never reach your destination without driving the car.

For the majority of us the destination is financial freedom. Only 1% of Australians are financially free and the majority have taken themselves there, they didn’t inherit it. They have made it by educating themselves and taking action. You can overcome the crossroads speedbumps to get to the destination. All it takes is education, some help and a little drive/ambition.

Whatever type of investor you are, remember a diversified approach works best. On any journey, sometimes you are on cruise control and sometimes you need to overtake to speed the trip along. Much like a GPS – An investment expert can help you through the journey and make the most informed decisions at every stage.


Where would you invest $500k?

You’ve just left your brokers office, pre-approval in hand after being told you have $500,000 to spend on an investment property. Your heart is racing, blood pumping and you feel good enough to do a Toyota jump moment on the sidewalk – but what now? Where are you going to invest the money, how do you decide what to buy?

When clients come to me with this situation I want to know their overall situation to see where the $500k would be of most benefit to their goals and current portfolio.

To get to this point you would certainly want to make the most of what you have so it’s more important than ever to protect yourself from loss and maximise your equity or savings.

Here are my top tips to be comfortable investing half a million dollars.

1) Set Investment Objectives

Most investors spend their time focusing on their financial situation but don’t have specific financial goals. Whatever your goals are, setting investment objectives will highlight the appropriate strategies and actions to take to help you reach them. They key is these objectives should be measurable, achievable and able to be communicated toy our financial advisors, and should be reviewed at least once a year, of if your financial situation changes.

2) Risk Tolerance

Consider investments that align with your personal risk appetite &  their direct ability to reach your investment goals. Every investment has some risk so it is important to weigh up the pro’s and con’s of the investment and then put a suitable strategy in place.

There are things you can do to manage the risks associated with investments such as

  • Making sure your investment strategy meets your objectives and financial situation
  • Understanding and researching the nature of the investment you are considering
  • Being realistic with time-frames for a particular investment strategy and outcomes
  • Regularly reviewing your investment

3) Consulting Finance and Wealth Professionals

When considering any investment it makes sense to use a professional in that industry. Same goes for Property Management. You wouldn’t ask a friend or perform a root canal on yourself would you? No! You would research and find the best dentist for the job! Why should investment and property decisions be any different?

Maximise the use of professionals and experts to make the right decisions, avoid costly mistakes by leveraging their knowledge and your time.

4) Minimise Tax with the Right Structures

Through our clients I am continually reminded of the importance of having the correct ownership structures and the right advice on investment loans.  It is important to understand how you can achieve the maximum tax benefits from an investment purchase.

The goal is to have a structure that is appropriate for you and your investment objectives that minimises risk, maximises flexibility for your future investment goals as well as providing tax effectiveness.

Determining the suitability of a structure should be discussed with an experienced advisor.

5) Selecting the Most Appropriate Investments

With $500k to invest there are so many options around the country at your disposal, so choosing the right one can be more than confusing. The following questions can assist you in choosing the most appropriate investment:

  1. Are you looking long term, short term, or both?
  2. Are you wanting safe returns (generally a lower rate of return) or investments with more risk (potentially higher rate of return)?
  3. What types of investments are you genuinely interested in/familiar with?
  4. Do you like hands on investments or passive investment income?
  5. What rate of return would you expect?
  6. Which type of investment will get you to your financial goals sooner?

There are no guarantees in any type of investing, but chosen correctly your $500K investment could potentially grow into millions over time. The key to success remains in doing your research and ensuring the properties you invest are worthy candidates to add to your portfolio.