Looking to Buy Property? Why not Use Your Super?

With average capital city house prices up 9% in 2013 to more than $539,000, investing in Australian property can seem like an unattainable dream. But did you know that you can use a self-managed super fund (SMSF) to buy property through your super – and potentially boost your retirement savings at the same time?

3 Reasons to consider Property investment With Your Super
1. Diversify into a high growth asset
A key benefit of SMSFs is that they offer a wider range of investment options than traditional super funds – including direct property. By spreading your savings across asset types, you can help reduce risk and create more consistent returns, while still investing for growth.

2. Build a bigger portfolio sooner
An SMSF can borrow to invest in residential or commercial property, with lenders typically funding up to 70% or 80% of the purchase price. So you can take advantage of low interest rates to build a bigger portfolio now, and potentially earn more income and capital growth in the future. As long as your returns outpace borrowing costs, you’ll come out ahead.
3. Potentially save on tax
SMSFs can use negative gearing to claim a deduction for borrowing expenses, just like individuals. And investing through an SMSF can have other tax advantages as well. Rental income paid to your SMSF is generally taxed at just 15%. And if you are over 55 and commence a Pension in your SMSF, then the rent you receive is tax free. More importantly after commencing a Pension in your SMSF, any capital gain when you sell the Property is also be tax free!

Tips and tricks to bear in mind!
While investing in property through your SMSF can be an attractive strategy, there are a range of rules you need to observe, plus some pitfalls for the unwary. Here are some of the most important.
1. Check your investment strategy.
Like any other investment decision, your property purchase needs to conform to your SMSF’s written investment strategy.
2. Use a non-recourse loan.
SMSFs can only use a limited recourse loan, when purchasing a Property. So if something goes wrong and the fund defaults, its other assets aren’t at risk.
3. Remember the sole purpose test.
Your investment must be for the sole purpose of saving for retirement – which means you can’t use your super to pay off your own home or buy a holiday home, for example.
4. Avoid related party transactions.
It’s also against the law to buy, sell or rent a residential property to or from a fund member, trustee or a relation. That means you can’t transfer a residential property you already own into your SMSF, for example. The rules for commercial property are slightly different, with business owners often choosing to buy premises through an SMSF, then rent them back to the business at commercial rates.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Wealth accumulation experts

Cash flow management

Managing your finances to meet your day to day requirements as well as your long term goals can be a complex task. We help you make it easier.

Diversified investment strategies

We consider a range of complicated issues such as taxation, legislation, protecting your wealth and assets, associated fees and costs, your attitude to risk and the risk of your investments. From that we devise a diversified, low cost investment strategy that meets your goals and needs.

Diversified superannuation strategies

For all of our clients, planning for your retirement starts today, regardless of your age. Putting in place an appropriate, diversified strategy is crucial to achieve your desired lifestyle in retirement. We advise clients who hold super in industry funds, SMSFs, retail funds and in corporate super plans.

Cash management trusts

We encourage clients to structure their cashflow so they know exactly how much is coming in and how much they are spending on a monthly basis. The Cash Management Trust hub is at the heart of this strategy.

Direct shares

Some investors like exposure to a diversified portfolio of various shares listed in the ASX. Quantum Wealth Advisors are experts who can cater to this strategy.

ETFs

For some clients who want exposure to markets, Exchange Traded Funds can be the ideal vehicle to gain such exposure and Quantum offers clients access to a large number of such products.

Managed funds

Using our proprietary research methods, we actively spend much time researching the managed funds which we think will outperform the market over the medium to long term. We can blend active fund managers with passive ETFs or a share portfolio to create a well diversified, strategic portfolio for clients.

We educate our clients

Quantum Wealth Advisors seek to both advice and educate their clients on Wealth accumulation

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Cash and Property most favourable investment

Australia's two most popular investments namely cash and residential property have proved to be the strongest performers in to-days volatile markets, outperforming almost every other asset class and super fund.
According to an analysis of investment returns, residential property has offered the highest total returns during the past three years and cash has come in second place for the past five years.

Love affair for cash and property

Even though the international financial crisis and the economic downturn have both adversely impacted on sharemarkets, managed funds and the commercial property, Australia's love affair with residential property and cash has paid off.
Most residential landlords are still sitting on a strong capital gain, while other assets have fallen by up to 40 per cent. Landlords have also had the benefit of rising rental income as population demand for housing continues to increase.
Even the risk-free cash investors are sitting pretty enjoying some of the strongest returns for the last five years.
SuperRatings an independent superannuation research company stated that it was no surprise that cash had performed well.
Nathan Macphee SuperRatings chief operating officer stated that in almost all time period's cash was in front, however these investors had missed out on the big upturn of the past few months. If one looks at the last three months there has been a profound upturn across all the investment options except for cash.

Invest according to your risk profile

Mr. Macphee further stated that what it showed is that people needed to invest in the option that suited their risk profile, which meant they had to decide if they could survive a downturn like the one we had. If they can't survive for a couple of years in a downturn, then the lower-risk cash option is more appropriate.
However if they were investing for the long term and the majority of investors are, then they should be able to withstand a downturn.
Australian shares are still the best. They were down nearly 40 per cent but they are still the strongest performer over five years.


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Boost your wealth through financial planning

Financial planning is crucial when it comes to your money. The first step in financial planning is doing a budget. This can help to ensure your wild money spending ways are kept under control by encouraging you to save for the future.
The next step in financial planning is to set up some money goals.
Ask yourself, for example, where you want to be financially in one month’s time, in a year’s time and in five years time. Stick to this, and you could see your wealth grow.

If you’re looking to grow your wealth through direct property, shares or through superannuation, you may need to enlist the services of an expert in financial planning, such as Switzer Financial Services.
A good financial planner can assist you in making the most of your money by showing you how and where your money can be invested to maximise your returns within a reasonable tolerance of risk.
They can also help you set out some long term and short term savings goals.
Some people don’t want to pay for help because they think it’s too expensive. However, getting help could potentially take your wealth to heights it would never have reached had you tried to do all this financial planning on your own.
Financial planning: keep this in mind
There is, however, an issue people need to be aware of before they take on the services of a financial planner. This relates to how financial planners are paid for their services.
At the moment, most financial planners are paid a commission for products they sell to clients. This creates a conflict of interest, which may cause you to doubt the ability of the financial planner to look after you money matters.
A financial planner may choose one product for a client over another because it pays the most commission and not because it is necessarily in the client’s best interest.
The financial planner may then receive a trail commission for the period the client is invested in that product. The financial planner continues to receive payment, even if no advice or assistance is provided to a client after the sale of the product is completed.
Many financial planners say they use a fee for service model and don’t accept commissions. Instead, they refund the commission to the client. If a financial planner says they charge a fee for service, ask them to spell out what this means.
A fee for service could mean the financial planner will take a percentage of the amount you invest. This is called a percentage based fee. So, if you invest $500,000 and the financial planner takes three per cent of that, for example, they will make $15,000. The conflict of interest arises from the fact that the percentage based fee for service model encourages financial planners to recommend you to invest more so they make more money.
In fact, if you don't have the money to invest, some financial planners may encourage you to borrow. This is what happened with Storm Financial: people put all their savings on the line and borrowed against their homes to buy managed funds recommended by Storm based on shares. As a result of the Global Financial Crisis, these people are now left with large debts and in many cases they have lost their family homes.
Tips for financial planning

• Do a budget and set goals.
• Visit a number of financial planners if required and make sure you’re comfortable with their personalities and their advice.
• Ask the financial planners to show how they are paid. Is it through a commission, a percentage fee based on the amount you invest, or a flat fee for service charged by the hour or session, etc.?
• Ask friends and family if they can recommend a good financial planner.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

What Is the Best Form of Property Ownership for Me?

In planning your estate, it is customary to consider wills and trusts (as well as intestacy) as a means of property distribution. As a matter of fact, the manner in which you hold title to your assets may supersede provisions contained in other transfer documents. Likewise, significant tax benefits can be gained (or lost) depending on the characterization of your property.
Let’s take a look at the general classifications of ownership.

Sole Ownership

Sole ownership occurs when one owns a complete interest in property. Ownership is passed by the typical transfer documents, or by the laws of intestate succession. The complete interest is included in the estate of the decedent. Because of this, the beneficiary receives a full step-up in basis. This, in essence, brings up the original purchase price to the fair market value, thereby eliminating a capital gain.

Joint Tenancy

Joint tenancy exists when two or more persons share equal, undivided interests in property. Joint tenancy is not limited to spouses. Anyone can share joint interests, but there are tax benefits when this arrangement is shared only between husband and wife (qualified joint tenancy).
A joint property interest cannot be passed through traditional documents, such as a trust or a will. Ownership of a joint interest passes by “operation of law” to the surviving joint owner(s). Further, property held in joint tenancy will not be subject to probate.
Under qualified joint tenancy, half of the property is included in the first decedent’s estate. Because of this, the surviving spouse obtains a stepped-up basis only on the first decedent’s half of the property.
If any nonspouses participate in joint ownership, the entire value of the property is includable in the decedent's estate, reduced to the extent that the estate can prove that the surviving tenant(s) contributed to the cost of the property.
Another form of joint ownership — tenancy by the entirety — is similar to joint tenancy, but it can only be created between husband and wife. Unlike joint tenancy, an interest cannot be transferred without the consent of the spouse. Tenancy by entirety is only recognized in certain states.

Tenancy in Common

Tenancy in common provides an undivided interest in property between two or more people. Unlike other forms of joint ownership, however, these interests can be owned in different percentages.
A tenant in common can utilize the traditional transfer documents, but interest cannot be passed by operation of law.

Community Property

Under community property statutes, all property earned or acquired by either spouse is owned in equal shares by each spouse. The essential principle of community property is that the earnings of either husband or wife and the revenue from their property belong not to the producer but to the community of the husband and wife.
For estate conservation purposes, there are no restrictions on how each spouse can give away his or her half of the community property. There is no law requiring one person to leave his or her half to the surviving spouse, although, of course, many do.
Currently, nine states have community property laws: Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and Wisconsin.
The amount includable in the estate of a decedent is based on his or her percentage of ownership. The beneficiary of the property interest receives a stepped-up basis on that portion of the property. It is important to remember that the beneficiary can be chosen by the decedent. This is in contrast to joint tenancy, under which the surviving joint tenant(s) automatically inherit the interest of the decedent.


Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Are you financially ready to buy a property?

If you’re saving for a property, it can be difficult to know when you have enough money to seriously go looking for your dream home. After all, a home loan is usually the biggest financial commitment you will make. Logic suggests you should save as much money as possible before you start looking for a property. So how much money do you really need to put a deposit on a property these days?
Everyone’s financial and life situation is different, along with their purchase requirements. However, there are certain considerations and general rules that will help you know when you’re financially ready to research a suitable professional lending institution to assist with your purchase.

Most lenders are generally willing to finance home purchases up to 95% of the property value, provided you have an exceptionally strong employment and savings / credit history, along with proof of a consistent savings plan. The loan amount will also strongly influence the lender’s decision. So if the property value is $380,000, you could obtain a home loan with a deposit of $19,000. However, you will also need to purchase mortgage insurance with less than 20% deposit.
If your employment and savings / credit history is not so strong, or you don’t have the ability to service the loan repayments, the lending institution would generally only lend up to 80% of the property value.
Mortgage Insurance
Generally, mortgage insurance is applicable for home loans above 80% of property value. The mortgage insurance company will compensate the lending institution for any losses incurred if you fail to make your home loan repayments, and if they can’t recoup from the sale of the property.
Say your home value is $400,000 and you borrowed $380,000. If you have only repaid $40,000 and can no longer make further repayments due to financial woes, the lending institution is $340,000 in debit. When they take possession of your home and put it on the market, they may only be able to sell for $330,000. Therefore, they have incurred a $10,000 loss on your home loan. This amount does not even include the interest they would have received on your loan.
Mortgage insurance can be paid upfront or included as part of your home loan. If including in your home loan, it’s important to remember that borrowing a higher amount not only means repaying that higher amount, but also repaying a higher amount of interest.
If your preference is not to pay additional money for mortgage insurance, you could have a guarantor for your home loan. A guarantor allows the equity in their own property to be used as additional security for your home loan. Your property will still be the primary security though. The most common example of this is a parent using their property as security for their child’s home loan. Be mindful though, if you fail to make your repayments, your parents could be forced to sell their property to repay your loan.
Home Loan Serviceability
Another important factor to consider when determining how much deposit you will need is your home loan repayment serviceability. This is your ability to comfortably make your repayments each month for the duration of your home loan, based upon your income, expenses and other commitments. This generates a figure which is known as your ‘debt service ratio’. Having a basic knowledge of how your serviceability is calculated can help you to understand if you are ready to purchase a property. You may be able to comfortably make your repayments now, however what happens if there is an interest rate rise, or your expenses increase dramatically.

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE

Buying an investment property

Investing in property

When starting to invest in property it’s important to be clear on your property investment strategy. Are you going for high rental returns for the short term or are you going for long term capital growth?
If you’re thinking about investing in property for the first time, it’s important to seek professional advice. One of our financial planners will be able to help. Meet with a financial planner (Opens in new window).

Why property?

Investing in property has several benefits, including the potential to:

• Generate capital growth – increase in the value of your property over time  
• Generate rental income and yield – annual rental income less any costs divided by the purchase price of the property
• Gain potential tax advantages associated with negative gearing – with negative gearing you can deduct the costs of owning your investment property from your overall income, reducing your tax bill.

What should I think about?

If you’ve decided that investing in property is the way to go, it’s important to recognise that the way you might choose an investment property is a little different to how you would choose your own home.
These are some points to consider:

• Buy a property that fits your strategy, e.g. are you wanting to negatively gear? Refer to our article on Strategies for property investors for more information.
• Understand all the expenses including, stamp duty, strata levies, council and water rates, real estate commission.
• Consider getting Landlord Building and Contents Insurance ² to cover you if the unexpected happens.
• Plan - give your tenants a suitable length of lease and make sure you can cover repayments if the property is unrented for a period of time.
• Choose a loan that suits you and consider an interest only option as it will lower repayments and increase your cash flow.
• Keep up to date on the latest property trends.

Things you should know

• The information contained within this page is general in nature. It serves as a guide only and does not take into account your personal financial needs. Before you act on this information you should seek independent legal and financial advice. Westpac does not warrant the accuracy or appropriateness of this information.
• 1. Westpac Financial Planners are representatives of Westpac Banking Corporation, AFSL No 233714.
• 2. The information provided in this page is general in nature and serves as a guide only. It does not take into account your personal financial circumstances and needs. Before deciding to acquire a financial product please read the relevant Product Disclosure Statement which is available from our branches or from the Issuer of:
- Income Protection Insurance is Westpac Life Insurance Services Limited (ABN 31 003 149 157 AFSL No. 233728)
- Mortgage Secure Insurance is Westpac Life Insurance Services Limited ABN 31 003 149 157 (Westpac Life) and distributed by Westpac Banking Corporation ABN 33 007 457 141
- Landlord Insurance is Westpac General Insurance Limited ABN 99 003 719 319 (WGIL) and distributed by Westpac Banking Corporation ABN 33 007 457 141 (the Bank)
- Life Insurance is Westpac Life Insurance Services Limited (ABN 31 003 149 157 AFSL No. 233728).

Elite Wealth Creators have been involved in the property and finance industry for over 20 years.  Our Investment Property Strategists deliver investment grade properties to the investment market and mediate between the developer and the investor. We also assist first home buyers in purchasing their first home in QLD through our house and land packages – this includes receiving $20,000 cash back towards their mortgage by buying one of our full turn-key packages.
Our service will take you through the complete process of buying positive cash flow property, including:
• educating you on positive cash flow and the ability to pay your mortgage off years in advance
• saving you thousands of dollars in interest
• supporting you in the decision on which property to buy
• assisting in the organizing of your finances, if required
• preparing you for settlement of contracts
• liaising with other professional advisers on your behalf if required.
Our Strategists specialise in delivering quality positive cash flow property and also helping investors pay off their mortgage years in advance

http://www.elitewealthcreators.com/
sales@elitewealthcreators.com
1800 GO ELITE