Monday, May 14, 2007

Newsletter May 2007

Our goal – helping you from zero investment properties to ten
(if the dream is big enough, the facts don’t matter)

Question – do you think that property will continue to increase in value indefinitely?

Answer – it all comes down to demand – if there is continuing demand, prices will keep increasing.

So ask yourself – in what circumstances will demand for housing evaporate?

And if that did happen, how long will demand stay low?

Fact – in the 1991 recession (“the recession we had to have”) prices fell just 3%, but by 1996 they had recovered. And have kept moving ahead strongly since then.

Conclusion - Don’t let those journalists steal your future.

The basics of property investment

When it comes to residential property investments, there are two broad issues to address:

(a) the good solid fundamentals i.e. priced below the median, attractive to tenants in that area, in a growth corridor, close to a solid cluster of jobs, close to transport, schools, shopping centres etc etc and

(b) the packaging i.e. the legal structure, updates to your wills, the funding product, the accountancy support, the quantity surveyors report, rental management etc etc.

How we can help

1. We provide various streams of information – the benefit to you is that you are able to make a fully informed decision on you own.

2. We provide a detailed investment analysis – the benefit to you is that (after we take into account all the inflows and outflows) you will know precisely what your out-of-pocket to hold the investment will be.

3. We introduce to specialist funding professionals – the benefit to you is that you will be offered the appropriate loan product (tailored to your individual circumstances) to speed the development of your portfolio.

4. We introduce you to a specialist property lawyer – the benefit to you is that you will have peace of mind that your investments are structured correctly, and that they will pass (intact) to your intended beneficiaries upon your demise.

5. We introduce you to specialist property accountants – the benefit to you is that you obtain maximum benefits of having your names on the title of your investment for the least personal out-of-pocket.

6. We find the investment for you – the benefit to you is that you know that we have researched areas in growth corridors to find where there are long-stay quality tenants, paying a relatively higher rent, and that the accommodation is what the ideal tenant wants (and that the investment is priced below the median).

7. We introduce you to a specialist rental management company – the benefit to you is that you don’t have to deal with the day-to-day management of the investment, and you can take comfort in the fact that the firm that you engage makes its livelihood from its skilled management of investors’ properties.

8. We will continue to give you advice on portfolio management – the benefit to you is that we remember when you should consider putting your next in place, and provide advice on an appropriate geographic diversification.

I take a 15-20 year view of the relationship with private clients. My practice is based on long term relationships, repeat business and personal referrals. And none of that happens unless you are at peace with the first investment that I share with you.

Start with the Goal in mind

When you are learning to snowboard, they tell you to focus on where you want to go.

So if you want to go between the trees, focus on the gap and your feet will automatically put the right degree of pressure on the board to get you there – between the trees.

But – they say – “if you focus on the tree, you’ll get the tree.”

It’s the same with property investing – start with your Goal in mind.

What is your Goal?

And what is your exit strategy?

Your goal in retirement – Be Happy

As you approach retirement, you need to set yourself some new goals – after all, your job won’t be there to provide you with that same discipline.

And your job just doesn’t just provide you with an income. For most of us, it also provides us with friendships.

So once you are free of all the shackles that a (40-45 hour a week) job burdens us with, you will have achieved freedom, so plan to be happy in that new, and unusual, state.

But happiness has to be earned. And it’s a complex thing to achieve.

Cutting to the chase, research suggests that we will still want to feel a valuable member of the community, so don’t plan on being a volunteer – those organisations can rarely offer you a match to your abilities.

However, most of us can take a teaching role, and that’s what I am now suggesting that my private clients consider as part of their retirement plan.

Most of us have specialist knowledge – in domestic experiences, from a hobby, from a profession, from travel.

So take that knowledge and offer it back to the community – the discipline will do you good, you will be doing something worthwhile, you will be respected, and indeed you may even get paid for it.


Bernard Kelly

Mobile 0414 – 778 518 cell phone 61-414 778 518
P.S. your greatest compliment would be a Personal Referral