Wednesday, March 17, 2010

Be Happy

1. How to Improve Your Luck
Feeling a little unlucky lately? Want the secret to getting lucky? You have it already - it's you. The secret to improving luck is about perspective, self-belief and erring on the side of optimism. It isn't about winning huge pots of cash - it's about making the most of the wonderful blessings already surrounding you. Here are some thoughts for making your own luck grow.
Secret of Manifestations
1. Network. Lucky people know people, lots of people. They don't have to be everyone's bosom buddy but it is the art of being open to many new people that counts. Practice feeling comfortable talking to strangers at events that you attend. And actively listen to them when you strike up a conversation because you will have a lot to learn and they will remember that you appreciated what they had to say. This can translate into opportunities; the more people you meet and the more people you display genuine interest in, the more likelihood of you meeting the right person at the right time who has an opportunity at hand that you want to be a part of.
2. Trust your instincts. That little inner voice is often right and lucky people know this. You will also know when your "common sense" or "reason" are trying to override the lucky hunch. When this happens, take a moment aside to sit and think things through clearly and uninterrupted. Consider whose voices are speaking to you when you are faced with overriding intuition - is it your own trustworthy voice or is it the voices of others' expectations - a spouse, a boss, a friend?
3. Take it easy. Anxiety and worry are enemies of luck. They introduce a factor that says "Be very risk averse" and "Whoa there! Hold back now!" You won't be stumbling across luck while you are too busy hiding out. When opportunities come, you need to notice them and you need to seize them. A lucky person believes in now as being as important as tomorrow and much more so than yesterday. Don't be held back by ghosts of failure - they were just learning experiences. And tomorrow will always come whatever happens, so do your best to enjoy today so that tomorrow has a standard to match!
4. Be ready for new opportunities. The more open you are to novel ideas and new ways of doing things, the more likely it is that you will strike it lucky. Lucky people don't plod along methodically; while that guarantees a safe and secure path, lucky people take the path less known and meet all sorts of amazing opportunities along the way. Put your foot on that path now... try something you have never done before, try something you have convinced yourself you would hate, try something that someone else has suggested you try. Be bold.
5. Be an eternal optimist. Expect the best. Yes, anyone can do this and why not? It isn't about living with the fairies. It is about being positive and creating the outcomes that you want most. Lucky people are optimistic and they expect that good things will happen to them. Heard the mantra "only good things happen to me"? Well, probably not, as most of us tend to whine "why do all the bad things happen to me?!" Stop it right now and start expecting the best.
6. Turn sour milk into a smoothie. So the milk went off? Big deal. There are still a lot things you can do with it, so do it. Instead of choosing to wallow and feel rotten about things that go wrong, look for life's lessons in the experience and look for new solutions that grow out of the bad experience. Dwelling on horrible events in your life gives them great power over you, stifling your growth and stomping on your luck. And when you view the world in this manner, even if Lady Luck does call, you're likely to sabotage it because that suits your negative mindset. Avoid the wallowing and kick yourself back into action. Sure, there are times in life when some events really set us back, such as the loss of a loved one, but far better to honor that person's memory by doing things in remembrance of them than using that loss as an eternal unhappiness trigger. It is really important to learn and grow from sadness and hardship rather than to let it harden us and turn us bitter.
7. Reframe your life. If you perceive yourself as a victim or a hapless flotsam of fate, it is time to reframe. You are a shaper of your destiny and one lucky person. You're lucky to be alive; that's the biggest blessing every single one of us gets. Honour that lucky chance and live your life to its fullest. You'll only be glad that you did.
8. Never stop learning. This is related to staying open to new opportunities. Unlucky people think their learning stopped at school or university. Lucky people realize that that was just the beginning and that life is one huge university. Soak it all up; even the stuff you find hard, boring, or uncomfortable. It really makes your life a whole lot more exciting and helps you to understand where others are coming from. Aiming to understand a wide range of perspectives makes it easier for you to forgive people and to see their points of view. Knowing this enables you to weave others' motivations into how you approach life and treat them with respect. Which leads to the next point...
9. Treat people with respect. Lucky people know that other people matter. Respect for others makes you automatically lucky because it stops you from expecting other people's behavior to conform to your own or to ease your way. Instead, you know to respect people for who they are rather than what you wish they would be. And you avoid the arrogance of placing your personality style and lifestyle beliefs above theirs.
10. Treat the Earth with respect. The Earth gives us food, water, shelter, oxygen and spiritual fulfillment. Lucky people acknowledge this and care for the world around them as a mark of this respect. Involving yourself with nature by getting outdoors and enjoying it improves your sense of self-assurance as you don't fear its elements but embrace them. In so doing, you increase your luck as you broaden your knowledge and opportunities.

* Luck is made, not found. And the luck that is "stumbled across" is very often fool's gold in the hands of a person who doesn't know what to do with it. If you believe in yourself and your abilities, and follow the ideas outlined above, you will be in a great position to take advantage of lucky breaks.
* Use techniques such as visualization and goal-setting to create your luck. These are not over-used mantras; they are proven techniques to ensure that you remain directed and focused on the things you want for yourself in life.
* Use affirmations daily. "I am going to have a lucky day today." "I am going have good fortune today." "I am going to help enable my luck today by helping others to be lucky today."
* Be humble. Luck favors the humble; this doesn't mean you can't stand out there and enthuse others to find their luck but you mustn't toot your horn of arrogance or luck will start to shy away as you become too self-certain. And this quickly steps into the realm of disrespecting others and closing yourself off to more learning. Remember balance and you'll be fine.
* Don't get cocky. The more lucky you are, the more prone you are to become cocky and think you're better then everyone else.

Monday, March 15, 2010

Off the Plan Investments

Purchasing “Off the Plan” simply means that you purchase a property that is not yet complete. You essentially look at some building plans or a "display home" and buy the property at a discounted price.

It is generally at a discounted price as the developer must get a few “Pre Sales” on the project to prove to the bank that this project will sell, this gives the bank a safer base of equity to work with before approving a loan to a developer.

Many companies offer these properties for sale and they can be good if purchased in the right location. The trick is ensuring that this is the case. Property companies can align themselves with developers and simply sell the products they have available. As payment for aligning themselves and selling you a property off the plan they receive a commission from the developer who simply adds this onto your purchase price. This commission can be as high as 6% of the purchase price. For this reason bank valuations may come in low on these investments.

This is not research based investing! This is simply selling properties where the developer builds.

The other major issue here is that when high rise developments are completed, there could be 100 investors all looking for a tenant at the same time and as time goes on the properties remain vacent and landlords then have drop their rent price per week just to fill the property and a spiralling effect starts. Some developers offer guaranteed rent for one or two years. This can be a trap, as this amount again is simply added into the purchase price. So you are really paying for your own rent!

Now this type of transaction is not illegal and can be quite profitable if you purchase correctly at a good discounted price. There can be a few sneaky tricks that occur and there are a few dangers to be aware of such as:

• The developer goes bust – we have all seen building companies go under in the last 2 years so do your homework on the builder prior to signing to make sure that they are in a sound financial position.

• Depending on what type of development it is, when it comes to finance, the banks could either do a valuation from the plans or wait until completion and do a valuation then. Either way the valuations often do not come in at the purchase price. This may prevent you from proceeding with the purchase and depending on the detail in your purchase contract; you may lose your deposit and you may also be liable for any losses incurred for the developer to resell this property.

• If you haven’t purchased this way before you must be wary of the inclusions and the quality of the inclusions. Also check the quality of the fittings and finishing’s. If this is a house and land package off the plan, check if your contract says “turn-key”, this means it includes driveways, carpets, landscaping, blinds etc, if not, you could be up for these as an additional cost later down the track.

• Developers may sell the first few units in a block to their employees at an inflated price. So when you come and buy they will show you that a few have already “Under Offer” and at higher prices. The developer may then release his employees from these contracts, penalty free, but you are then stuck. Ask to speak with other purchasers if you can.

• The Developer could sell and settle one property to a friend or family at an inflated price. This then sets a price precedence for valuation of future sales. A valuer may use this sale upon which to value other properties in the same development. At the end the Developer and friend can resell the property and even if they lose a little on one property they gain on all the others sold at the inflated price.

• The law states that a property must have 7 years builders warranty against any faulty workmanship. Now this all sounds good but we have all heard the hard luck stories of other owners trying to get a developer to come back after one year to rectify some work under warranty. Investigate the builder’s insurance policy and find out what it covers or excludes. You don’t want to end up in court and further out of pocket.


•Give me a call with any questions you may have.

Friday, March 12, 2010

DEpreciation News

• Get MORE out of Property Investing!
• Pay As You Go Variations – Put Extra Money in Your Pocket Weekly
• Improve Your Financial Position – Not the ATO's!
• Construction Costs Per Square Metre

In the 2008-2009 financial year, the Australian Taxation Office (ATO) reviewed 28,400 tax returns resulting in revenue adjustments of $65.1 million. They also sent 134,800 letters to individuals explaining how to declare rental income and claim rental property deductions correctly.
In the event of an audit, it is essential that Property Investors have a tax depreciation report prepared by a specialist Quantity Surveying firm who will stand by their report and answer any questions asked by the ATO. Not only will this ensure that personal risk is minimised but it will also maximise depreciation deductions.
If an individual is already claiming property depreciation, BMT Tax Depreciation can review the claim or existing report, free of charge. This is to ensure the correct legislation and methodology has been applied, as well as making sure the Investor is maximising their entitlements. Over the past few years, BMT Tax Depreciation has provided its clients with a free review of existing depreciation reports. In a large percentage of these cases, the Investor was missing out and BMT helped them tap into this extra cash.
In all cases, BMT Tax Depreciation will identify any discrepancies, make sure deductions have been maximised and determine if the correct methodology has been used.
Investors who have not been maximising their deductions or claiming depreciation previously are allowed to go back and amend the previous two financial years tax returns. The BMT Report easily facilitates this.
Property Investors: Choose your Tax Depreciation Specialist Carefully - A Recent Case Study
Recently, a Property Investor saw BMT’s free review offer and emailed four reports they had obtained to review@bmtqs.com.au for analysis. After BMT reviewed each report and advised the Investor that they had missed out on deductions, the Investor engaged BMT to prepare four new reports. The following points were noted when analysing the original reports (produced by another organisation):
Property One, Strathfield NSW – Report Feedback:
• Some plant and equipment items were missing. Certain assets should be in every residential dwelling. The following were missing from the report: range hood, oven, bathroom accessories, door closers and smoke alarms.
• Some items were under valued. It is not just the cost of the asset to consider – there are also installation costs and extras like preliminary costs and consultant fees.
• The report calculates depreciation for 5 years and then projects the depreciation for the remainder, making the figures difficult to justify later. • The Investor agreed to have another report completed by BMT. Additional deductions identified totalled $61,640.
Property Two, Fortitude Valley QLD - Report Feedback:
• The legislation/effective lives that were being used to depreciate items were incorrect.
• Some plant and equipment items were under valued.
• The depreciation on the building structure was under valued.
• The item 'Furniture and Fittings' was used in the report to cover a number of items such as televisions, beds, lamps etc. These can and should be itemised separately to apply increased depreciation rates to qualifying assets. As it was not itemised in the report, deductions were not maximised.
• The Investor agreed to have another report completed by BMT. Additional deductions identified totalled $33,831.
Property Three, Hawthorn VIC - Report Feedback:
• Report only calculates the depreciation for 1 year then projects for only 10 years. The report should last for 40 years to outline total deductions.
• Calculations were incomplete, meaning the accountant will have to calculate them (taking extra time, increasing accountant fees and possibly missing out on deductions).
• Some plant and equipment assets were under valued.
• The depreciation on the building structure was under valued.
• The Investor agreed to have another report completed by BMT. Additional deductions identified totalled $20,264.
Property Four, Adelaide SA - Report Feedback:
• Some plant and equipment assets were under valued.
• The depreciation on the building structure was under valued.
• Low value pooling was not utilised.
• The Investor agreed to have another report completed by BMT. Additional deductions identified totalled $7,136.
Comparison
Once BMT Tax Depreciation had completed new reports for the four properties mentioned above, a total of $122,871 in additional depreciation deductions was identified. This made the process well worthwhile for the Investor.



BMT figures based on the diminishing value method of depreciation.

Pay As You Go Variations – Put Extra Money in Your Pocket Weekly!
An often overlooked way in which Investors can improve their weekly cash flow is through a pay as you go (PAYG) variation. The PAYG system is a method of tax collection that was introduced in July 2000 to replace previous versions of the same system, such as pay as you earn (PAYE).
PAYG instalments are a system for paying instalments towards your expected tax liability on your business and investment income for the current income year. A PAYG variation is an application to the ATO requesting that your employer reduce your weekly/fortnightly tax payments to reflect set deductions like depreciation on a rental property. In essence it is a way of decreasing the amount of tax you pay each fortnight to help with your week to week cash flow. Rather than a tax return at the end of the financial year, it is equivalent to receiving small portions of your return each week. The flexibility this gives the Investor, combined with depreciation deductions identified by your Quantity Surveyor, can be of great help in managing investments and mortgage repayments.
Let’s consider a hypothetical situation;
You have just purchased an investment property. If you were to take your potential tax return, including the extra deductions gained from your investment property, and divide it by 52 weeks, this would give you the approximate amount your tax is reduced by per week - creating the extra cash flow.
BMT Tax Depreciation makes it even easier for you when you consider the extra tax deductions we are able to identify for an investment property. Talk to your accountant about PAYG variations and increase your weekly cash flow!



Improve Your Financial Position – Not the ATO’s!
Investors are often surprised by the amount of items they are able to claim depreciation on inside and outside of their investment property. The following outlines the plant and equipment deductions available room by room in a residential property and a single level office. It also provides examples of the assets that can be claimed. Each scenario provides an average of the total depreciation claim per room.
Depreciation: Room by Room
Bedroom
• Carpet, Blinds
• Air conditioning, Ceiling fan
• Gas heating systems
• Smoke alarm
Depreciation claim
for
bedroom
$6,000
Bathroom
• Blinds
• Heat, light and exhaust units
• Bathroom accessories - freestanding
Depreciation claim
for
bathroom
$4,000
Family Room
• Floating timber floor, Blinds
• Lighting, Air conditioning, Ceiling fan
• Gas heating systems
• Smoke alarms
Depreciation claim
for
family room
$10,500
Kitchen
• Floor coverings, Blinds
• Cook top, Oven, Rangehood
• Microwave, Dishwasher
• Lighting, Exhaust fans, Air conditioning, Ceiling fan
Depreciation claim
for
kitchen
$7,500
Outdoor areas
• Automatic garage door – motors/controls
• Garbage bins, Hot water systems, Pool/spa pumps
• Pool cleaner, Garden watering installations
• Outdoor furniture (including table and chairs)
• Outdoor gas heaters, BBQ
Depreciation claim
for
outdoor area
$13,000
Single Level Office
• Carpet, Lift, Fluorescent lighting, Fire alarms
• Air conditioning, Door Closers, Fire exit sign
• Fire hose reel, Instant hot water unit
• Bathroom accessories, Blinds, Hand dryers
• Partitioning, Security system, Signage
Depreciation claim
for
office
$32,000

BMT figures based on the diminishing value method of depreciation.
It is vital to get a depreciation specialist, like BMT Tax Depreciation, to prepare a tax depreciation report. Maximising the plant and equipment items within an investment property can generate thousands of dollars at tax time.
A BMT Tax Depreciation specialist will visit the investment property to identify and photograph all plant and equipment assets (Division 40) ensuring that the deductions are accurate and every asset is included. They will take detailed measurements, noting the construction method used, to accurately determine the historical construction cost of the property. BMT only use our own fully trained staff for site inspections, ensuring that if you are audited by the ATO, we will stand by our report and answer any questions they may have.
While the above examples have only considered the Division 40 deductions available, it is important to remember that the building may also qualify for capital allowance deductions; depending on the year construction was completed. Consult a BMT Tax Depreciation specialist for an obligation free assessment of your investment property if you are unsure about your entitlements

Construction Costs Per Square Metre - Sydney
Construction Type Level of Finish
Residential Low Medium High
3br brick veneer project home, level block, shelf design $980 $1,250 $1,580
Architecturally designed executive residence $2,100 $3,250 $4,900
3br, 2 level brick veneer townhouse, including allowance for common property $1,260 $1,480 $2,200
3 level walk-up unit complex, concrete structure ground floor parking $1,420 $1,700 $2,200
Multi-level apartment building, including lift and basement car parking $1,600 $1,970 $2,940
Commercial
1-2 level open plan offices, including A/C, excluding fitout $1,260 $1,490 $2,160
1-4 level open plan offices, including A/C & lifts, excluding fitout $1,280 $1,510 $2,224
4-8 level open plan offices, including A/C & lifts, excluding fitout $1,520 $1,850 $2,325
8 levels and over, including A/C & lifts, excluding fitout $1,820 $2,064 $2,689
Industrial
High Bay Warehouse, standard config, concrete floor, metal clad (size < 3500sqm) $800 $900 $980
High Bay Warehouse, standard config, concrete floor, metal clad (size > 3500sqm) $790 $885 $950
High Bay Warehouse, standard config, concrete floor, pre-cast concrete wall clad (size < 3500sqm) $900 $990 $1,100
High Bay Warehouse, standard config, concrete floor, pre-cast concrete wall clad (size > 3500sqm) $890 $970 $1,050
Retail
Suburban shopping mall area including A/C $1,295 $1,620 $1,950
Bulky goods centre, concrete tiltup construction, including A/C, excluding fitout $1,100 $1,325 $1,490
Supermarket, including A/C, excluding fitout $1,280 $1,400 $1,530
Specialty shops, including A/C, excluding fitout, services capped $1,080 $1,250 $1,500
Hotels/Motels
Single level boutique motel, including A/C guest facilities $1,860 $2,390 $3,000
Single level tavern/hotel, including A/C, excluding loose item fitout $1,650 $2,050 $2,200
Licensed club, including A/C, bar, lounge, rec facilities $1,600 $2,100 $2,800
Multi-level, 3 star hotel including A/C, restaurant, bar, common facilities $2,380 $3,100 $3,500
The above rates are exclusive of GST. Please visit www.bmtqs.com.au for more information.

Sunday, March 7, 2010

Facebook | David Grubb Real Estate

Facebook | David Grubb Real Estate

Couples work twice as long for a house | News.com.au

Australians work twice as long to pay for a house as they did 50 years ago.

AUSTRALIANS have to work almost three times harder to pay off the average family home than they did 50 years ago.

Figures compiled by CommSec for The Sunday Telegraph reveal homebuyers on the average income now have to work for 19,374 hours to buy the average Australian house with the average mortgage.

Based on an eight-hour day and a five-day working week, that equates to about 10 years of work. In reality, it takes much longer to own a home, because wages must pay for all living expenses, not just housing.

In 1960, it took homebuyers just 7500 hours to pay off the average mortgage.

CommSec chief economist Craig James said that half a century ago, average wage-earners took home the equivalent of $1.08 an hour.

They needed to work 25 hours to meet the monthly mortgage repayment of $25, based on an average five per cent interest rate and a mortgage of $4620.

Start of sidebar. Skip to end of sidebar.
Related Coverage

* Sydney property: Broken dreams

* Families gripped by financial hardship NEWS.com.au, 29 Aug 2009
* Jobless rate to affect mortgage payments The Australian, 13 Aug 2009
* There goes the holiday Herald Sun, 7 Jul 2009
* Reverse mortgages put to good use Adelaide Now, 22 Jun 2009
* Reverse mortgages used wisely The Australian, 3 Jun 2009

End of sidebar. Return to start of sidebar.

Today, the average worker earning $30.04 an hour spends 70.7 hours - or almost two weeks of the month - at work to cover the monthly mortgage repayment for an average $283,000 loan at a 6.64 per cent interest rate.

The figures show rising costs and growing property prices have largely outstripped wages and young couples today need to work longer and harder to achieve the great Australian dream of owning their homes.

Whereas homes were once affordable on a single wage, families now realistically need two incomes to fund a mortgage. "This is your single biggest purchase," Mr James said. "This is where people are living.

"We're building bigger and better homes, so it was always likely we were going to be paying more in terms of the mortgage - and we're certainly working longer to pay for that.

"We're working longer, but we're probably working more flexibly and in jobs that we like."

Mr James said that in Australia, unlike other countries, there was a lot of pressure to buy rather than rent and homeowners often saw their mortgages as a method of saving.

"Records from the Commonwealth Bank suggest more than 70 per cent of people are paying more than they need to in terms of their home loans, so they're ahead of their loans.

"People see the home as a way of saving; they see it as an outlet for their finances. In other parts of the world, that's not the case, but Australia has always had an affinity with the home.

"In the 1960s, it was a simpler life. Now more money is spent on housing, computers, the internet, mobile phones, whereas before it was food, clothing, transport.

"We do have more opportunities now, but whether we're happier remains to be seen."

Sydney University anthropologist and author Stephen Juan said it now took two incomes and 30 years to pay off the average home. Half a century ago, it was one income and 15 years.

Mortgages costing the average household 29 per cent of its income put huge strains on the family unit, Dr Juan said.

"With that kind of inflation for the biggest item a middle-class family buys in their lifetime, which is the family home, when you have that kind of colossal increase that has been greater than the percentage increase in salaries - that's the reason we have the crunch.

"There's so much pressure on us. We're losing our leisure time, we're losing our time for families, we're having to commute further and further to get to work, we're finding it more and more difficult to pay our mortgages.

"Economically, we're being really stressed, and there's not enough time to do everything we have to do."

Dr Juan said that 50 years ago, promises of technology brought predictions of an easier life and more time available for family and healthier lifestyles.

"It was said we would have more time and be a leisure class because the machines would do the work," he said.

"What has happened, however, is that you have to pay for these materials and for this technology.

"We've got better technology and better leisure-time activities available, but we don't have the leisure time. It's a catch-22."

Murray Robson and Fiona Kelly consider themselves and their children Dylan, five, and Liam, three, to be an average Australian family.Both parents, in their mid-30s, work hard to provide for their young family and pay off the remaining $315,000 of their mortgage on a three-bedroom fibro house at North Narrabeen.

The couple bought the property in 2002 with a $515,000 mortgage, on which they repay almost $2400 a month.

Ms Kelly, a television scriptwriter who works from home four days a week, told The Sunday Telegraph it was hard to juggle mounting daily expenses and the cost of the mortgage and have much left over.

"There's not much time and money for ourselves," she said.

"I basically work when the kids are at school and kindy and at night to get everything done, so there's no watching TV at night.

"Maybe Saturday nights are the only time when I'm not doing stuff in the office. When the kids go to bed, you do more work or try and get housework done, and you're always tired. It's exhausting.

"But at the end of a long day it was all worth it," Ms Kelly said.

"It's worth it if you can get the moments where you take some time off and just have fun together," she said.

"You have to say, 'Let's just go to the park and play cricket' or 'Let's go for a nice walk.'

"The shopping will get done - we're not going to starve."