Property Wise Magazine August/September 2014

sunshine coast

issue 4 - aug/sept 2014

URBAN ATTITUDE:

FIRST HOME BUYERS JUMP INTO RENOVATION

H O W T O : NAV I G AT E C O U N C I L’ S W E B S I T E | S M S F : A R E T H E Y R I G H T F O R Y O U ?

TECH TOOLS: JOINT VENTURE RESEARCH | LANDSCAPING: SIMPLE FEATURES TO ADD VALUE H O W T O B E A G R E AT L A N D L O R D : KEEPING YOUR TENANTS HAPPY

Free Download: Download: 77 Suburb Suburb Affordability Affordability and and Growth Growth Free Suburb Reports – Valued at $693 Suburb Reports – Valued at $693 Real Estate Estate Investar's Investar's suburb suburb reports reports can can help help you you make make better better Real property investment investment decisions. decisions. property This pack pack of of 77 Suburb Suburb Affordability Affordability and and Growth Growth Suburb Suburb Reports Reports This will give you valuable suburb data at a nationwide and state level. will give you valuable suburb data at a nationwide and state level.

You'll gain gain an an insight insight into into suburbs suburbs experiencing experiencing strong strong rates rates of of You'll growth and also those becoming more affordable – helping you growth and also those becoming more affordable – helping you refine your your property property search search whether whether you you are are an an investor investor or or home home refine buyer. buyer.

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These reports reports will will help help you you in in many many ways, ways, including: including: These Identifying suburbs suburbs experiencing experiencing the the fastest fastest rates rates of of median median growth. growth.

Identifying Targeting areas areas where where owning owning is is more more affordable affordable than than renting. renting.

Targeting Finding suburbs suburbs where where you you can can purchase purchase property property for for as as little little as as $50,000. $50,000.

Finding Avoiding the suburbs experiencing declining rates of median price growth Avoiding the suburbs experiencing declining rates of median price growth which could could lead lead to to financial financial disaster. disaster. which

Free Download: 7 Suburb Download the the reports reports by by following this link: Affordability and Growth Download following this link: Suburb Reports – Valued at $693 www.realestateinvestar.com.au/PWMafford www.realestateinvestar.com.au/PWMafford 2 - PWM AUG/SEPT 2014

Real Estate Investar's suburb reports can help you make better property investment decisions.

Fr

10

6

36

19

6

Urban Attitude

10

SMSF Property Investing

12

Why build new?

19

How to:

22

Tech Tools

27

Success Coach

36

Trendwise

39

Stylewise

40

Congratulations Pomo

42

Landscaping

40

39

James Farr & Leah Bailey’s renovation journey

Is it right for you?

Pro’s & con’s of renovating v’s building

Navigate councils My Maps & find what you need

Research tips to find joint venture partners

Do you have goals? What about a budget?

Not a red brick in sight

Coveting Copper. Warm metals are the new cool!

On winning Qld Sustainable Building Design award!

Simple features to add value to your investment property

42 27 PWM AUG/SEPT 2014 - 3

WARRICK BIDWELl

Karen is the face behind Property Zest and runs a buyers agency. She’s been an investor, a developer & a renovator, experienced the tree change, the sea change & the interstate relocation. Karen spends much of her time scouring Brisbane & regional Qld for great property deals & helps investors get started with their property investment journey!

Luke Quinlivan

KAREN GIULIETTI

ADRIAN RAMSAY

Karen started her career in Sydney working as a fashion designer for various major brands. After travelling the world and meeting her Italian husband, she moved to the Sunshine Coast to start a family. She studied interior styling, renovated properties and eventually built her own home which featured in Home Beautiful magazine. Karen is a passionate blogger of eco-conscious interiors. She offers an e-consultancy service, providing a cost effective solution to home styling.

Originally from New Zealand, Adrian has an extensive design career working around the globe for many major brands. Architecture & Interiors has always been his passion, which lead him to start his own practice on the Sunshine Coast 10 yea rs ago. A passion for sustainable design brings his buildings alive and an ability to work closely with his clients desires has made his practice a success.

ADAM VAN DER HELM Adam has been in ďŹ nance for 13 years, previously a Bank of Qld Owner Manger in Caloundra, selling this business in 2010. He moved to mortgage brokerage to gain access to a broader range of lenders, offering customers a better chance of approval at a more competitive rate whilst still maintaining a strong customer focus. Adam has a broad range of experience in all styles of lending and endeavors to make the process as easy as possible.

PHOTOGRAPHY SPECIAL FEATURES NIGEL ARNISON

4 - PWM AUG/SEPT 2014

Our cover story this edition features young first home buyer couple, James & Leah starting out on their property journey. Having settled back on the Sunshine Coast in 2012 after wandering the world, they have not only started a business but purchased their first house and completed a major renovation to produce their dream home with absolutely beautiful results.

Follow the step by step guide on page 19 to navigate the Sunshine Coast’s councils “My Maps’. This is an amazing resource for finding property & boundary information, planning zones, flood maps etc. It’s also a great tool for finding splitter blocks and potential subdivisions.

Warrick tackles goals & budgeting on page 27. Budgets are essential for tracking your performance against your targets for success. By proactively managing your personal finances you create a personal cash flow report, this will allow you to increase your net worth by understanding where your money goes and changing your spending habits, in turn increasing your bottom line. Warrick’s easy five step process will get you started now!

There is something really romantic about an old Queenslander

& the journey to bring one back to pristine condition. A beautiful old building with historic features, high ceilings & intricate fretwork panels. Then there is the reality, with eyes wide open...nothing is square, wiring an issue, white ants eating away stumps & internal floors, but we all love a challenge, see the beginning of the journey is on page 32.

On another note, I (Lou) stumbled into an op-shop a couple of weekends ago & met some beautiful men & women volunteering their time to help raise awareness and funds for woman with cancer and their families. This is not an ordinary op-shop, however a mix of old & new products ranging from jewellery to furniture with some beautiful styling & design thrown in. As I ventured further in I was amazed to also find a retro cafe, with coffee and aromatic teas. I was very touched by the amazing work that is being done here. Please if you have a spare few minutes drop in for a drink and see for yourself, you will find their details on page 28.

We want this magazine to be about you! Let us know your stories, send us your photos, we love your feedback! Let us know what you would like to see & learn about in upcoming issues.

Till then

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PWM AUG/SEPT 2014 - 5

Urban Attitude Young business couple James Farr & Leah Bailey took their parents advice to do something “responsible” after travelling the world, so they purchased their first house. images: Indi Photography 6 - PWM AUG/SEPT 2014

J

ames is from the UK where he met Sunshine Coast girl Leah in 2006, constantly on the move experiencing different places and cultures, they have never stopped in one place longer than a year, until now.

Returning to the coast they set up their business Indi Photography, purchased a house and set to the task of renovating.

They say the hardest part of a long journey is the first step; can you explain what has brought you to this first step in your property adventure?

Funnily enough, our parents were on our back to do something “responsible” and then the accountant backed them up thought it a good idea to put some finances into an asset and not spend all our money travelling the world as we had done for the previous six years. They won (at least for now).

You have renovated to a strong theme what was it that you used for design inspiration?

Both of us have quite creative minds. James studied Graphic Design for four years at Uni in the UK and then followed up with Photography and Leah was always the arty one of the family (definitely not the academic). Consequently we’re not scared to do things that are a little different. If we see something and

like it we just go, why not? And, we’re not really into all the “new” in the world today. We love character and quirky decor and furnishings and of course this reflected in our choice of colours, textures and finishings in our house.

What was your favourite part of the renovation process, design, demolition, construction or decoration?

Hard to say really. The design was fun with Adrian. I have known Adrian Ramsay for over ten years and knew his “design head” would run with what we wanted.

He took our ideas and helped us turn them into a bigger and better reality. The demolition was awesome - finally getting rid of the 80’s feel, especially the diagonal terracotta tiles, they did our heads in!!!

Construction was rewarding - at last we could see our dreams coming to fruition.

Mum would take videos everyday when we were away with work to keep us up to date on the progress, she’s awesome too.

Decoration, well this is on-going and we can’t stop. It’s just so much fun finding new stuff and spending!!

How does this renovation fit with your financial goals in property investment?

Ooops, are we supposed to have property investment goals? We really just wanted a cool place to live, in the coolest location in the world and when we sell to go onto bigger and better and make a squilion. Hope it works but you never really know until the time comes.

PWM AUG/SEPT 2014 - 7

Was your strategy a success?

The finished product is amazing. We got everything we wanted, we love it and it wasn’t too painful. So was our “home strategy” a success, absolutely!

Any tips for staying on budget? Or did you manage to stay within your own?

Budget? What budget? We blew out a little but most importantly, research and listen to those that know and have done it before.

We took advantage of sales even if things needed to go into the garage for storage for a couple of months. Adrian and our parents put us onto tradies they’d used before for quotes and this ultimately saved us thousands.

Was there any conflict and how did you handle the stress and strain of a renovation?

We’re fortunate enough to work “on the road” each day so weren’t under the stress of people coming in and out and of course the noise factor. Yep, we came home to a mess and cooked on the BBQ with no outside lights for a couple of months but we made it!

In terms of project management who was the one in charge?

We all played our parts, James is a pretty good researcher, I’m the organiser and make things happen, however really Adrian was the go to man for every decision we made and kept the tradies on the straight and narrow. He put so much energy into the renovaton we couldn’t recommend him enough.

How did you juggle: Time?

Make a list and tick off one at a time - make it happen!

Cost? Know what you’re up for and get the bargains where you can without compromising quality. Pay as you go so you know exactly how much is left!

Quality? Some things were really important and couldn’t be compromised on - like the cooker and the big concrete bench tops. We both love to cook and our entertaining is always around food and the kitchen so it had to work for us.

8 - PWM AUG/SEPT 2014

What did you learn along the way?

Just do it and run with your gut feeling. Usually it’s right and if you procrastinate too much the situation ends up over complicated.

What was your greatest challenge in the project?

The finish under the island bench. We ended up with what we thought when the renovation was just in our heads, but went through a million ideas to get back to where we started.

Would you do another renovation?

Absolutely, we’d always want our homes to have our own personal touch.

Do you have any tips for people starting out in property?

Don’t fall in love with a place then realise it doesn’t meet your needs. Run with you head and not your heart - at least while you’re looking, it’s just bricks and mortar. Make a checklist before going out to look. There’s plenty of cool places out there that we got excited about and could have bought but when we took a breath they would have been completely wrong for us. For us it was about privacy, not wanting to live in suburbia, trees and wildlife, space for an office & easy access to the highway.

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PWM AUG/SEPT 2014 - 9

SMSF Property Investing. Is it right for you?

There is a lot of information about owning property with your superannuation available on the internet.

There is also a lot of misinformation and misunderstanding about what is involved and how a Self Managed Super Fund (SMSF) can help you spend your retirement the way you want.

Having an SMSF comes down to your individual financial circumstances, retirement goals, and timeframes.

There is a strong attraction to making your own financial decisions with your Superannuation. In the five years to 30 June 2013, SMSFs were the fastest growing sector of the Australian super industry, with the number of SMSFs rising to over 509,000. But what is the attraction and could it be a viable option for you?

To keep it simple, let’s look at WHY people own property in Super, the Pros and Cons of it, and then HOW to set up a SMSF to buy Property.

WHY own property in Super?

Within our personal portfolios in Australia, property is seen as a stable asset class underpinning our attitude to wealth creation. Prior to 2007, property ownership within superannuation was much more restricted. As borrowings are now more commonly utilised in combination with super balances to purchase and maintain a property, we are now realising the benefits of investing in property within superannuation and it is increasing in popularity.

Pros • Direct control and understanding of where your superannuation is invested • Pooling super balances of up to four members means you are more easily able to reach the ATO suggested minimum $200,000 combined balance for an SMSF. 10 - PWM AUG/SEPT 2014

words by Drew Grosskreutz

Depending on your investment choices, this can be less • Tax benefits on rental income and capital gains, which increases substantially once members reach pension age • Long term growth potential and built-in income via tenants • Business owners can operate from their SMSF owned commercial property • Interest rates are low, and look to be staying low for the foreseeable future Cons • All SMSF’s funds and its investments must be kept separate from your own assets, meaning you, your family or friends can’t live in the property • You as trustee are fully responsible for ensuring you have a compliant fund.

Penalties for not adhering to the strict super laws are high • Setting up an SMSF and maintaining it for compliance requires a willingness to invest

significant time and finances • Generally not suitable for low income earners Operating an SMSF requires a hands on approach. Many of the above restrictions can be lessened by outsourcing some aspects, such as the establishment, administration and compliance to save you time and give you access to the experts.

In selecting a financial planning, accounting and law firm, be sure to select one that specialises in SMSF so you get the right advice and legal structures from the start, otherwise it may end up costing you more down the track.

How to set up your SMSF to buy property Think of it as your recipe to success.

Step 1 – What kind of investor are you?

If you are a ‘DIY’ investor, there are many online services which will help you achieve a successful outcome. Depending on which bank you use, the only advice you may

need will be from a financial planner to satisfy their compliance.

If you are an advice seeker - get to know who is involved in a successful outcome. You will need a financial planner, accountant, lawyer and mortgage broker. Some companies can manage this from end to end, saving you a lot of time and hassle.

Step 2 - Understand your purchasing power Before you have spent a cent, you need to ensure you are eligible for a self-managed super fund. A financial planner or accountant will outline your options and give you advice, including how much you can borrow and which banks best suit your financial needs.

Step 3 – Establish the SMSF Once you get the green light from your accountant, it’s time to establish your SMSF and related documents. You will need two companies, a trust deed and a bare trust. These entities all play a part in the process and when combined allow your super fund to approach the bank for finance. If completed incorrectly or in the wrong order, the ATO may fine you and the bank will not provide finance. At this stage you are also starting to get rollovers in place so you have cleared funds. We highly recommend to have cash at bank in the SMSF before moving to a formal contract.

Step 4 – Negotiate You can purchase all types of residential and commercial property including off the plan, new, near new and established. We recommend a 30 day finance clause and 60 day settlement. Your mortgage broker should be fully aware by now you are in the market to buy.

Step 5 – Pay the deposit Once you’ve chosen a property, it’s time to engage a conveyancing lawyer to look over the contract and prepare to pay your deposit.

Hot tip - the contract is in the name of the Bare Trust trustee company.

Step 6 – Settlement The settlement stage is generally the most stressful, especially if you do not employ an SMSF property specialist. To avoid a stressful settlement, hire the conveyancing services of specialist lawyers who understand the super space.

Part 7 – Compliance Pop the champagne, you are settled. But there’s still work to do.

Rent has to be monitored and paid to the correct account, rates paid, annual accounting arranged and an audit performed.

Where should you go to get more information?

Researching your options thoroughly and seeking the advice of independent experts should all be considered in deciding whether having an SMSF is your best option.

To gain a greater understanding of your duties, responsibilities and obligations of being an SMSF trustee, visit: • The Australian Taxation Office (ATO) https://www.ato.gov.au/Super/Self-managed-super-funds// • The Australian Securities and Investment Commission (ASIC) www.asic.gov.au

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How to be a great landlord

words by Tamara Wrigley

to repair and maintain anything that goes wrong.

Being Reasonable A good landlord is fair and reasonable and knows the difference between normal wear and tear and genuine damage to the property. Landlords need to remember that there are actual people living in their properties that make the property their home and must allow for reasonable wear and tear to the property. They’ll also be reasonable about any requests from tenants to make living in the property more pleasant (so long as they don’t affect its value) – small modifications like hanging pictures for instance to again make the rental experience more like their own home.

Distance More often than not we will get tenants that contact our agency stating that the Landlord has shown up at the property unannounced. There are regulations and requirements under the ACT which prevents Landlords “rocking up” at their investment property. A good landlord keeps a respectful distance.. The last thing any renter wants is to have their landlord looking over their shoulder every minute of the day, scrutinising them over every little thing. A landlord who doesn’t insist on dropping in every few months and lets the real estate agent do their job is a good one.

Trust And lastly, TRUST. Trust your real estate agent, they know the Residential Tenancies and Rooming Act and if they don’t then find a new agent. You as a landlord have entrusted a real estate agent to look after your biggest asset because they are the professionals in this field. Property Managers are trained specifically in the field of Property Management and they are there to minimise your loss and maximise your income.

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Being a great landlord means more than just being a nice person or even being fair. Whether you are just starting out or have been a landlord for a period of time, a landlord means taking care of your responsibilities quickly and efficiently. When you are a good landlord, this usually results in having happy tenants. Simply setting the stage for a good experience at the very beginning assures them that they have made the right decision moving into your rental. Landlords should always look at rental properties as a business transaction and not get emotionally attached to their investment properties.

Good landlords are worth their weight in gold. They’re the unsung heroes of the rental market. They are lending tenants their properties which are worth anything from $300,000 to $900,00 and then some and providing accommodation to those who can’t afford to join the home owners market.

We all know the bad landlord stereotype, and there are a few doozies out there. But there are plenty of great landlords who take the role of being a landlord seriously.

The good landlord checklist: Communication A good landlord is a good communicator, who will typically use a real estate or leasing agent as a middle-man. They’ll be fast to answer questions, quick to act when maintenance is required, and easy to deal with.

Maintenance This is a massive issue for tenants and sometimes property managers. Property manager seem to be the ones to blame when maintenance is not rectified in a timely manner, what tenants fail to realise is, that landlords, in most cases, authorise all maintenance on their properties. A good landlord not only makes sure their property is clean, tidy and well presented, but is quick

issue 4 -

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DE URBAN ATTITU

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Ever wonder how some people seem to know a ridiculous amount of information about a property or even just about the properties in a particular area? Chances are they know & use the Sunshine Coast Council website to use a tool called PD Online & view Sunshine Coast mapping.

Sunshine Coast Mapping allows users to view & access basic property information such as: • Property & boundary information • Planning information for e.g what the property is zones • Flood maps The PD Online tool allows users to see what development application have been applied for (since 2007) and read the associated documents.

Please note since the de-amalgamation of the councils all development applications relating to the Noosa region are not available on PD Online site. The Noosa Council has an equivalent tool called Application tracking. This can be accessed by going to www.noosa.qld.gov.au/planning-online However at this present time Noosa Council does not have a mapping tool available online.

To access go to the council website www.sunshinecoast.qld.gov. au. Hover your mouse over Planning & Building & from the drop down menu that appears choose Sunshine Coast mapping. From the page that opens click on the link to Sunshine Coast My Maps (http://maps.sunshinecoast.qld.gov.au/mymaps/) We will cover two features of this fabulous mapping tool.

1. Specific Property Information. 2. General Zoning information Specific Property Information Click on My Place & then enter the address you are investigating. We are going to use 69 Primary School Ct Maroochydore as our example. Once you have typed the address in you get the following options; flood hazard area, property information, underground services, waste removal & whats near me. We will click on property information

This shows the lot size, plan, where the current building sits & any easements or covenants over the property.

Now lets have a look at how this property is affected by flooding; at the top right of the screen click the second icon along (layer explorer). While you’re here lets click the third icon along which is the Layer Legend so we can understand what all the colours are about! The legend will open at the bottom right of the page.

Once you click on layer explorer a seperate box will appear to the bottom right – click on add more information; scroll down to flood hazard area & put a tick in the box & click “add”. This now updates the map as follows & shows this property is clearly in a Flood Hazard area which then may require stricter council regulations around flooding & the design of any building.

Another great couple of layers you can add are applications & contour. If we choose the application layer & click add you can clearly see that the property has or has in the past had a development application (shows up as orange stripy lines).

Contours don’t really apply to this property but it’s a great tool to use if you have want to see how steep the land is without driving out there & looking!

PWM AUG/SEPT 2014 - 19

If we want more information about what the development application is we can click the blue circle with pd that appears in the search box or use the PD Online tool (more on this later).

General Zoning Information This layer is really useful for things like: • you are looking to buy a house that can be subdivided • want to know if you can build a duplex • want to build units • want to build commercial property Go to http://maps.sunshinecoast.qld.gov.au/mymaps/ & click on My Region Icon. We then want to choose Planning Development & then planning scheme. We are going to look at Warana in this example In the search box on the right in “Find a place” type in Warana & click search. At this point you want to make sure you have the Layer Legend visible as everything gets really colourful! Scroll down the Legend until you get to the Zones section.

& Building & from the drop down menu that appears choose PD Online. From the page that opens click on the link to PD Online Sunshine Coast. Alternatively click the blue circle with PD inside from My maps above.

Following our property from above we can go into PD & see the following:

We can click on all the applications that have been made & read all submissions & responses to/from council. A couple of tips: • Make sure you are reading the documents from oldest to newest • While you may not understand all the terminology & documents make a list of questions you have & ask your town planner, seller or call the council & discuss.

• Take special notice of any approval dates & the corresponding expiry date. If a property has a DA (development approval) that runs out in a month but you want to settle in 2 months the DA will lapse & you will have to start the process again unless action is taken to extend the current DA. While we have concentrated on the Sunshine Coast council My Maps many other councils around Australia have a similar tool.

Once you have a basic understanding of how to use these it really helps in your property search.

Want to know more?

We want to build a duplex so we are looking for Medium Density housing – zoom in on the map to find properties that much the colour code. You can now clearly see which properties you can focus on. (Editors Note: At this point we usually go onto realestate.com (or equivalent) sites & use the Map view – we can then compare the maps to find properties which meet the zoning requirements & are for sale).

To gain a better understanding of the zoning rules on the council website under Planning & Building choose Planning Scheme 2014.

Click on “View the Sunshine Coast Planning Scheme 2014 Text” On the new page that opens choose Part 6 Zones.

There are so many variations & layers you can explore on My Maps but these are a great start.

PD Online PD Online is accessed via the Sunshine Coast council website at www.sunshinecoast.qld.gov.au Hover your mouse over Planning 20 - PWM AUG/SEPT 2014

Investor Networking Night with guest speaker Brooke Wilden explaining navigation of the Council website.

Wednesday 13th August, 6pm.

Grow Accounting Maroochydore phone 5448 9600 to book your seats.

image courtesy www.sunshinecoast.qld.gov.au

Ministerial approval a major milestone for Maroochydore City Centre P.D.A. The Maroochydore City Centre Priority Development Area (PDA) has reached a major milestone with the approval of the Development Scheme in July 2014. The Development Scheme is a regulatory document that controls land uses, infrastructure planning and development within the boundaries of the PDA. Planning of the Maroochydore City Centre PDA has been carried out by Sunshine Coast Council resulting in the preparation of the Development Scheme which was placed on public consultation earlier in 2014.

The approval paves the way for development of the PDA which will establish Maroochydore as the pre-eminent centre for the provision of regional civic facilities and become the major economic and employment centre of the Sunshine Coast.

The Development Scheme includes opportunities for commercial, retail, mixed use and medium to high density residential development as well as new road transport

infrastructure, public open space, rail corridors and community facilities infrastructure necessary to service the Maroochydore City Centre PDA and reflect the regional role of the centre.

The Maroochydore City Centre PDA is located in central Maroochydore on the Sunshine Coast, approximately 100km north of the Brisbane CBD. The PDA is approximately 62 hectares in area, covering Council owned landholdings including the current site of the Horton Park Golf Club and state government owned land on Dalton Drive, Maroochydore.

Now that the Development Scheme has been approved, Council will quickly advance detailed precinct planning which will further refine details around specific site land uses, urban design and architectural outcomes, civic and community spaces and timing for construction and building activity. Construction will commence as soon as the Horton Park Golf Club vacates the site at the end of May 2015.

Do you own property on the Sunshine Coast?

New Sunshine Coast Planning Scheme now released.

Does the new Planning Scheme unlock new development opportunities?

Yes

In an improving property market why now act now

No

You now have less than 12 months to make use of the old Planning Scheme.

I don’t know

Why not find out?

KHA Development Managers are the Sunshine Coast’s leading development consultancy offering a complete range of services to help you not only understand the implications of the new Planning Scheme but take your project from an idea to reality.

• Town Planning • Surveying • Project Management • Urban Design Providing award winning service to ourP clients over 35 years...

(07) 5443for 2844

E andrew.stevens@kenhicks.com.au

CONTACT KHA DEVELOPMENT MANAGERS NOW

Suite 1, Cnr Surf Road and Gardak Street W www.khadm.com.au Alexandra Headland Qld 4572 P: (07) 5443 2844 F: (07) 5443 7146 Suite 1, Cnr Surf Rd and Gardak St E: andrew.stevens@kenhicks.com.au W: www.khadm.com.au Alexandra Headland

PWM AUG/SEPT 2014 - 21

Real Estate Tech Tools words by Ian Ugarte

One constantly hears about vendor finance and seller joint ventures. But to do that you need to do some research about the owners of the property and their situation. There are a few things you can do to investigate an owner, which will form part of the negotiation for your successful deal.

One thing you have to do is paint the picture. What I mean by this is you have to think about the situation that someone finds himself or herself in. Remember that you could get it wrong because you are guessing information to paint the picture or tell the story.

An example of this would be asking a vendor finance deal from a seller that only owns one property and lives in the property that they are selling. It is likely that the reason that they are selling is that they want to buy another property to live in. That means that they need every cent they sell it to you for.

There are a few of exceptions to this. Firstly, if they are an older couple with a caravan in the driveway, they may be downsizing and going around Australia. Or, may be an older person looking at going into a nursing home. In both cases above, and there are other scenarios, the vendors may be happy with you paying interest to them at higher than the bank would give them and that would pay for their trip around Oz. So you are researching a vendor. Where do you start? Below are some easy options to get the deals or research the vendors.

1. Knock on the door- The worst thing that you are going to get is that the owner will tell you to go away. Really techy hey! Everyone concerns himself or herself about the NO. Deal with it. If you do not give someone and opportunity to say YES then nothing will ever happen.

You may be uncomfortable about doing that but always remember what a guy called Vac Ubl says, “Everyday given the opportunity to make a decision, take the uncomfortable option every time.

Because no level of SUCCESS has ever been achieved without some level of DISCOMFORT.” Think about childbirth. Lots of discomfort for great outcome. I haven’t felt childbirth but I have seen it! Does that count, probably not.

If there is a tenant in the property, see what you can get out of them. Tell them you are interested in contacting the owner to do some work on the property – which you are. The tenants lease may have the owners details on it.

2. RP Data, APM, Pricefinder, Investar etc – All of these investment products have the ability to search vendors and sometimes their home address, phone numbers and the other property they own.

This is difficult in South Australia and Victoria because of privacy laws.

So for the rest of the country simply find the address of the property.

22 - PWM AUG/SEPT 2014

I will show you through Pricefinder but all other products have the same ability. It was you use comfortably. Log in and go to the property address and then click on owners name and you should be able to see what else they own.

You can see this property and if I click their name I will find other properties they own which may interest you.

Note: This may not be accurate if the listing is just the surname as there may be many Smiths. So clicking on the individual names will give you better results: You can see that the owners have many properties and as a standard investor you can see what they purchased first and then how they probably revalued and cross securitized to buy the next one and so on. This could be all wrong but you have to guess.

At least now you have owners details. There are also functions to find owners details etc.

3. Talk to the Agent – Ask the agent to meet with you. Do not cut the agent out of the deal and make sure they understand generally what you are going trying to achieve and how they will still be paid.

Sit down and explain the deal in layman terms without using jargon that will be confronting for them unless they are a seasoned investor. If you said to a country person that you want to do an option deal you will lose them straight away.

4. Social Media – Do a name search on vendors once you have their name on Facebook, My Space, Tweeter and any other social media. Including RSVP because that will help you paint the picture if there is a marriage split up.

5. Get the contract – Some states will allow you to get the contract sent to you before you purchase. For example most of NSW agents will email you a contract. Guess what. The owner’s details are on the contract.

6. Mate Spotter.com – There is an unbelievable site that has the ability to find lots of the above information on a name search.

The website is www.matespotter.com. You simply type the name in and you will get information about companies with directors of the same name, social media and photos, license details from every state, ABN’s and much more.

7. Stalk them – Just kidding. But the occasional drive by of the property will give you the opportunity to see the whether they are in the yard or getting out of the car.

Seize the moment and talk to them. Develop a relationship and never shut the deal down. There is always an opportunity. Even if they say NO!

CAN YOU AFFORD TO

RETIRE BEFORE 70?

with Drew Grosskreutz

Are you one of these people struggling from a physically demanding career and with a body wishing for retirement well before you’re financially able?

“We unlocked our super to invest in property” With Otium’s team of SMSF specialists, you can take direct control of your super today and reap the benefits of our expert strategic advice and continued support well into your retirement.

We invite you to attend a FREE SMSF Information Night.

MEET DREW GROSSKREUTZ, EMBA, DIP FP • Qld’s leading Property in Super Expert

• Member of the Self Managed Superannuation Learn why and how the smart SMSF Professionals of Australia • CEO Otium Group investors are taking advantage of property in super.

In 1 hour, the team can teach you in simple terms:

•

FREE SELF MANAGED SUPER Tuesday, 2nd September, 2014 FUND INFORMATION NIGHT How to capitalise on the tax free status of superannuation Receive a free strategy and cash flow analysis.

5.30 - 6.30pm How to benchmark your existing super fund or SMSF

•

Tax and finance tips

• •

What SMSF’s are and how they work for you

against those using property in super

Tuesday, 17 June 2014 Otium Head Office, Maroochydore 5:30 – 6:30pm and

Why is this vital for you now?

•

Wednesday, 25 June 2014 Places are limited, so BOOK NOW! 6:00 – 7:00pm The government budget will affect you

•

To understand whether you can buy one or more investment properties for retirement with your superannuation

•

Every month you wait is less money at retirement age!

To confirm your place phone 07 5443 7364 email info@otiumgroup.com.au Places are limited, so BOOK NOW.

Phone 5443 7364 www.otiumgroup.com.au | www.otiumadvice.com.au info@otiumgroup.com.au

www.facebook.com/OtiumGroup

Do you have a s or will you leave y

Retire Comfortably

superannuation strategy CANretirement YOU AFFORDto TOchance? your

RETIRE BEFORE 70?

with Drew Grosskreutz

Are you one of these people struggling from a physically demanding career and with a body wishing for retirement well before you’re financially able?

MEET DREW GROSSKREUTZ, EMBA, DIP FP • Qld’s leading Property in Super Expert

• Member of the Self Managed Superannuation Professionals of Australia • CEO Otium Group

In 1 hour, the team can teach you in simple terms: •

What SMSF’s are and how they work for you

•

How to capitalise on the tax free status of superannuation

•

How to benchmark your existing super fund or SMSF against those using property in super

•

Tax and finance tips

FREE SELF MANAGED SUPER FUND INFORMATION NIGHT Receive a free strategy and cash flow analysis.

Tuesday, 17 June 2014 5:30 – 6:30pm and

Why is this vital for you now?

Wednesday, 25 June 2014 6:00 – 7:00pm

•

The government budget will affect you

•

To understand whether you can buy one or more investment properties for retirement with your superannuation

•

Every month you wait is less money at retirement age!

To confirm your place phone 07 5443 7364 email info@otiumgroup.com.au Places are limited, so BOOK NOW.

Phone 5443 7364 www.otiumgroup.com.au | www.otiumadvice.com.au info@otiumgroup.com.au

www.facebook.com/OtiumGroup

Last month we had quite a few questions from Business owners wanting to know about commercial properties. Here are two of the best.

“If I purchase a commercial property through my SMSF, am I allowed to operate my existing kitchen cabinetry business from it?”

- David M. The rules for commercial and residential property purchases through SMSFs differ slightly, so this is where some confusion may exist. Whilst SMSF members and trustees (and their family and friends) are not allowed to live in a SMSF residential property, business operators can have their SMSF own their business premises. There are significant tax and superannuation benefits to doing this, although you can’t get away with running things on the sly; your business must pay rent at market value and stamp duty may also need to be paid on the purchase price, again at fair market value.

Generally the property is held in trust for the SMSF, the rental payments are then used to repay the loan, and once the loan is repaid fully, ownership of the property is transferred to the SMSF.

“I’m 56, a glazier and run my business from the large commercial shed I own.

How can I retire in 10 years’ time and not pay tax?”

– Keith N There are two parts to this question; Retirement and tax planning. Commercial property generally yields higher and comes with overheads passed on to the tenant. In the right location, it can be very lucrative.

As a business owner with a commercially owned property in a SMSF, you may have a great opportunity to unlock cash tied up in your business premises.

A complete analysis of your personal and financial situation would be required, but part of your retirement planning may be to continue to own the shed into retirement and use the income to supplement your lifestyle. For a recent client, we had been able to recommend a transfer of a similar asset into a SMSF over a period of years, ensuring a clear business exit and retirement co-existed. Not wanting to pay tax can be handled and minimised using standard accounting strategies. Initially for this client there was tax to pay in the transfer event of moving the commercial property into super, however, once in the super fund and because of his age, the income is now tax free and will be for ever and a day moving forward (trusting the income stays under high tax thresholds).

Do you have goals?

Sure you do. Even if they’re not written down you at least have some idea about what you want to achieve in the next week, month or year right?

How would you like to increase your likelihood of achieving your goals then? It’s something many of my clients are very interested to learn! There’s a simple, underutilised tool that can dramatically increase your chances of achieving those goals you’ve set.

It’s called a budget. That’s right, a budget!

Boring huh? Well, if you’re still reading this instead of skipping to a more interesting column then congratulations. Most people will skip this critical element of attaining success (the budget, not necessarily reading my column!)

If you’re one of those rare people who actually have a budget in place for your personal life, your business or career and your wealth creation then you can skim over this column as a bit of review.

If, however, you don’t currently fit into that category then please keep reading. This could make your life much easier!

So why have a budget? Why is it such a powerful tool? It all comes down to elephants. No doubt you’ve heard the old adage about how to eat an elephant? Answer: one bite at a time of course.

Well your budget is like taking your goals and breaking them down into bite size chunks. Even more than that, a good budget then tracks your performance against those targets and allows you to make decisions about what you need to change or improve in order to stay on course.

Picture this: you’ve just boarded your yacht (you made a killing in the property boom of 2016/17!) and you’re setting sail from Brisbane bound for the beautiful Whitsundays. You’ve planned your course and have programmed the GPS as well as drawing your route onto your marine charts for backup. Now it’s simply a matter of heading below decks, cracking open the bubbly and kicking back for a few days while the autopilot does the rest!

Right? Of course none of us are naïve enough to believe this scenario. There will be constant checking of coordinates, comparing to charts, GPS, compass and so on. Conditions will change along the way and we need to check and correct to ensure we arrive safely.

So why do we jump into our ‘yacht’ in our lives, with no clear heading, no course to compare our position to and certainly no tool to measure our progress and expect to arrive safe dry with everything we want?

Perhaps part of the reason we don’t budget is because it requires us to commit to a direction. Perhaps it’s because we lack the skill, the tools, the belief. Whatever the reason it’s time to bust a few myths…

Myth #1: Budgets are just make believe anyway, so why bother?

It’s true, a budget is a set of figures that don’t exist yet but they serve the same purpose as setting our direction with a compass.

They point us in the direction we’d like to travel. It’s the difference between landing in the Whitsundays and winding up in Antarctica.

PWM AUG/SEPT 2014 - 27

Myth #2: You need to be an accountant to understand them.

While a bit of accounting or bookkeeping knowledge can be helpful it’s certainly not a prerequisite to building an effective budget. Some of the best budgets I’ve seen over the years come from plumbers, mechanics and massage therapists! You simply need to care about where you’re going financially and have a basic grasp of numbers.

Myth #3: You need expensive software to build and update a budget. The truth is, the most effective budget is the one you refer to often and keep updated with actual figures to compare to your projected outcomes. This could exist in a ledger book, an Excel spreadsheet or a fancy piece of accounting software. The key thing is that you refer to it regularly because it means you can make adjustments to your course before you arrive somewhere you hadn’t planned on.

Finally, here’s a simple 5-step process to determine your budget figures and get you started with that navigational chart: 1. Write down everything you intend to spend money on in the next 12 months. Include things like personal mortgage payments, living costs, savings, personal goals such as holidays, cars and the like. Make sure you also add school fees, medical and dental, clothing and shoes and all other personal expenditure. Total all these items and you have your annual profit target. This is the amount of profit or dividends you need to receive from your job/ business/investment portfolio for the year.

2. Now, add up any business, employment or investment expenses you’ll incur to generate that ‘profit’ over the next 12 months.

For example, if you’re a business owner you’ll need to total your operating expenses for your business such as commercial rent, wages, insurances, accounting fees and so on. If you’re a professional investor then you’d add up items like repairs and maintenance, agents fees, insurances and advertising. This is your total operating costs for the 12 months.

3. Next, add your expenses from step 2 to your profit target calculated in step 1 and you have an annual revenue budget.

Hopefully it’s not too scary a number or you might need to go back to step 1 and reassess some of your goals!

4. Simply divide everything by 12 (to get monthly amounts for revenue, expenses and profit) and enter those figures into whatever tracking tool you’re using. That could be an Excel spreadsheet or some other software or simply a ledger book as mentioned.

5. The final, and perhaps most important step, is to enter your actual amounts into your tracking tool every month. This shows you how you’re progressing against what you budgeted or planned for and allows you to make decisions about what to change or continue so you achieve your financial goals.

Simple? Perhaps. Easy? Not necessarily, which might explain why many don’t do this.

Take the time to budget though and I assure you it’ll help you make better decisions about what to spend your money on, how much you need to make and whether you’re bound for the Whitsundays or a visit to the penguins…

Land ho! Warrick

Beautiful You, Op Shop The Beautiful You, Cancer Charity Shop front has been established to help raise funds to support women and their families living with cancer.

Please drop in and have a look, not only is this an op shop full of funky fashion, accessories, bric-a-brac and furniture, it’s a place you feel your senses come alive.

Stop for a coffee or an aromatic tea in the retro coffee lounge.

1/7 Norval Court, Maroochydore Ph: 5443 4646 Open Mon to Fri 9am to 5pm & Sat 9am to 1pm.

Online at http://beautiful-you.com.au/ WISEBUYS STOCKISTS: 100% Recycled Paper Kids Table & Stools $25 Target, Carbon Globe Wide World Lights $12.95, De Longhi Vintage Icona Coffee Machine The Good Guys $249, Elevator lamp The Hall Cotton On $39, Ikea senior cast iron frypan $39, Rope light by RAW Sunshine Coast $35, Teos 65 Basin Made in Italy from Studio Bagno $250, Timber garden bed Bunnings $39 28 - PWM AUG/SEPT 2014

karen giulietti S T Y L I S T

karengiulietti.com

PWM AUG/SEPT 2014 - 29

Acreage House & Land Packages. $257,500

“The Monkland” On 1.5 acres 6880m2)

1.5 acres

Artist impression only.

3 bedroom house with timber deck and verandah and double car accommodation. Along with all of our standard inclusions for bringing a house to fruition this one also includes, carpets, tiles, light fittings, ceiling fans, tv antenna, clothes line, letterbox, dishwasher, vertical blinds, 1.5kw solar power, 2 x 5000 gal poly water tanks on concrete slab, advanced secondary treatment plant.

“The Corella”

On 2.4 acres 9671m2 4 bedroom home + 6 x 9m shed

This incredible package will get first home buyers into a beautiful home with nothing else to spend. This well designed home would also be perfect for anyone looking to downsize and get away from the ratrace. Everything ready to move in and enjoy the peaceful surroundings of your very own piece of paradise.

$286,950 2.4 acres

Artist impression only.

4 bedroom, 2 bathroom house with timber deck and verandah.

Along with all of our standard inclusions for bringing a house to fruition this one also includes, carpets, tiles, light fittings, ceiling fans, tv antenna, clothes line, letterbox, dishwasher, window coverings, air conditioning - 2 split systems, 3 kw solar power system, 2 x 5000 gal poly water tanks on concrete slab, advanced secondary treatment plant. Also included in this amazing price is a fully erected 6x9 metre steel shed on a concrete slab.

A beautiful four bedroom home that has been carefully designed for easy family living, taking advantage of the serene setting of this 30 - PWM AUG/SEPT2014

lovely rural land. This package has everything, perfect to move right in as investor, start recouping your invest immediately. All you need to do is select your colours and we do the rest for you. Worry free building with a beautiful rural retreat to enjoy on completion. In a steadily growing area, the estate is tucked away for quiet and easy living and only 15 minutes to town yet still having room for children to play, a dog to run around or even a horse. Plenty of room for your boat or trailer which are always a challenge on those smaller blocks in suburban estates.

.com.au PWM AUG/SEPT 2014 - 31

THIS OLD HOUSE It’s easy to fall in love with a Queenslander, however love often comes at a price.

A

s I wrestled with ideas to introduce my story on a Queenslander makeover, I thought stealing a line from that Shakin’ Stevens song this old house – you know that cheerful ditty from the 80’s?

But as I researched it I found out it had a much older and somewhat more gloomy overtone and in fact is about some dude waiting to die. Wikipedia for those interested relates the songs original Authorship including; “Hamblen was supposedly out on a hunting expedition when he and his fellow hunter, actor John Wayne, came across a hut in the mountains. Inside was the body of a man, and the man’s dog was still there, guarding the building.

This inspired Hamblen to write “This Ole House”.

So no song lyric to introduce this one, just a word to the readers that just like my investigating the words to the song, taking on a Queenslander is often more than meets the eye (or ear) – expect one thing and you will find quite another.

It is easy to fall in love with a Queenslander; timber VJ’s that lengthen the already astoundingly high ceilings, the wide verandah’s and absolutely gorgeous period features such as decorative architraves, intricate window panelling and louvres.

However love often comes at a price. It is possible in a renovation that nearly everything you touch will need attention.

Invariably when you buy a typical original ‘Queenslander’ you have bought a house that was built in the period of the mid 1800’s to the 1940s when more boxy (post war) designs started to take over. However the style has remained its own architectural style and is still used today because it is practical and best suited to the regions’ climate. Essentially it’s a timber house with a wide 32 - PWM AUG/SEPT 2014

veranda and big internal rooms with a kitchen as the central living area. Rarely was there an inside toilet or car accommodation in the pre war era. The size and range of these houses is varied. A little research can give you guidance on maintaining an original finish and all the tips trick and pitfalls.

My story begins with a house and a plan. The plan was a subdivision and sale of two blocks, easy, right? It was until we were convinced by our agent that even with a slight ‘makeover’ we would fetch more with the house than for just the land. We went through the house that we were going to either remove or bulldoze time and time again. It was a big job. The house was a deceased estate and had been uninhabited for years. It was dirty and musty and each room was a different and more hideous colour than the other.

We discovered newspapers from the 1940’s onwards where it was used to line everything from drawers to the various layers of lino that hid the beautiful timber floors. We found a Catholic Missal from 1938 and genuine ‘priceless’ art deco light fittings unlike any reproduction you could find. The house spoke to us of a long life and certainly one deserving of more than being scrapped.

A neighbour walking past told us ‘she’ was built 110 years ago (the neighbour was old but I doubt she was there!). Possible, but unlikely. I’ll bet late 30’s at the earliest.

The more we visited though, the more the house grew on us. It was somewhat intangible but it really was a seduction. Within weeks we were referring to the house as “her” or “she” and talking about “the old girl”. Once again I ignored my own advice and decided to give it a crack.

As for our challenges I will list some for you. They are pretty much the same for all of these projects if you read some blog sites regarding love struck Queenslander renovators. I suggest you read some just so you go into a decision with your eyes open. * Accept that nothing is plumb. The walls, floor, ceiling, door frames and window frames will not be in line or level, FULL STOP. Remember that in a period of depression and world wars, economy and scarcity of resources were the design drivers. The timber was locally sourced and ‘hard’ hardwood most times. It gives it beauty and sturdiness but not always a level of finish or the precision of nowadays (no power tools back then). * This theme ran into the plumbing and electrical. They can be major issues and a safety consideration when often wiring was not done by qualified trades and there was no such thing as a safety switch. Plumbing can be costly, in our case a long period of no use saw the galvanised plumbing rusted through and requiring a huge amount of work. On the good side a Queenslander on stumps has really good access. * When these homes were built measurement wasn’t metric! It can be a big challenge to replace timber that the years, pests and neglect have eroded. Try demolition suppliers to source tongue and groove floorboards, VJ and weatherboards which are often odd sizes. If this doesn’t work enquire with your timber supplier to see if they can be milled for you (it is expensive and can take weeks). The alternative is to match as well as you can with more modern materials and sizes even if this means replacing larger sections. * We were not the first generation of renovators’. Older houses were often modernised over decades and just like today this could have been for good or bad. In our case, Bathrooms and downstairs additions were clad in asbestos which is costly to remove. Paint older than 1970 undoubtedly contained lead. Be careful and get the right information here: http://www.deir.qld. gov.au/asbestos/ http://www.environment.gov.au/protection/ publications/lead-alert-six-step-guide-painting-your-home In all, the time and money spent on the old girl was worth it. I really hope she goes to a new owner who appreciates her beauty and grace and who will love her despite her lumps and bumps.

I really hope when the old girl is finished she goes to a new owner who appreciates her beauty and grace and who will love her despite her lumps and bumps. words by James Lee

PWM AUG/SEPT 2014 - 33

design wise

Executive Townhouses Townhouse sounds more upmarket than unit, apartment or duplex and adds value at no cost. When naming your development think of what people love in the area and be guided by it in choosing the name. These townhouses are on the top of Buderim and are at number 1 in their street. We named them “One on Fielding”, playing on the Buderim saying of “On Buderim” suggesting exclusivity. l

Balustrade tip. Open tops make it harder to climb over, therfore provide better security. Make sure you use a size of aluminium that has a standard knock in top to avoid the cost of welding them all closed.

l

Plants as a barrier. Divided driveways with Cyprus trees as they don’t spread far and block access, look tidy and don’t drop a lot of leaves

l

Louvre windows. A great way to catch breezes and you can clean the windows from the inside and get both sides clean. Gone are the days of them being a security hazard as they are easy to screen.

l

Blend colours to fit with landscape. Look at items like surrounding tree bark colours and feature garden foliage to set the home into the landscape rather than on it, makes the structure feel more homely.

l

Deep eaves protect from rain as well as sun. This sun protection helps make carpets and flooring last longer before it needs replacing or restoration.

Photo: Holly T Photography

trendwise

bricks

Why we use brick.

This centuries old process and material has stood the test of time. It’s fantastic in hot and cold climates as well as extremely low maintenance.

Dollar for dollar it’s a smart buy and makes a fantastic architectural statement.

La Paloma 290x 50mm Euro brick, 4 colours Dry pressed Bowral 50 slim brick, 5 colours Glazed Burlesque brick, 5 colours Ultra smooth faced brick, 6 colours Blown face fired brick 9 colours

TownHouse design by “Adrian Ramsay Design House”

36 - PWM AUG/SEPT 2014

Bricks and images from BRICKWORKS

diywise

concrete bench

Follow Up:

The amazing final results of last editions “How To”. Steel trowel finish to create a

smooth and unpolished look. Finished with

food grade matte sealer, keeping it natural.

selectionwise

colour by: Adrian Ramsay Design House

GET THE HEX tiles in hexagon form are a break from traditional rectangles and squares, creating a modern and exciting change. mix with natural timbers on the floor or as feature walls.

WALLPAPER create your own colour way at ethicalheart.co.nz GET BUSY WITH IT colour as a story. buttery lettuce with ocean blue and raspberry. paint a feature wall or a ceiling in one colour or maybe a striped wallpaper to set a beach side mood with a twist. use floors of grey, black or white to set it all off.

PWM AUG/SEPT 2014 - 37

25

13

$

$

39

$

35

$ 38 - PWM AUG/SEPT 2014

WISE BUYS

249

$

39

$

by Karen Giulietti.

“Add value and style to your property with these great shopping finds.”

250

$

39

$

*see page 28 for stockists

StyleWise

coveting copper Warm metals are the new cool, with copper being the winner thanks to its ability to age beautifully and its suitability for outdoor use. This glowing colour doesn’t boast. It doesn’t overwhelm.

Copper makes its presence known subltly while stealing the show. Paired together with blacks, greys and timber, whichever way you use it, it never fails to leave an impression.

1.

by Karen Giulietti.

2.

4.

3.

9.

5.

8.

7.

6.

11.

10.

12.

1. Antique Copper Pot $45. 2. Astra Walker Copper Basin Mixer approx $623 renoexchange.com.au. 3. Black Cord light with Copper designstuff.com.au $69. 4. Bloomingville Pendant Copper from designstuff.com.au $189. 5. Copper Real Good Mod Chair by Bludot.com.au $399. 6. Low Triangle Pendant Douglas and Bec $390. 7. Pernille Copper Pendant from Designstuff.com.au $398. 8. Robert Plumb Wall Mount Copper letters $40. 9. Table Lamp in Black with Copper Shade from designstuff.com.au $429. 10. The block shop adjustable outdoor light $89.95. 11. The design hunter copper basket $225. 12. Urban Couture Geo Copper Ceramic Vase $79.

PWM AUG/SEPT 2014 - 39

POMO’s bush studio win Queensland Sustainable Building Design Award

POMO’s “Bush Studio” has taken out the category for best Sustainable Commercial Building Design at the Queensland BDAQ (Building Designers ASSOCIATION QLD) awards held on Friday July 25 in Brisbane.

After WINNING in the Sunshine Coast region and now the State title for sustainable building design, the studio will go on to the national competition to be held later this year in Melbourne.

Co-designers Stephen Burton (Creative Director, POMO) and Simon Scott (Principal of SSB Design Studio) collaborated on the award WINNING sustainable design.

World-reknowned architect and sustainable design proponent Kevin McCloud is flying in from the UK to judge this specific award category alone and will meet with both Stephen and Simon to discuss the sustainability features of the bush studio.

“We are stunned and thrilled with the WIN ,” Stephen said after receiving the award on Friday. “I feel very privileged to have received the award.”

“It’s been a very REWARDING process taking the design from concept to a tangible, serene work environment.”

The building is on the side of a valley in the Sunshine Coast hinterland and features a 6 metre drop at the front with a full 40 - PWM AUG/SEPT 2014

DECK viewing platform. The roof is designed to create a waterfall that cascades from the roof in front of the deck when it rains, returning the water to the natural landscape and leaving as little footprint on the surrounding old-growth forest as possible.

The sustainability features of the design include:

minimal use of hardwood structural timber, opting instead for manufactured timber beams sourced from plantation forestry  full plywood interior, also sourced from plantation forestry  no use of carpet on flooring (exposed manufactured board instead)  no paint on internal surfaces  all rainwater returns to the surrounding bush via a waterfall from the front the building onto rocks below  exclusive use of LED LIGHTING throughout reduces power consumption by over 80% compared to our previous working location  heavily insulated ceiling, walls and verandah roof to reduce reliance on air-conditioning and heating  northerly aspect with ceiling to floor glass frontage to use the sun to naturally heat the building inwinter 

no earth moving was required on the site, all soil unearthed from hole drilling was used inlandscaping around the building  no major trees were REMOVED from the site, instead the building was located in a corridor of old-growth bush trees using the trees as a feature  the natural canopy of surrounding trees protects the building from direct sun in summer thus keeping the building temperature low  all internal desks and tables are made from plantation forestry pine or plywood  all glass and steel was sourced locally from the Sunshine Coast The studio was built by Tim Coates and Cal Fraser. 

http://pomo.com.au/

PWM AUG/SEPT 2014 - 41

Simple Features

Simple features to add value to your investment properties The idea of adding a feature to your garden is to give it some interest, to really draw the attention to certain parts of your yard and give it a bit of Wow. The majority of yards are really lacking this especially rentals and I think that a few simple little tricks can really give

by Leigh Barrett Living Style Landscapes

your house a lift. This is very important when selling your home because the first impression is the front landscaping. And equally so with rental properties, if you have a more appealing house and yard this could possibly boost your rental returns.

Screens

Screens are a really effective way to add some spunk to your garden and they are definitely the ‘in thing’ to add to your home at the moment. The variety is HUGE now with more options available with different designs and also materials. They are a fabulous way of screening off any ugly bits in your yard such as bins or pool pumps or perhaps you have an old fence which could do with a bit of jazzing up. There are also some great DIY options available for a weekend project - check out a great local company ‘Sanctum Screens’ http://sanctumscreens.com/ they have a large range available from DIY timber to custom made steel screens.

Pots

Pots would have to be the easiest way to add an impression in your garden design. With many different varieties and colours to choose from there is a pot to suit any design. My suggestion is to find a spot in your yard that is a highly visual area or focal point from your house eg courtyards, front door end of hallways etc. Strategically placing a pot into these areas is really going to draw the eye in and give some impact for that area. I personally love the Urn style pots in your garden they are really large and therefore create a bigger wow factor. These particular styles of pots don’t even need a plant in them and many pots won’t, they quite simply look good on their own, even easier!

42 - PWM AUG/SEPT 2014

Plants

A very simple but often overlooked feature is just a certain type of plant placed in the right position. Just by using a plant with a different leaf structure, colour of height will create a ‘stand out’ in your garden. Again look for an area in your yard that you would like to draw the eye too.

A couple that we really like to use and ones that our clients always comment on would be the Frucrea, Giant Bromeliad or try an Aloe tree for a bit more height. The options are endless but these are a few of our favourites and the bonus with these particular plants is that they are very drought tolerant and low maintenance.

Lighting

Lighting is often overlooked with garden design which is a shame because it is a fabulous way to enhance your landscape project; it helps to take on many new dimensions in your outdoor space.

The best use for garden lighting is to illuminate your special features in your landscape adding that touch of class. This could be a stunning feature tree, running waterfall, pots or screens.

Although garden lighting is generally not something a prospective client is going to see when inspecting a home it is a great selling point and also creates beautiful photos for your advertising.

Fire pits

At this time of year a great addition to your yard could be a Fire pit. It gives the idea of an inviting space in your yard which people can really visualise and this is very attractive to buyers and renters. This is a really simple feature to create too, pop on down to your local hardware store they have different options available and you can decide on what would suit your style and budget.

Water features

Water features are a great way to add an impact to your garden and yes they are fabulous if done right and maintained. BUT this is for an investment property and I would strongly recommend not adding a water feature as there will be some maintenance involved and it can be a costly exercise if things go wrong. They can also scare some buyers off because of the maintenance factor and also families with young children may be concerned.

So as you can see there are plenty of ways that you can add some impact to you garden without too much effort.

PWM AUG/SEPT 2014 - 43

What is Cross Collaterlisation of security?

Basically cross-collateralization is a term used when the collateral (your home or investment property) for one loan is also used as collateral for another loan. If a person owns a home mortgaged to the bank and then uses any net equity as collateral for a new loan to purchase an investment property your bank will often cross collaterise the security. Essentially the new loan contract for the investment property will have your fhome and the new investment property as security.

This is the preferred structure when dealing with banks as it is simpler process and gives the bank extra comfort knowing that they can essentially sell up both properties to clear the debt should you default. So what are the pro’s and con’s of cross collaterising security for you and what are the risks?

One benefit for you is a simpler loan application process. Rather than taking out two loans (one against each security property) to purchase the property you only need to take out one. Also to really protect yourself you need to structure each property’s finance independently, using different lending institutions.

If you have more than one property, say you have four investment properties and are keen to grow your portfolio and need the equity in all four properties to purchase the new property it can be a big task if you have each of these properties independently secured against their own loans with different banks. It can also hamper your ability to get the finance as the majority of banks computer score loans and the 4th bank’s credit scoring would be affected by 3 other recent credit enquiries on your credit history.

By independently structuring each investment property as sole security against a single loan with a single bank you protect yourself should your situation deteriorate. It will take different banks differing time frames to take your property through the collections process and rather than one bank putting all of your property on the market at once and then paying down the debt as one sells you hold more control when your finances are not cross collaterised and split amongst banks.

44 - PWM AUG/SEPT 2014

Adam van der Helm Loan Success

For the normal mum and dad property investor I believe you complicate things too much trying to separate all of your property lending. You may choose to separate your principle place of residence from your investment property lending and this is probably wise.

Avoiding cross collaterisation is probably more relevant in business lending or commercial lending where by the banks have more control than they do over Credit Code protected residential lending. With this type of lending the banks can have written into the loan contract review periods of financials and valuations, this gives them more control as you have more assets secured that they can force you to sell down should they decide they are not happy with your current lending situation.

Different banks will carry out these reviews and your related lending facilities at differing periods with vastly different policies so by keeping your facilities with separate loans, individual security and different lenders should one bank carry out a review and demand you pay down the debt they can only force you to sell the related security and not all of your security as would be the case when you cross collaterise.

All in all though it depends on your situation. For the basic mum and dad investor that owns an investment property or two in my opinion cross collaterising give more pros than cons as it is simplier, you have a greater chance of approval and you have a certain level of control if you ever sell one of the properties as you may find that the remaining security is sufficient to cover the debt leaving all of the sales proceeds as cash into your account.

This is called a partial release of security and is another benefit of cross collateraising where by if you have three properties securing a loan, you sell one, the bank values the remaining two and decides they hold enough security in those two properties to leave the current loan as it is. You can decide what you want to do with the loan proceeds. Pay down that debt or other debt or purchase further assets. In my personal experience I have found this a big benefit.

Commercial property contracts in Queensland Commercial property generally refers to properties such as retail shops, vacant industrial land, offices warehouses, factories, storage sheds and the like.

If you are considering purchasing commercial property in Queensland it is more than likely that you will be entering into a Real Estate Institute of Queensland (REIQ) form of a contract.

Matters to be aware of with Commercial contracts 1. Cooling Off Periods There is a five day cooling off period with a residential contract which allows a buyer to terminate for any reason within the cooling off period. There is no such cooling off period for commercial contracts.

2. Use of Land As the value of commercial property is linked to its usage, it is vitally important to ensure that the use that is sold is a permitted one. It is the buyer’s risk to ensure that the use of the land is an allowed use with local government and that all appropriate approvals have been obtained for such use.

3. Leases It is common with commercial property for there to be a lease in place as that generally gives the property the value it has. It is critical that such leases are reviewed by your lawyer to ensure that they do not contain clauses that may impact the value with unduly onerous or unusual obligations on the landlord.

4. Documents Apart from the physical land and buildings that will be transferred, there are generally more documents that need to be collected and reviewed as part of the settlement of a commercial contract.

These can include documents such as the Certificate of Classification for the building, the plans and drawings relating to the construction of the buildings, other documents to enable management of the tax (e.g. depreciation) for the buildings and lease

documentation which could include lease extension documents and tenancy assignment documents.

5. Financing and Settlement Periods Typically a residential contract is generally conducted within a 30 day timeframe. With commercial contracts the timeframes for settlement are generally for longer periods because of the level of scrutiny that will be required. Consequently, buyers will seek more time to obtain finance and conduct their due diligence and settlement is also more likely to be in excess of 30 days.

6. GST Special attention must be paid to ensure that any purchase price negotiated has considered the application of GST. GST may apply in certain circumstances and may be excluded in others. Either way, before a contract is signed, advice needs to be obtained to make sure that there is complete understanding and assurance that the price to be negotiated either includes GST or not. Otherwise a Buyer may need to find an extra 10% of the purchase price or a seller could be getting 10% less than what is expected.

7. Due Diligence As the reasons for purchasing a commercial property are varied (e.g. purchasing for own business usage, investment, development), a buyer needs to be properly advised before signing a contract. This is to ensure there is scope to conduct such investigations or enquiries into the property, or the use of the property is included in the contract. The point of such investigations is that if a buyer is not satisfied with the results of their enquiries that they have the ability to terminate the contract and obtain a refund of any deposit paid. Because of the vagaries of commercial contract transactions it is more common to have such contracts “tailored” than having contracts with just say conditions like a finance clause or building inspection clause to satisfy. Your solicitor should be consulted early in the negotiations to ensure that you are properly protected through the contracting process.

PWM AUG/SEPT 2014 - 45

Thinking of selling? Don’t forget the tax!

One of the rudest shocks investors get when it comes to selling for a profit is an unexpected ATO bill. This comes about due to confusion over what is a capital gain and how is the tax calculated and the timing involved.

To start with there is no special tax rate for capital gains! If you make a capital gain from the sale of a property then this gain will be added on to any other income you earnt (e.g from wages) and then that total income will be taxed at the relevant marginal rate.

Lets start at the beginning and for ease of understanding lets presume this property was only ever an investment and was never lived in by you.

A capital gain is calculated on properties from contract date (NOT settlement date) to contract date. The capital gain is the net result of the cost base less sale price.

The cost base of a property includes (but is not limited to): • Purchase price of property • Legal fees on purchase & sale • Stamp duty • Advertising property for sale • If you have claimed capital works (2.5% depreciation) on a property this amount will be subtracted from the cost base (if property purchased • Other costs not able to be claimed as a tax deduction e.g Government searches & fees • Note that the payout of the loan is irrelevant for this calculation & is not factored in anywhere If you have made a capital loss in the past then at this point you apply that capital loss against your gain. It’s important to note that when you make a capital loss you CANNOT apply that loss against any other income (from wages etc) except a capital gain.

A capital loss will not however be lost & will be carried forward in all future tax returns until a capital in made.

If you owned that property for longer than 12 months (i.e 12mths & 1 day) then you are entitled to a 50% General Discount on 46 - PWM JUNE/JULY 2014

that gain. The primary reason people get caught caught out with capital gains is when the are selling an investment property & rolling the equity straight into another property. This means you might not physical receive the funds into your account but you will still need to come up with $41,148 to pay the tax bill!

This is a really basic example & I have largely ignored many other factors that can come into play when making a capital gain (e.g living in the residence for a period of time, fixtures & fitting sold with property, inheritences etc etc). For this reason I always recommend you do the calculation on capital gains & have them checked by your accountant before you sell any property so you have a clear understanding of what tax implications this may have.

Happy Selling

Capital Gain Calculation:

Purchase Price...................... + Stamp Duty........................ + Legals............................

Fees (bank & government)............

Sub-Total...........................

Less Capital Works Claimed..........

Cost Base...........................

$325,000 $9,525 $1,625 $215 $336,365 $15,000 $321,365

Sale Price..........................

Less Cost Base......................

Total Capital Gain..................

Less Capital Loss...................

Adjusted Capital Gain...............

Less 50% General Discount...........

Net Capital Gain....................

$545,000 $321,365 $223,635 $6,500 $217,135 $108,567.50 $108,567

Wages (tax paid $13,622)............

Capital Gain........................

Total Income........................

Total Tax Payable...................

Less Tax paid on Wage...............

Tax Bill............................

$65,000 $108,567 $173,567 $54,770 $13,622 $41,148

Tax Return Calculation: Income

Grow Your Investments Isn’t it time to move to an accountant that shares and understands your passion for property?

568

Commercial Rent (over $75,000 turnover) New Residential Property Built Subdivisions

  

(depends on your circumstances)

Renovate & Sell

(depends on your circumstances)

X X

3

4

5

15,264

2

96,991

1

14,555



X

34,967

Residential Rent

180 hours each year are spent by our accountants learning about property & related taxes.

How many properties do people in Australia own?^

318,000

Do you know how GST applies?

We claim 7.5% more rental property deductions than other accountants in Australia.^

1,284,852

The number of rental properties our clients have (not including developments)

6 or more

Rate at which Land tax threshold is reached per state^.

ACT

$1

NSW

$412,000

QLD

$599,000

VIC

$250,000

WA

$300,000

TAS

$25,000

NT

No Land Tax

^Based on owner as an individual person – excluding structures.

Unit 5, 61-63 Primary School Crt. MAROOCHYDORE Qld. 4558 Phone 5448 9600 growaccounting.com.au ^ATO provided statistics

Specialists in Property Development Advice  Tax Returns with Rental Properties  Structure Advice

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48 - PWM FEB/MAR 2014

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