JAN/FEB/MAR 2018
INVESTOR www.propertyclub.com.au
PROPERTY
magazine
$6.95 inc GST.
Member Profile
Property Outlook:
PROPERTY AND THE BITCOIN BUBBLE
ROSALEA DENKER
PROTECT Joseph Garnier
YOUR PERSONAL INFORMATION
THE NEW GROUP GENERAL MANAGER
LET'S CRUISE!
SET SAIL FOR THE 2018 WEALTH & PROPERTY CONFERENCE PROPERTY CLUB – AUSTRALIA’S NO. 1 WEALTH CREATOR SINCE 1994
ProPerty C lu b 2 0 1 8 Wealth & Property Conference Sailing away on tueSday 6th MarCh, 2018 for 5 dayS, 4 nightS on P&o PaCifiC dawn
D L O S T U O
DON’T MISS OUT AGAIN ...
REGISTER Y OUR INTEREST IN THE 2019 CONFEREN CE NOw!
Imagine cruising in style aboard the Pacific Dawn while socialising with like-minded Club investors and PMC members!
R EGI ST E R YO UR I NT E RE ST F OR 2019 : www. p ro p e rtycl ub.co m .a u/sa i l away
JAN/FEB/MAR 2018
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PUBLISHER
ADVERTISING
Property Club 8/107 Miles Platting Road Eight Mile Plains QLD 4113 www.propertyclub.com.au
E: magazine@propertyclub.com.au P: 07 3456 4200
PC FOUNDERS
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BRANCH SPOTLIGHT
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MEMBER PROFILE Rosalea Denker
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PMC NEWS
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LEGAL DEPARTMENT
13
INSURANCE MATTERS
14
PROPERTY OUTLOOK
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CLUB LEASING
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BEST PROPERTY 4U
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TAX TIME
20
MARKET UPDATE
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ENQUIRIES E: enquiries@propertyclub.com.au P: 07 3456 4200
COPYRIGHT AND DISCLAIMER: Established 1994 Property Education Club Pty Ltd ABN 25 169 896 244 © DISCLAIMER: This magazine is not financial investment advice but property investment advice and our comments are of a general nature only. Case studies are genuine. The information contained in editorials is reproduced in good faith. No responsibility is accepted by Property Club for the accuracy of information contained in advertisements. Unless specifically stated, products and services advertised or otherwise appearing in this magazine are not endorsed by Property Club. If you would like to be removed from or added to our mailing list please contact your Branch Manager or Property Mentor, whose name you will find on the attached cover letter. Please note that the following are registered trade marks of Property Education Club Pty Ltd and Property Club Assets Pty Ltd: Property Club®, Property Loans 4U®, For advertising or media enquiries please contact Property Club on 07 3456 4200, 8/107 Miles Platting Road, Eight Mile Plains Qld 4113.
JAN/FEB/MAR 2018
PROPERTY INVESTOR
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PC FOUNDERS
KEVIN YOUNG PROPERTY CLUB FOUNDER/DIRECTOR
NEW YEAR, NEW GOALS! WHAT ARE YOUR RESOLUTIONS FOR 2018? It’s a tradition that most people make resolutions at the beginning of a new year. Often these involve going to the gym or starting a diet, but here at Property Club, we're thinking more about your long-term financial health.
H
ave you thought about where you want to be in, say, five or 10 years in regards to your wealth creation? The average person doesn't usually think this far ahead. Even fewer people think about long-term strategies for their financial situation, with many erring towards the 'deer caught in headlights' approach. Then there are those who have made the decision to invest in property, but stall at one or two investments. They feel as though they've done enough, however, when they retire, they don’t have enough cash flow with these properties and are forced to sell up or face living on the pension. To adequately live off your property portfolio, you need to purchase at least eight properties located in the middle circle of capital cities, with infrastructure at the tenants' fingertips. The good news is, our Property Mentors can run your figures through our unique software programmes to give you a projected outcome of your financial situation. Our programs include FIDO, CAP and Retirement Forms to calculate how much you require with your properties in retirement. Do you have a bucket list of the things you wish to do during your retirement? Many people like to travel, while others have plans to do renovations on current their home. Some dream of purchasing a boat while others just want to play golf and spend time with the grandkids. Of course, top of everyone's bucket lists should be attending the Club's 2018 Wealth & Property Conference, which is being held from March 6-10 aboard the Pacific Dawn cruise ship. Your four-night, five-day cruise (no cooking for you!) will be jammed-packed with information to commence or further your property investment journey. What a great way to kickstart your new year's resolutions! Some of the benefits of attending this fantastic event include: • Dedicated learning environment assisting you in your property investing journey • Mixing with like-minded people 4
• Being able to chat with a Finance Broker using your own figures • Learning about property cycles • Discovering which kinds of properties are the most successful • Having a team of people working with you • Enjoying the entertainment, amenities, meals and spectacular views that go with being on this amazing cruise ship. If you have missed the 2018 Conference opportunity then why not register your interest to attend our 2019 Conference at www.propertyclub.com.au/sailaway/ The next resolution to put on your list would
PROPERTY INVESTOR JAN/FEB/MAR 2018
Kevin’s Whereabouts
be to join our mailing list to receive my weekly blog ”Property Insights”. Contact your Property Mentor or email enquiries@propertyclub.com.au to have this sent to you on a regular basis. So, when you are planning your financial goals, be open-minded and seek out people such as your Property Mentors who have built a property portfolio or contact enquiries@ propertyclub.com.au. They can guide and assist you to commence your journey towards prosperity. Happy investing in 2018!
ITINERARY 2018
MEET | SEE | BE INSPIRED | CONNECT Meet Kevin Young at an upcoming event. See the latest market trends. Be inspired by our property mentors. Connect with likeminded investors. MAR Events 6 TUE - 10 SAT Wealth & Property Conference Cruise 28 WED Wine and Cheese Night APR Events 27 FRI - 29 SUN SA PMC Weekend Find out when Kevin is coming to an event near you. Contact your Property Mentor directly or email events@propertyclub.com.au
PC FOUNDERS
FEDERAL BUDGET CHANGES NOW LEGISLATED Federal Budget changes have now been legislated and effect all property investments after 9 May 2017.
Hlegislation? If you are planning on purchasing ave you heard about the new depreciation
existing property for investment, make sure you are across all of these changes, as they have a big impact on your depreciation claims.
Understanding changes to depreciation Previously when you bought an investment property, whether that was an apartment, existing home or a new build home you were able to claim depreciation on “Plant and Equipment”, more commonly known as fixtures and fittings at the rate of 20-30% (depending on the individual item), and also claim a capital allowance deduction on the building component of the property at 2.5%. Plant and Equipment (P&E) are the assets on the property that are considered by the ATO to be easily removed from the property. These include things such as air conditioning units, curtains and blinds, carpets, appliances or security systems. However, not all property investments will now be able to claim depreciation at the same rates on P&E, reducing the tax effectiveness of some property investments dramatically. Luckily for you the rate at which you could previously claim P&E will not change if you are building a new home or purchasing a house and land package as your next investment. Under the new depreciation rules you can still claim at the old rates provided you are the “original purchaser” of the P&E. Depending on the value of the property or house and land package, the difference in the depreciable amount can be tens of thousands each year, so property investors need to evaluate this very carefully moving forward to maximise your after tax returns. What this means for you For anyone wishing to invest in established homes this is not a small change, so consider your options very carefully as not all property types are the same now. If you are planning on purchasing an established home as an investment, your typical depreciation deductions have just been reduced from around 25% on the P&E value to 2.5%, which is often a reduction of $10,000 to $20,000 depreciable deductions. If you are yet to invest or thinking about adding to your property portfolio, make
IF YOU ARE PURCHASING AN ESTABLISHED HOME AFTER 9 MAY 2017, YOU WILL NO LONGER BE ABLE TO CLAIM DEPRECIATION AT THE RATE OF 20-30%, BUT RATHER ONLY AT THE FLAT 2.5% ON BOTH P&E AND THE BUILDING COMPONENT. sure you consider an off-the-plan house and land package (new build) as you will still be eligible for the full depreciation claims as previously allowed by the ATO. Savvy Property Club members will ensure they protect their after tax position with this type of property investment, while still enjoying superior rental yields and strong capital growth enjoyed by new build investments. There is no secret that if you are investing,
the tax benefits are a huge incentive to building your wealth through property in the first place. Although property prices continue to grow and capital growth is very likely, having extra cash now from tax deductions is something that will put a lot of investors off from purchasing established homes in the years ahead Speak to your Property Mentor if you have further questions on depreciation.
MEET JOSEPH GARNIER Welcome to our new Group General Manager Mr Joseph Garnier.
Jmore than 20 years’ experience oseph Comes to the club with
in management in real estate and property investments in Australia and overseas.
He is a senior executive with a history of success – both personal and professional having held senior management positions in three top real estate companies in Australia and internationally His industry instincts and motivation have helped hundreds of people achieve their property investment dreams. Joseph intends to continue the club culture in working closely with Australia's best property professionals and developers to achieve strong returns for our members. Please join me in welcoming Joseph to his new role!
JAN/FEB/MAR 2018
PROPERTY INVESTOR
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BRANCH SPOTLIGHT
TROY GUNASEKERA PROPERTY INVESTOR BRANCH MANAGER
SPOTLIGHT ON: GUNASEKERA BRANCH Property Investor gets to know Branch Managers Troy and Sharon Gunasekera and their team. Tell us a bit about yourselves: We live in beautiful Perth, just walking distance from the iconic Scarborough Beach. We have three children aged 14, 12 and nine. Originally we're from the east coast of Melbourne but in 2016 we made the trek across the Nullabor to start anew and assist our WA team! How long have you been part of Property Club and what made you decide to become Branch Managers? We have been a part of the Property Club since 2001 when we purchased our first property with the help of our Property Mentor. After settling on our first property, we were so impressed with the amount of support and education we received that we decided we would like to take on the role of being Property Mentors and help show other people what we had learnt. It wasn’t too much later that we were selected by the peer network as Property Mentors of the Year in 2004. Shortly after this we took on the role of Branch Managers. What did you do professionally before becoming Branch Managers? Sharon was an engineer and worked as a network designer and Troy was a business Development manager working in IT. We had already accumulated quite a few properties by the time we had our first child, so Sharon was able to leave work. Troy left his job a few years later when we welcomed our third child. Tell us about your Branch – what do you consider to be your business ethos and how do you stay motivated, get the best results, etc? Our Branch is quite diverse and our role as Branch Managers has had to be somewhat adaptable. While being Branch Managers, Troy has also carried the role of the Property Club National Manager and media contact. Further to this, originally being from Melbourne, we have had to leave one Branch behind and start afresh with a new Branch in Perth. We love working with people and particularly enjoy meeting people who want to take charge of their future, even if they don’t know exactly how they are going to do that. We see each opportunity as a chance to not only teach and mentor others but also 6
to grow and continually educate ourselves. We motivate each other to be the best we can be and, importantly, give others the same support, assistance and guidance that we got (and still get) along the way! What have been some of the biggest highlights so far of owning a Branch? The network of friends we have made, from experienced investors in the Property Millionaires Club (PMC), to the many head office staff, Researchers, Property Mentors, Branch Managers, members and, of course, Kevin and Kathy Young. We have a lifetime of great memories and friendships! It has been really humbling to win many acknowledgement awards during our time in the Club (18 years now!), including Property Mentor of the Year, Branch Manager of the Year, High Achiever and the Col Sinclair Award for Excellence, for helping our members and
PROPERTY INVESTOR JAN/FEB/MAR 2018
the greater Club! What’s the most rewarding thing for you personally about helping Club members? The sincere thanks we receive from Club members! It is so genuinely rewarding to sit down with someone – a couple, a family, a single person – who doesn't appear to have a safe and secure financial future set up, to then mentor, inspire and guide them through the steps to give them hope and security. It is very powerful stuff! The genuine thanks and appreciation that we get from members when they settle on a property (and we half-jokingly say "that wasn't too hard now was it!" as we celebrate with them) makes the effort worthwhile. Tell us about your events and social activities – what do you do for fun in between the hard work?