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How To Be In The Top 1% Of Australians - YouTube
How To Be In The Top 1% Of Australians

Unless you’re in the top 1% of Australians, you’re going to be left with very little to retire on. Only the top 1% are going to be retiring on their current income or more.

Interestingly, over the last 20 years, the number of Australians investing in property has increased from just 6% to 18%.

The reason so many people are turning to property is because more people are realising that they have to fund their own retirement. The pension is no longer enough, and more people are coming to terms with the fact that they cannot rely on the government to pay for their retirement.

An aging population can’t be sustained by a shrinking working class – it’s just not feasible. Your parents or your grandparents may have been able to live off the pension and their family home, but this strategy isn’t going to be an option for future generations.

So, how are people ensuring that they end up in the top 1%? By investing in property successfully.

Most property investors are, unfortunately, going about it the wrong way, investing without a proper education or support, and as a result, they’re missing opportunities that could help them get ahead.

A few more stats for you… of the 18% of Australians who do invest in property, only one-third of them has two or more properties. And only 7% of investors (or 1% of Australians) own three or more properties. People are getting stuck in their property investing journey because they’re making mistakes, buying poor cashflow properties in low-growth areas – it stunts the growth of their portfolio and prevents them from being truly successful.

An investment in knowledge pays the best interest.

  • Benjamin Franklin

If you want to be in the top 1%, it’s going to take education, action, and support. If you’re not getting those things, you’re missing out! If you are going to be successful, if you’re going to be the top 7% of investors, or the top 1% of Australians, what’s it going to take for you to be successful? Well I’ll tell you what it’s going to take. It’s going to take education, it’s going to take action, and it’s going to take support.

If you don’t do these things, don’t be surprised if things don’t work out the way you’d hoped!

ADF or Ex ADF Member? CLICK HERE
Not an ADF Member? CLICK HERE

Happy property investing!

Daimien J Patterson

Daimien Patterson is the CEO of Integrity Investment Properties, a property investment company based in Australia. He regularly produces books, blogs, and videos on the topic of property investing. Head to [integrityinvestmentproperties.com.au] for your free copy of Daimien’s book, Safe as Houses. 

The post How To Be In The Top 1% Of Australians appeared first on Integrity Property Investment.

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Reality Bites - Cost Of Renovating For Profit - YouTube
Reality Bites – Cost of Renovating For Profit

There’s a lot of misinformation floating around at the moment, from the media and popular TV shows that one of the best ways to make money through property is to renovate. Essentially, you buy something that is in poor condition (usually quite old), but in a good location so that it has potential to be valued at more. Then you “do it up” yourself as quickly as you can and then sell it for a profit.

Is this a good strategy? In short – NO!

Three Resources

In life, you have three resources:

  1. Time
  2. Money
  3. Resilience

Renovating a property takes up a considerable amount of all three. Do you have enough to do what it takes to succeed? For most people, I would say no.

Reality TV Isn’t Real

On TV, renovation looks fun and a bit sexy, right? You see these people frolicking around with tools, couples having paint fights, and getting to pick out their favourite coloured subway tiles for the kitchen splashbacks and perfectly matched décor for the bedrooms. In reality, though, it’s not like that at all. What you don’t see behind the scenes is the army of tradies that are helping them (and doing the bulk of the work!), and you often forget that these people have taken time off work to be on TV.

The ACTUAL Realities of Renovating

For everyday people, here’s what renovating a property really looks like:

  1. You go to your day job
  2. You finish work, but you don’t go straight home to relax because tonight you have to paint that wall…
  3. On your way home, you pop into Bunning and buy a whole heap of stuff
  4. You throw the receipts on the floor of the car because you’re just too caught up in the action to track the true cost of your renovation
  5. You run out of time (and mental energy) to plan and prep dinner, so you go to KFC drive thru on your way home and stuff your face while you drive. After all, your kitchen is half torn apart with the renovation and you just don’t have time because you really need to get that wall started.
  6. You get home and start painting
  7. Stopping just doesn’t seem like an option so you keep going until you’re finally finished at 1am
  8. You collapse on the paint-covered couch, only to be woken 4 hours later by your phone battery dying because you forgot to plug it in
  9. You get up, shower, and go to work
  10. Then you repeat the whole process again the next day because, as luck will have it, your house actually has another 10 walls that need painting

As it turns out, this renovation that you thought might take around 3 months is now coming up on 3 years. Does that match up with your renovation dream? Does that sound romantic to you? Does that even sound feasible with your current level of energy, resilience, and finances? Probably not.

Let’s not forget that most people also have a partner relying on them, expecting them to spend time together. Chances are, your wife is just about ready to pack her bags and go at this point… or if you’re the wife, you’re about ready to leave your husband!

What’s the True Time and Cost of Renovation?

Before you jump on the renovation train, let me urge you to do the numbers.

Firstly, work out how much time it will really take you to do that renovation. Include the time you’d spend finding the property, setting up the finances, getting the purchase finalised, cleaning, demolishing, purchasing, decision making, actually renovating the rooms/exterior, fixing broken stuff, getting it ready to sell, finalising the sale… etc. How many months or years of your spare time is it going to take up? How many hours does that work out to be?

Now, work out how much money you’ll need to put into it during the purchase, renovation, and then selling it. Include stamp duty, legal fees, all of the big/small Bunnings purchases you’d need to make along the way, marketing costs, agent’s commission, and capital gains tax. And after all of that, what’s your profit? How much money are you actually likely to get once you sell it?

Finally, work out what you’d have to pay yourself if you were earning a wage for the time you spent on that renovation. You’re probably earning $40 an hour in your day job. If you divide the profit you’d make on the renovation by the time you’d need to put into it, you’ll most likely be earning closer to $3 an hour. Is that really worth it?

Here’s the hard truth: you lack the skills, the time, and the money to make it out the other end and still have a worthwhile investment.

Who Can Successfully Renovate?

There are only two specific types of people with the skills to succeed with a renovation strategy, as long as they also have the time and money. If you lack these skills, it’s best to steer clear.

  1. Tradies

Tradies who have the relevant skills to complete or manage a large portion of the renovation can sometimes make it work, if they have the time. This is because they can work efficiently and often have mates who are tradies who they can call on for help.

     2. Project Managers

People who are good at managing projects and have a good understanding of what’s required can potentially hire and manage the tradies needed to get the work done efficiently.

If you fall into either of those groups and have the time, skills, and money to do a renovation, it might work for you. It might not be the best strategy, but you also might not do too badly. For everyone else, renovation is only going to cost you time and money you don’t have because you’re slow and unskilled.

How do I know all of this? I tried it myself in my early property investment endeavours. I know firsthand what can go wrong and how much it eats into your time and money. I’ve seen family and friends make the same mistakes time and time again.

Please don’t let that be you too.

ADF or Ex ADF Member? CLICK HERE
Not an ADF Member? CLICK HERE

Cheers,

Daimien J Patterson

Daimien Patterson is the CEO of Integrity Investment Properties, a property investment company based in Australia. He regularly produces books, blogs, and videos on the topic of property investing. Head to [integrityinvestmentproperties.com.au] for your free copy of Daimien’s book, Safe as Houses. 

The post Reality Bites – Cost Of Renovating For Profit appeared first on Integrity Property Investment.

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Integrity Property Investment - Investme.. by Jaeson Cortez, Integrity Property I.. - 9M ago
Why I Became a Capitalist Pig - YouTube
Why I Became A Capitalist Pig

I’ve talked about this before, but it’s definitely worth touching on again. There’s something that I see happen time and time again with my clients that can massively impact on their ability to reach their potential.

Here’s the thing…

You need to stop talking to your family about your property investing!

Hang on a second. Your family loves you, right? They want to be included in your life happenings… like your relationships, children, holiday plans and more… so why not property investing?

90% of Australians fall into the low to middle income bracket. Chances are this includes your parents (and if it doesn’t, I’ll talk about that in a bit). The way that people in this group think and act around money is not going to contribute positively to your wealth creation journey.

Let me illustrate this with a bit of a story…

Tall Poppy Parents

As you probably know, I’m involved in a fair bit of youthwork, which puts me in contact with young people and schools a lot. One day, I was having a conversation with the principal from a school in Brisbane which was in a disadvantaged area.

This principal was telling me a story about some of the families he sees come through the school. One thing he likes to do is ask them, “What do you want for your children?”

The response is always, “We want our children to get the best education and we want them to have all the things that we missed out on.”

Which is great, right? What parent doesn’t want the best education and the best things for their kids? Nobody is going around saying they wish their kids were worse off!

And so, these parents work hard to encourage their children at school and make sure they have everything they need to do well there. And generally, the kids will do well as a result! They’ll head off to university (or wherever) and get set up in a job that pays well, get themselves a nice car, and generally be considered successful.

What’s interesting is that as a young adult, this child will return home to his or her parents for a visit, expecting them to be (rightly) proud of their achievements. But quite often, the opposite will occur.

Their parent will say to them, “Don’t you walk in here thinking that you’re fancy because you’ve got a nice car and brand name clothes. You remember who put you through school. You remember who gave you the shirt off your back.”

It’s the tall poppy syndrome at work. Even though these parents wished for their kids to be better off, when it actually happens as an adult, they’re uncomfortable with it. So, they try to tear them down. It’s sad to see, but it happens all the time.

Are You a Capitalist Pig?

I know it’s a common occurrence, because it happened to me.

When I left my career as an officer in the army and decided to go into property investing full time, my father asked me, “Why are you leaving the army? It’s a very good job.”

I explained that I was ready to do something else, and then he said, “What, are you going to become a capitalist pig, are you?”

That’s right, my own father said that!

And of course, I love my father and I know that he loves me, so I had to stop and think for a moment before I responded. And I realised what was going on here. Something in him had been triggered by me deviating from a path and wealth that he was comfortable with. When I realised that, I simply responded with, “Yes, dad, that’s exactly what I’m going to become. A capitalist pig.”

Here’s why I’m okay with being a “capitalist pig”… our society owes a lot to capitalism!

Before capitalism, we had to run our own little farms just to survive, wash our clothes by hand and do everything from scratch. If it wasn’t for capitalism, investing, money, and wealth creation, our society wouldn’t have been able to advance like it has.

Be Careful Who You Talk To

So, here’s the thing, when you’re getting into property investing, be very careful to avoid mentioning it to people who just don’t get it. If you want to chat to somebody, find someone who’s done it or are currently doing it! If you want to talk to your family, find another topic of conversation.

In my experience, if you bring up property investing around someone who isn’t in that space, 9/10 times, they’ll try to steer you away.

Be aware that the people you listen to, are the people you’ll turn out like. If you’re okay with the same financial outcomes as your parents have, go ahead and follow their advice. In fact, if your parents are in the 1% and have plenty of money, I’d strongly recommend that you do that! Take them out for lunch this weekend and ask them to tell you how they did it and learn as much as you can off them.

But if your parents are like the majority and aren’t financially successful, stop taking their financial advice, and leave them out of your financial/investing conversations.

ADF or Ex ADF Member? CLICK HERE
Not an ADF Member? CLICK HERE

Happy property investing!

Daimien J Patterson

Daimien Patterson is the CEO of Integrity Investment Properties, a property investment company based in Australia. He regularly produces books, blogs, and videos on the topic of property investing. Head to [integrityinvestmentproperties.com.au] for your free copy of Daimien’s book, Safe as Houses. 

The post Why I Became A Capitalist Pig appeared first on Integrity Property Investment.

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How Do We Make Money When Our Services Are Free To Clients - YouTube
How Do We Make Money When Our Services Are Free To Clients?

This one is for the sceptics, the curious ones, and those who just can’t help themselves! Today I’m going to tell you how my company makes money even though our services (after the initial consultation) are free to clients.

As a consumer in a free market, you have two main choices in how you can purchase a property:

1. Local Real Estate Agent

The first option, which is what most people choose, is to buy off their local real estate agent. Usually it’s a property within their local suburb, or perhaps they found it off realestate.com.au in a location they think will do well.

The problem with buying from a local agent is that you’re limited to what they’ve got available, which may or may not be a good investment property. Your local real estate agent does not specialise in property investing – their criteria for listings is whether it’s within driving distance or not and if they’re going to get commission from a sale. If you asked them whether the property you’re looking at is a good investment opportunity, of course they’re going to say yes!

A local agent starts with the property, and then will happily sell it to anyone who walks in their doors.

 2. Property Investment Firm

The second option is to buy through a property investment firm. I can’t speak for all property investment firms, but I can talk you through our process to help you understand how we work and how we make our money so that you can decide if that’s the kind of system you’d be comfortable with.

Firstly, the biggest difference between us and a local agent is that while they start with the property listing (which they need to sell), we start with the client (and find them a suitable property to meet their needs). Because we start with our clients first, we take our time with understanding their situation, put together a plan, and take extremely good care of them.

At this stage, we do charge a small fee ($495 unless you’re lucky enough to take advantage of a special offer) to put that plan together, but once that fee is paid, our clients have access to our services for life.

Our next step is to do detailed research to find out where in the country is suitable for investing – a location that offers low risk and is going to boom and make good money in a timeframe that works for the client’s situation. We inform our clients on the best location(s), and only then do we start to source the best properties in those areas. Once again, this is very different to a local agent who is limited to properties within a very small radius.

The way this normally works with us is we’ll find a reputable builder in that location to build an ideal property for you. This means you get a new property with structural guarantees, builder’s warranties, higher depreciation (in other words, big tax return and better cashflow), better tenants, and low maintenance.

When we approach the builder, we explain that we have clients who need investment properties, and we check that they meet our strict criteria. The builders are then happy to pay us a referral fee for bringing our clients to them. This is the main source of income for my team.

The builder is more than happy to pay this fee because their alternative options include expensive sales and marketing fees. As a builder, the standard marketing strategy is to build a display home and man it with salespeople, and then advertise so that people come and visit this display home, all of which costs a lot of money. So, our referral fee simply comes out of their marketing budget.

As a buyer, it’s important to be aware that you will pay for this referral fee, commission, or marketing cost as part of purchasing any property, whether it’s from a local agent, a private seller, or a property investing firm like us. It’s built into the cost of the property.

The difference is when you purchase a property through us, you get all the added extras like research, training, ongoing support, and access to expertise. And you know you’re getting the best possible property for your portfolio, rather than being limited to a local agent’s listings. We’ve designed our model so that you get access to all of our services without being out of pocket. Essentially, you get a service for free, and we get paid for taking good care of our clients. It’s a win-win!

So… what should you do?

Above all, it’s very important that you get professional help, no matter who you decide to go with. Is it really a very good idea, as an amateur, to invest without help? You’re playing with hundreds of thousands of dollars here… the stakes aren’t small. Take things seriously and get experts to help you on your property investing journey.

If you haven’t bought an investment property yet because you’re scared of getting ripped off, or you’re avoiding a property investment firm because you think they’re just out to make money off you… I strongly suggest that you simply do your due diligence. Ask the right questions. Find out how they make money and if they follow a client-first process with research and other extras that really benefit you (like we do).

Accept that no matter which way you go, you will be paying the same marketing fees/commission with your property, in the end, it comes down to the kind of care you want to receive as a client. If you want the extra help and an expert working for you, not just for the sale, a property investment firm would be the logical choice.

I’ve explained to you how we get paid. It’s actually pretty simple, but it makes sense and benefits everybody. As you can see, I’m very open, honest, and transparent about my business and its processes, so if you have any further questions, I’d be happy to answer them. Please feel free to drop me a line!

Or, if you’re ready to start your journey with a company like mine, please do get in touch so we can start the process rolling!

ADF or Ex ADF Member? CLICK HERE
Not an ADF Member? CLICK HERE

Cheers,

Daimien J Patterson

Daimien Patterson is the CEO of Integrity Investment Properties, a property investment company based in Australia. He regularly produces books, blogs, and videos on the topic of property investing. Head to [integrityinvestmentproperties.com.au] for your free copy of Daimien’s book, Safe as Houses. 

The post How Do We Make Money When Our Services Are Free to Clients? appeared first on Integrity Property Investment.

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Can You Still Get Positive Cashflow Properties? - YouTube
Can You Still Get Positive Cashflow Properties

Some people believe that the days of doing well through property investing in Australia have been and gone. The opportunity has past, and would-be- investors may as well give up before they even start.

I’m here to tell you that this is a myth!

You can still find incredible investment opportunities in Australia, including positive cashflow properties. They’re not unicorns – they’re real! They do exist. You just have to know what you’re doing, where to look, and how to set it all up.

Know the Factors

The first thing you should know is that rent is only one part of the equation. There are nine factors that influence whether a property will be positive or negative cashflow. This means that a property that seems to have great rental yield might not be such a good option, while another property that has lower rental yield can actually be positive cashflow.

You have to know the factors so that you can identify a property that can pay for itself. I’ve talked about these factors in depth in another post, so I’ll just touch on them here. They are:

  • Rent
  • Tax return
  • Depreciation
  • Loan repayments
  • Body corporate fees
  • Rental management fees
  • Council rates
  • Insurances
  • Maintenance

If you work on increasing the first three factors, and minimising the next six, you’ll be well on your way to a positive cashflow property.

Don’t Go Commercial

A lot of people who don’t know what factors to look for (other than rental yield) will often start looking into commercial property, as the rents can seem pretty attractive. However, one problem with commercial is that banks will only lend you about 60%, instead of 90% for residential. In addition, commercial comes with many other issues like high vacancy rates that are going to each into your cashflow.

So, don’t go commercial. You can get positive cashflow residential properties if you know what you’re doing.

Cashflow Wins!

My team and I only present properties to our clients that are positive cashflow. And these are properties that we find in the best investment locations around the country. I know firsthand that they exist because I see them every day.

Here’s why we believe this is so important: you can only own a limited number of negative cashflow properties before your disposable income runs dry. But you can grow your portfolio with an infinite number of positive cashflow properties because they pay for themselves!

If you’re interested in these kinds of opportunities, get in touch and we will help you get into those properties.

ADF or Ex ADF Member? CLICK HERE
Not an ADF Member? CLICK HERE

Cheers,

Daimien J Patterson

Daimien Patterson is the CEO of Integrity Investment Properties, a property investment company based in Australia. He regularly produces books, blogs, and videos on the topic of property investing. Head to [integrityinvestmentproperties.com.au] for your free copy of Daimien’s book, Safe as Houses. 

The post Can You Still Get Positive Cashflow Properties appeared first on Integrity Property Investment.

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Using Australian Defence Force Entitlements for Investment Property Purchases Those who’ve served in the Australian Defence Force have access to various entitlements. You can use some of these to purchase an investment property. This article covers the key information that you need to know.

If you’re serving in the Australian Defence Force (ADF), you may run into some issues when buying property. The biggest among these is often having little time to focus on the purchase. Your work commitments pull you away from the purchase, which can lead to it stalling.

Moreover, many also don’t realise that they can use their various entitlements to help them along. Here’s a case study to show you the basics.

Case Study: Daniel Breeze*

We recently worked with an ADF client named Daniel Breeze. Daniel lives overseas and often relocates due to his work commitments. Despite this, he had an interest in buying an investment property. Before coming to us Daniel completed his own research and began working with a broker. But as is often the case, this broker didn’t have lots of knowledge about the negatives of cross-securitisation and how it can leave an investor over exposed. This broker also didn’t communicate very well. So Daniel started losing confidence in him. More than that, this broker didn’t understand Daniel’s unique situation as an ADF client.

Bottom line: Daniel experienced an early setback and had to delay his purchase.

Then, a friend connected him to our team at Integrity Property. After Daniel relayed very specific instructions about the type of property he wanted, we scheduled a strategy session. During this session, we spoke about his current financial position and what he wanted to achieve. We also spoke about the entitlements that could aid his purchase.

Daniel also had an ADF Super fund in addition to money that he’d saved himself. But he had one big problem – he couldn’t dedicate the time that he needed to his research. That’s where our team saved the day for him by:

  • Identifying growth hot spots
  • Helping him find tenants for his property.
  • Negotiating a great deal
  • Knowing the ins and outs of ADF entitlements and then using them to his advantage.
  • Making it all happen while he was on overseas deployment.

What’s most exciting is Daniel was so confident that he didn’t purchase one property… he bought two! And we oversaw it all from the documentation to the build process.

Integrity Property arranged the building inspections and the creation of a depreciation report. Plus, we organised all the relevant insurances, too. With the paperwork completed, the final fixing process ran smoothly.

From there, our Rental Manager secured tenants for both properties immediately. Before long, Daniel started receiving income, with one property attracting a higher rent than expected!

The Key Entitlements For The ADF

Let’s say you want to own one – or even two – properties like Daniel and you want to take advantage of all your entitlements. Which entitlements are you eligible for and which can help you buy property?

The following is a rundown of all of the relevant entitlements:

  • First Home Owners Grant (FHOG). The FHOG isn’t an ADF entitlement. Instead, it’s an entitlement that’s available to anybody who’s buying their first property. This means that it’s not available to you if you’re buying a second home. Each state has different criteria in place for the FHOG. You may face caps on the value of the property that you can purchase. But the FHOG will also give you several thousands of dollars to work with if you meet the criteria.
  • Live-In Accommodation (LIA). You may choose to live in ADF-provided accommodation. If so, you’ll pay LIA for the privilege. The amount that you pay depends on your rank and the number of beds in the room. The quality of the accommodation is also a key factor. However, you may not have to pay if you’re stationed in LIA temporarily. This only applies if you have a permanent residence elsewhere.
  • Home Purchase or Sales Expenses Allowance (HPSEA). This scheme ensures that you’re not penalised for owning your own home while in service of your country. It focuses on the costs you incur when selling a home and buying a new one. This typically happens because the ADF has moved you to a new location. The entitlement starts with the purchase of an eligible home. If you have to change location afterwards, you have two years to sell the old property and four years to buy a new one. You can claim HPSEA if you meet those conditions.
  • Married Quarter (MQ). Like LIA, this is a fee that you pay to the ADF for living with your spouse in an MQ. The amount paid per year can rise to about $15,000.
  • Defence Home Ownership Assistance Scheme (DHOAS). You must meet several eligibility requirements to access DHOAS. Firstly, you must have served in the ADF within the last couple of years. Moreover, you must have completed your Qualifying Period of Service. In doing so, you must also have gained a Service Credit. Permanent members must serve for four consecutive years to gain the entitlement. The countdown to eligibility resets if you take a break from service. Once you receive your Service Credit, you can pay it into a DHOAS home loan.
  • DHOAS Lump Sum. A secondary part of the DHOAS scheme, this allows you to receive your entitlement as a lump sum. You can convert a maximum of four years of Service Credit into a lump sum. Currently, this would result in a $10,608 sum. However, you can’t use this sum as a deposit on a new home. Moreover, you can’t claim it if you already own a residential or investment property. As a result, it’s best used by those looking to buy their first home.
  • Rental Allowance (RA). You receive an RA from the ADF if you choose to live in rented accommodation outside of LIA. For investors, it’s often worth claiming RA and staying in rented accommodation. You can then use your purchased property as an investment and make deductions on the interest you pay on your home loan.
  • Home Purchase Assistance Scheme (HPAS). This is similar to the FHOG, but it’s available only to ADF members. For eligibility, you must not have used a previous entitlement. Therefore, the home you buy must be the first home you’ve bought since you started service. The property must also be at the location that you’re posted to and you must live there for at least one year. There are slight adjustments to this requirement if you’re building your own home. You’ll receive $16,949 as part of the HPAS. But you’ll also have to pay tax on the amount. Still, it helps when combined with the FHOG.

Tips for Using Your ADF Entitlements

With so many entitlements available to you, it’s hard to figure out how to use them for an investment purchase.

Here are some general tips that will help you along the way.

Tip #1 – You Don’t Have to Claim Every Entitlement

You may feel a temptation to claim as many entitlements as possible. That’s not always the best idea. For example, claiming other entitlements may prevent you from accessing the HPAS. This could cause serious issues when trying to buy your first property.

Plan ahead and think about the entitlements that will best serve you when buying a property. First-time buyers will often use different entitlements to those buying second or third homes. Investors also have to consider the ramifications of the entitlement they use.

For example, using the HPAS entitlement means you must live in the property for a year. That obviously means that you can’t rent it out and make money from it. If that’s your intention, it may be best to wait and claim another entitlement later on, such as the DHOAS.

Tip #2 – Don’t Assume You Have to Buy Nearby

There are some entitlements that require you to buy a property in the vicinity of your station. This could lead to you limiting your search, which may damage your investment goals. If you’re not stationed in a growth area, you won’t see great returns from your investment.

But not every entitlement requires you to buy a nearby property. The case study above demonstrates this.

Don’t get stuck in the idea that you have to buy a local property. Have some patience and expand your search. Investors want to buy in growth areas. Make sure you’re not saddling yourself with a property that won’t generate a return. Again, choose the entitlements that will serve your needs.

Tip #3 – Have a Cash Buffer

As you can see from the figures mentioned above, an entitlement may not pay for your deposit. In fact, you’re sometimes prevented from using the entitlement as part of the deposit payment at all.

As a result, it’s a good idea to have a cash buffer to aid in your purchase. It may be best to think of the entitlement as an added bonus. It’s something that you can benefit from, but mustn’t rely on. Have the cash needed to complete the purchase available.

This is particularly important when using a lender that has strict requirements for genuine savings. Many lenders ask that 5% of your deposit comes from genuine savings. This is money that you’ve saved yourself over an extended period of time. Moreover, you must save that money in a bank account that’s registered under your name. In some cases, your entitlement won’t count towards these genuine savings.

Tip #4 – Don’t Just Check Your Own Bank

Many new investors make the mistake of using their current bank for their home loan products. That’s a mistake. Your bank only has a small number of products to offer you. Plus, you can’t guarantee that these products are the best ones available in the current market.

Use a mortgage broker to help you to find a better loan. Make sure the broker has experience with ADF entitlements and investment properties. This means that they know what to look for to best suit your requirements. You also want the broker to have access to multiple lenders.

Using the wrong broker may lead to you taking out a bad loan. You’ll have to refinance later, which costs time and money. The same goes if you take out a bad loan with your current bank. Again, it’s all about not placing limits on your purchase.

The Final Word

This article covers the basics of using ADF entitlements to help with the purchase of an investment property. When used properly, they could save you thousands of dollars.

But this isn’t all that there is to know. You need a property expert to help you to deal with the technical aspects of your purchase.

That’s where Integrity Property can help. Our team can help you carry out every step of your purchase in confidence. We also have access to top-quality mortgage brokers who can help you with your purchase.

Do you want to find out more? If so, please attend our…

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Do You Even Care About Property Investing - YouTube
Do You Even Care About Property Investing?

I’ve had a few people ask me lately about why I’m always going on about property investing. I put up a lot of videos and content on it, especially on my Facebook page, and clearly, it’s getting noticed!

So, why am I always talking about it?

  1. You Need It

Firstly, it’s because I know that everybody needs to have an investment property. Everybody needs to hear the messages that I’m sharing. I feel a real sense of urgency to let as many people as I can know that property prices are going to keep going up, the demand is going to keep increasing, and the sooner they act, the better!

It’s not enough to sit on your hands and hope that your superannuation or your savings keep you going in retirement. And you certainly can’t rely on the pension. Everybody needs to invest.

  1. You Can Get Started Now

I also want people to know that they can do it, even if they have no money right now. So, for most people, there’s nothing stopping them from getting started… and it frustrates me that most people don’t realise this! Every day that they don’t own a property, they’re not making any money and just putting themselves further behind.

I don’t want a single one of my friends or followers to get left out or left behind when it comes to property. That’s why I am driven to keep on sharing my message.

  1. It’s More Than My Job

I am very lucky to be working in a field that I am so passionate about, because a lot of the time, it really doesn’t feel like work at all. And yes, clearly, property investing is my job, but it is also a lot more than that.

I was passionate about property before I left my position in the army to work in the industry, and you’ll probably still hear me banging on about it when I’m retired.

  1. You Can Make a Lot of Money!

And of course, a bit part of my passion comes from the amount of money I’ve made from property investing. I can’t help but spread the excitement! After all, I did all of this myself. I grew up in the western suburbs of Sydney and nothing was handed to me on a plate. I did the hard work, saved the money, and invested in property. If I did it, you can too!

So, stop wondering why I keep talking about property! And if it bothers you or makes you uncomfortable, it might be because you know deep down that it’s something you need to look into further.

I would love to help you take the next step. You need this, and you can do it.

Cheers,

Daimien J Patterson

The post Do You Even Care About Property Investing? appeared first on Integrity Property Investment.

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Where Will 100x Teenagers Be At Age 65? - YouTube
Wealth Through Property Webinar Series

Where Will 100x Teenagers Be At Age 65?

I find statistics quite fascinating. It can tell you a lot about the population as a whole, and it can help us know where we want to be, compared to the masses.

A few years ago, the Australian Bureau of Statistics did a report that said that 100 of today’s 15 year old’s would be in the following situation by the time they’re 65:

  • 25 of them will die from premature causes of death
  • 49 of them will be broke (either reliant on the government or forced to work with no money to their name)
  • 16 will have an average income of $390 per week
  • 7 will have an average income of $500 per week
  • 1 will have an average income of greater than $800 per week

What this tells us is that those of us who currently have a full-time job, or earning more than $800 per week, have just a 1% chance of sustaining that income.

Yikes!

To get rich, you have to be making money while you’re asleep.

– David Bailey

Thankfully, the fact that you’re reading this blog suggests that you’ve got a pretty good chance of being in the top 1%. The key is making sure you acquire the right knowledge (congrats on being here to do that!) and take the action.

The post Where Will 100x Teenagers Be At Age 65 appeared first on Integrity Property Investment.

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Why a Good Mortgage Broker Is Your Money Making Ally? - YouTube
Why a Good Mortgage Broker Is Your Money Making Ally?

Have you considered skipping the mortgage broker and going straight to the bank? Before you go ahead, read this post first. You might be about to make a big mistake!

You should always use a mortgage broker when you’re a property investor.

Short-term Gain, Long-term Pain

A lot of people these days are into DIY. They think with a little bit of knowledge, they can just do it all themselves. And that may be the case with some things, but what is the cost?

With your mortgage, you could go directly to the bank, and you might even save a little bit of money in the short-term by doing so. But this is the wrong approach. This short-term gain might result in some long-term pain!

Focus on Making Money

If your approach to wealth creation involves trying to save money wherever possible, you need to do a mindset check. Because it’s not about saving money.

What you need to do is make money. Ask any wealthy person you like. Your attention needs to be focused on making money. And with property investing, the way you make money is by growing your portfolio, owning more properties, and making more money across your assets when the market moves.

A good mortgage broker will help ensure that you can buy more than just one or two properties. Allow me to explain further…

The Difference Between a Good and a Bad Mortgage Broker

It’s not actually enough to get any old mortgage broker. In fact, I’d say that 9/10 of them aren’t that great. Finding a good mortgage broker will make all of the difference as you grow your portfolio because they will put you with the right bank at the right time.

It won’t make a huge difference for your first few properties, but once you get beyond the first few, choosing the right bank might mean the difference between getting approved and rejected for a loan.

You see, even though you have the cashflow (in reality) to afford another property, on paper, the banks all assess you differently, resulting in you hitting a “servicing wall” sooner through some than others. Here are some of the factors they might differ on when assessing your borrowing capacity:

  • Whether they include the rent of the new investment property
  • The amount of loading they’ll add to your interest rate (1-2%)
  • Whether they’ll calculate it based on interest only, or principal and interest
  • The percentage of the rent included (75% or more)
  • Whether you can include your tax return as income or not

The differences between these factors and all of the banks who have different rules around your borrowing capacity can be huge when it comes to getting approved for future loans. A good mortgage broker knows all of these rules and how they apply at different banks, and at what point in your strategy you should go with which bank.

You’ll hit the servicing wall at a different point with each bank, and even though you have equity and cashflow to service your new property, once the banks stop lending you money, you’re stuck and can’t get that extra property. A good mortgage broker will be able to navigate around these rules so that your portfolio can keep moving forward.

Arranging Your Mortgages

A good mortgage broker pulls together all of their knowledge on strategy and the rules for the different available banks to recommend the best possible bank to you. The average person does not have the knowledge or access to do this.

For example, if there was a bank that would lend you $2million, and a bank that would lend you $500,000 in your current situation, which bank should you go with? Most people will say the $2million bank, but this is wrong.

A good mortgage broker would recommend that you go with the $500,000 bank first, because you’ll hit your servicing wall with them quicker. After you’ve borrowed from this bank, the other bank will still assess your borrowing capacity as $1.5million, so you can keep borrowing from them and growing your portfolio.

A good broker will put you with the most restrictive banks first, keeping the most generous banks on hand for your third, fourth, fifth, sixth properties, and so on.

Just Don’t DIY

As you can see, doing it all yourself is not the wisest option. Things may not be as simple as they first look. Find yourself a good mortgage broker (if you need one, I can put you in touch with one), treat them well, and they will look after you so that your portfolio will grow long-term.

Doing it yourself is only going to result to your portfolio coming to a grinding halt. If you want to move forward past this point, you’ll still need to engage a broker… they’ll then need to refinance your whole portfolio anyway to get you out of trouble. It works out to be a lot of extra hassle – it’s must better to get things right from the start.

So, be smart. Think like the 1%. Surround yourself with people who are going to help you, including a good mortgage broker.

Happy property investing,

Daimien J Patterson

The post Why a Good Mortgage Broker Is Your Money Making Ally? appeared first on Integrity Property Investment.

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First Home Owner's Grant Why You Might Want To Avoid It For Your First Property - YouTube
First Home Owners Grant Why You Might Want To Avoid It For Your First Property

Are you eligible for a first home owner’s grant? If so, you’ll definitely want to read this blog.

So, what is the first home owner’s grant?

There are actually a few incentives that you might be eligible for. In Queensland, if you are buying a new house (valued at under $750,000) and are an Australian citizen, and you or your spouse have not previously owned property in Australia, you might be able to get $15,000-$20,000 (depending on the contract date) towards your purchase. In addition, you will have to live in this property for a minimum of 6 months to be eligible. You might also be eligible for a reduced stamp duty.

As a first-time property purchaser, you’re probably itching to go, keen to get into the market as soon as possible. One way you can do this is by using the government’s first home owner’s grant. In total, you could be looking at $30,000-$40,000 worth of benefits, which can go a long way to boosting your deposit and buying a property.

But before you do that, I urge you to look at your strategy and decide if now is really the best time, because the FHOG might actually end up costing you money in the long haul.

Allow me to explain…

It Forces You To Buy Locally

The problem with the grant, is that you will need to live in the property you buy with the grant for a minimum amount of time. This limits you to purchasing within your local area. And your local area might not be a good place to invest at the time.

You see, every capital city in Australia is in a different stage of the market cycle.

What Is the Market Cycle?

 

The property markets all follow a cycle. It starts with a flat period where supply equals demand, which is then followed by a boom. Most booms last about 3-4 years, and then they peak, which is where prices reach the absolute maximum for the cycle. Next, the market has a correction where an oversupply comes on the market, and prices drop to boost sales. Once the supply levels out, the market goes back to another flat period, and the cycle starts all over again.

Buy Where It’s Booming

As I said, every capital city is at a different stage of this cycle. If you are planning to buy in your local area, you need to make sure that the cycle is in the right phase. Is it booming? Are you going to make money in the next couple of years so that your portfolio can continue to grow? Make sure you buy where it’s booming.

If you buy locally and it doesn’t boom, you might miss out on a significant amount of potential growth that you could have got from buying elsewhere. Your portfolio stagnates, and you’re stuck at one, when you could have got to two or three more properties in that same period if you’d bought in the right location.

If your local area isn’t booming, but you’re ready to get your first property, it might be better to take a slightly different approach.

Buy an Investment First, Use Your Grant Later

A smarter strategy that I see very few people employ might be this…

  • Figure out where in Australia it’s booming
  • Buy an investment property there and don’t live there or use your grant
  • Wait for growth and available equity in that property (it shouldn’t take too long if you bought in the right location)
  • Use that equity to purchase in your local area IF it is now booming (if not, keep investing elsewhere until it is)
  • Use the first home owner’s grant on this property and then live in it for the minimum period
  • Move out and rent your property out as an investment property*

* I’ll talk more in other blogs about why it’s smarter to rent your home and own investment properties instead of owning your own home.

Remember, if you want to do well financially, you need to think and act like the 1%, not the 99%. There is a reason why most people don’t even think to do this!

Happy property investing,

Daimien J Patterson

The post First Home Owners Grant Why You Might Want To Avoid It For Your First Property appeared first on Integrity Property Investment.

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