1. POSITIVE
MAGAZINE
TO GET STARTED GO TO:
www.positiverealestate.com.au/lmp
REDUCE
YOUR TAXES
HOW TO SPOT
A HOTSPOT
Save your salary with
these simple tips
We reveal expert
hotspotting tips so you
can buy before the BOOM!
GOODBYEHow property can create a passive
income and help you retire sooner!
December 2014
www.positiverealestate.com.au
KISS
YOURJOB
2. 2
KISS YOU JOB GOODBYE
MEET PAUL & ANA
CONTENTS
How property can create a passive income and
help you retire sooner!
This average couple are able to purchase a $1.5 million
property portfolio in just two years. Discover how!
4 HOW MUCH DO YOU REALLY
KNOW ABOUT INVESTING
Take this quiz and find out
6 HOW TO SPOT A HOT SPOT
We’ll show you how to be smart
about this
8 PAY YOUR HOME OFF FAST
Wouldn’t it be better to keep those
interest payments in your back
pocket? We tel you how to do it!
10 REDUCE YOUR TAXES LEGALLY
So you want to reduce your taxes?
Take advantage of the many legal
methods of reducing your tax!
11 BIANCA & MATTHEW STORY
Learn how they bought 4 properties
in 5 months and only paid $1000
income tax!.
13 SMSF CLUB
Read about the first place many
investors stop when looking for
finance information and assistance.
14 GIVING BACK
We’re proud to have contributed
more than $324,000 to Room to
Read’s school construction programs.
16 LIFETIME MENTORING
The 6 reasons why the Lifetime
Mentoring Program delivers results
18 OUR CLIENTS
Real life results
21 THE SMSF CLUB
Retirement can be scary without the
right plan.
22 OUR CLIENTS IN THE MEDIA
19
12
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*Conditions apply, please refer to the website for more information. These scenarios do not take into account your personal circumstances, for more
information on these results see the website. All information is of a general nature only and does not constitute professional advice. Please seek advice
from licensed professionals about your personal situation. This information is subject to the disclaimer on www.positiverealestate.com.au/disclaimer
POSITIVE
MAGAZINE
3. 3
POSITIVE MAGAZINE EDITORIAL
HIINVESTORS,
T
here’s nothing more
satisfying than looking
back over the past twelve
years and seeing the real profits
created by over 4000 of our
investors. It’s a sensational
feeling when I look back at
deals we sold just a few years
ago and see how much those
properties are worth today.
Positive Real Estate is now
one of the leading property
investment companies in
Australia. We’re helping
thousands of everyday Aussies
get fantastic results from
property investing.
Our service delivers trusted
meetings with property and
finance professionals to
produce profitable solutions.
An investor can sit down one
on one with our team members
and utilise all of our four
services (Property Coaching,
Real Estate opportunities,
Finance, and SMSF) in a single
appointment. Our teams
dramatically change people’s
lives because they work in
absolute harmony!
All our properties are sourced
by our Investor Agency, which
is run by the Acquisitions Team.
We source the best properties
available and offer access to
markets that would never be
identified through traditional
residential real estate firms.
The Investor Agency is always
on the pulse of the best areas,
market trends and ideas.
Our teams of property experts
are called upon by reputable
industry media publications
to provide unbiased advice,
cutting edge commentary
and educational content.
We are nationally recognised
for unveiling crucial hotspot
locations before the crowds
move in.
At Positive Real Estate,
we know that education and
surrounding yourself with a
team of experienced investors
is the key that unlocks the
door to financial freedom.
Take a read through the pages
of this magazine and you will
find numerous stories of our
clients, every day people like
you and me, who have achieved
extraordinary results through
property.
You will also discover practical
tips and strategies that will
safely take your property
portfolio to the next level while
bypassing some of the most
common investor mistakes.
I hope this helps you on your
property investment journey.
SAM SAGGERS
CEO Positive Real Estate
Happy investing and I look forward to seeing
you at one of our future events.
4. 4
HOWMUCHDOYOUREALLYKNOW
ABOUT
INVESTING?
INSTRUCTIONS
Mark your answers then
see the Quiz Scoring
Guide (next page) to see
your results.
POSITIVE MAGAZINE QUIZ
QUESTIONS 1. WHAT CAN A GOOD
PROPERTY MANAGER
DO FOR YOU?
a) find a good tenant
b) spot maintenance issues
c) give advice for getting
better rents
d) all of the above
2. WHAT CAN
INVESTORS DO TO
REDUCE THEIR TAX?
a) claim depreciation
b) file a PAYG variation
c) declare a tax strike and
not pay their taxes
d) both a and b
3. GAZUMPING IS
ENCOURAGED BY A
a) hot market
b) flat market
c) reduction in sales
d) busy mortgage broker
4. WHAT IS AN OFF THE
PLAN DEVELOPMENT?
a) an infrastructure project
in the CBD
b) a DIY project
c) a development which
hasn’t been built yet
d) both a and c
5. WHERE DO YOU
START SEARCHING FOR
GOOD INVESTMENT
PROPERTIES?
a) look for the 6 “Ds”
b) newspapers
c) real estate agents
d) all of the above
6. WHAT IS “BUYING
POWER”?
a) how much the banks will
lend you
b) how far your equity will
go towards costs
c) the ability to get
financing
d) a bank’s internal fee
calculator
7. HOW DO YOU
DETERMINE YOUR
GROSS YIELD?
a) purchase price plus
broker’s commission/100
b) annual rent/purchase
price x 100
c) purchase price/annual
rent x 100
d) an average of the
suburb’s yields
8. WHAT VERBIAGE IN
A MORTGAGE CAN STOP
YOU FROM BUYING
MORE PROPERTIES?
a) all monies clause
b) mortgage insurance
clause
c) late fee clause
d) both b and c
9. WHAT TYPE OF
PROPERTY WOULD
WORK BEST WITH
STRATA TITLING?
a) duplex
b) house and land
c) two level home
d) both a and c
10. WHICH TENANCY
WILL NOT GIVE
YOU RIGHTS OF
SURVIVORSHIP?
a) tenants in common
b) joint tenants
c) tenancy by the entirety
d) both b and c
5. 5
POSITIVE MAGAZINE QUIZ
QUIZSCORINGGUIDE
”EXPERT
INVESTOR”
10 POINTS
Wow look at you - you’ve
got this in the bag! You’ve
got what it takes to really
succeed at investing, but
why don’t we kick it up a
notch? Have you tried your
hand at more advanced
strategies such as strata
or a small development?
What about investing
through a joint venture?
There are countless ways
expert investors can boost
their portfolios significantly
and to keep what they’ve
worked so hard to gain.
Let our coaches give you
an edge in the marketplace
by showing you tips and
strategies you can use to not
only grow as an investor, but
to preserve your wealth both
now and into the future.
Find out more about our
Mentoring Program on page X
ANSWERS(DON’T PEEK IF YOU HAVE NOT TAKEN THE QUIZ YET)
Question1(d),question2(d),question3(a),qustion4(c),question5(d),question6(b),question7(b),question8(a),question9(a),question10(a).
“SEASONED
INVESTOR”
7 - 9 POINTS
Amazing - you’re really on
fire! You understand how to
spot a growth market but do
you know how to succeed in
property investing no matter
what the market is doing?
Our mentoring program can
help you do just that. When
you sit down with your
mentor you will go over the
goals you’ve set for yourself
- or perhaps set some new
goals and then begin to
execute your plans.
Got a question? How about
an idea? Want an opinion
about a certain market?
Your coach is just an email,
SMS, phone call or coffee
shop meeting away!
Find out more about our
Mentoring Program on page X
“AVERAGE
INVESTOR”
4 - 6 POINTS
Fantastic score! You’re
moving quickly towards
financial independence and
you know that education is
key to achieving your goals.
Rather than go it alone,
however, why not enlist the
aid of others who have been
where you’re at now?
A mentor can help you
stretch yourself beyond your
comfort zone where you can
achieve much more than you
may have thought possible!
Find out more about our
Mentoring Program on page X
“BEGINNER/
NEWBIE
INVESTOR”
1 - 4 POINTS
Congratulations! After
attending tonight’s seminar
you’re already well ahead of
other beginning investors.
Why not continue your great
start by taking advantage
of our mentoring program?
You’ll gain access to a world
of information vital to your
success.
You’ll also grow as an
investor as you learn tips and
strategies from successful
property coaches who will
work with you every step of
the way as you create wealth
through property investing.
Find out more about our
Mentoring Program on page X
6. 6
Look at what local investors
are doing. Are they buying in
their own backyard or are they
avoiding their local area - even
if it’s showing promising signs
of growth?
It’s not uncommon for local
investors to shun their own
location until they begin to
see out of state investors
move into the area.
2. IS THERE A RIPPLE
EFFECT HAPPENING?
Look at nearby locations. Are
they growing? Compare the
suburb you’re considering to
those nearby that are actively
growing.
If the suburbs are comparable
in terms of the market drivers,
amenities, then you can
expect your subdivision
may grow as well.
3. WHERE IS THE CURRENT
MARKET SENTIMENT?
Let’s be smart about this. To achieve the most gain from
a property hotspot you want to buy when few others are
aware of the opportunity.
If everyone knows their property is in a “hotspot”
location, you will pay more!
S
o how do you spot a
hotspot?
By studying the factors that
influence the market.
At its root, all of the market
drivers (infrastructure, popula-
tion, economics, demographics,
supply and demand and suburb
yield) are the result of people
and their actions.
1. WHAT ARE INCOMES
LIKE IN THE AREA?
Are incomes rising? One clue is
to look for growth in industries
that typically pay more, such as
tech, mining or medical.
Compare incomes to current
property prices. Can the salaries
support rent and/or property
value increases? In other words,
is the market equitable?
7. 7
4. WHAT ABOUT THE
MARKET DRIVERS?
POPULATION
Is the population growing?
Can the existing supply of
properties meet the demand?
How much land is available
for release? This factor can
have a big impact on property
values. Sydney, for example,
is constrained from greatly
expanding outward by its
mere geographical location.
INFRASTRUCTURE
Are there large infrastructure
spending projects either
planned or in the works?
For example: new hospitals,
universities, road works, public
transport or shopping?
Contact either the economic
development manager or town
planner of the local council for
this information.
ECONOMICS
Is there a diverse employer
base? Don’t invest in locations
with a single industry employer
- choose suburbs with a wide
variety of industries.
SUPPLY AND DEMAND
Is the population putting
pressure on the local supply
of property? The vacancy
rate for the suburb will give
you a good indication of
both demand and supply
for the area.
SUBURB YIELDS
What are the rental returns?
If they’re increasing then you
have a shortage of supply in
the area and a subsequently
increasing demand for more
accommodations.
DEMOGRAPHICS
Can the incomes of the local
residents afford the rents and
is there room for growth?
Are the majority of individuals
in their prime working age or
are they nearing retirement?
5. STUDY DIFFERENT
GENERATIONS - WHAT
THEY WANT AND WHERE
THEY WANT TO LIVE.
Look for signs that growth is
happening. Is the population
growing and if so, what is the
majority of the demographic?
For example, individuals
born between 1980 to 2000
- Generation Y - are typically
attracted by apartments situated
in an active location such as the
CBD or nearby suburbs.
This can also help you target
the right property type once
you’ve found a potential
hotspot.
6. STUDY THE FAMILY
MAKEUP OF THE
DEMOGRAPHIC.
Are the majority of individuals
living in the suburb either
established families, young
professionals - couples or
singles - or retirees? What
does the demographic want in
a home? Do they want to live
near every conceivable amenity
or do they want to spread out,
willing to embrace a longer
commute as a trade-off?
7. WHERE DOES IT LIE IN
THE PROPERTY CYCLE?
Where in the property cycle
is the suburb? For example,
if sentiment is low, even
though the suburb has seen
an increase in yields of at least
1% to 2% over the previous
5-year average, it’s possible the
market is leaving the bottom,
heading upwards.
If the market is anywhere
from 10 to 12 o’clock you’ll
see everyone talking about
the market, and it is generally
agreed it is a “hotspot”.
Ideally you would have
purchased earlier, when
sentiment was still very low/
non-existent, but you still may
find some good deals if you
search hard and choose the
right strategy. Be certain you
have a viable exit strategy
already in place to avoid getting
burned when the market cycle
starts to shift downward.
POSITIVE MAGAZINE HOW TO SPOT A HOT SPOT
Property
clock
At Positive Real Estate, we’re dedicated
to bringing our clients the best possible
deals in markets that are poised for capital
growth - markets which we ourselves
buy in personally as property investors.
To discover the great opportunities we’ve
found across the country, have a chat
with your Property Coach tonight.
If you prefer, our Investors Agency can be
reached at 1300 365 886 or alternatively by
email at info@positiverealestate.com.au.
We look forward to speaking with you soon!
8. 8
Sounds crazy, doesn’t it?
It may sound nuts, but with
some clever strategies and
strong financial discipline under
your belt, you certainly can pay
your home loan off faster than
you may have thought possible!
Look at the following example
of interest paid for a $300,000
mortgage:
As Graph A shows, if you pay
off this mortgage with a rate
of 6.85% over the full 25-
year term, you will be paying
$718,000.00 - more than
double the initial loan amount!
That’s $327,516 just in interest
repayments! Save $212,302.80
by paying your home off in 10
years instead of 25, the huge
saving is illustrated in Graph B.
PAYYOURHOMEOFF
FAST
Don’t want to
be paying off
your home for
the next 10, 20
or 30 years?
What if you
could reduce
your home
loan faster?
Overthefull
25-yearterm,
youwillbe
payingmore
thandouble
theinitial
loanamount!
9. 9
Here’s how you do it:
MANAGE
YOUR MONEY
BUDGET YOUR FINANCES
No discussion about finance can leave
out the topic of budgeting. If you don’t
have a plan for your money it will find
a way to simply vanish from sight... and
quickly!
CUT EXPENSES
Give yourself an immediate pay raise
by cutting expenses and use the
savings towards paying off your home
loan. Eliminate “extras” like pay TV
(stream movies or watch DVDs instead),
switch to a cheaper data/cell plan, etc.
BE CREATIVE
Remember that every dollar counts!
Add up what you’ve spent this last
month on “treats” and you’ll see what
I mean!
SWITCH TO WEEKLY/
FORTNIGHTLY REPAYMENTS
Pay your mortgage weekly or
fortnightly rather than monthly. As
mortgage interest is calculated on a
daily basis you’ll pay less interest and
the money that would have gone to
interest go to reducing your principal
and paying your loan off sooner!
MAKE EXTRA REPAYMENTS
The more payments you make towards
the principal the faster you can pay
down your loan. Easily and efficiently
reduce your loan by using the redraw
or offset facility tied to your loan to
manage the extra payments.
ALIGN YOUR SALARY AND HOME
LOAN REPAYMENTS
Despite our best intentions, money
often has a way of slipping through our
fingers. Avoid the risk of spending your
extra repayments and set up your loan
repayment period to match your salary
payment date. This will maximise the
amount you have available to pay
towards your home loan.
PUT YOUR SALARY INTO
AN OFFSET ACCOUNT
Have your salary put straight
into your offset account!
If you don’t already have one, speak
with your financial advisor about getting
one. As an “all-in-one loan account”
you can pay your salary directly against
your loan, which reduces the principal
and subsequently the interest that is
charged against it.
Remember... a lower principal balance
results in less interest charged - and a
faster payoff!
PAY INTEREST ONLY
Yes, interest only... you’ll soon see why!
So let’s say you pay $2,000 per month
on your mortgage. Have your advisor
structure the mortgage so that $1700
of that payment goes towards your
mortgage interest and the $300 sits
there in your redraw or offset account.
How does this help you?
The money sitting in your account will be
earning interest, reducing the balance
of your loan because it “offsets” your
mortgage balance. But this is not all...
you can add more money to your
account, further shrinking your loan!
BE CONSISTENT
When interest rates fall keep your
repayments the same. This is a simple
way to slash your debt!
We’re not done yet. This is where we
get to the part about paying off your
mortgage.
BUY INVESTMENT
PROPERTIES
Don’t turn the page! This works,
honest... hundreds of our clients have
done this very thing! Using some of the
equity in your home, purchase some
investment property(ies). Pop the rent
into your offset account and boom -
down goes your loan balance!
Claim your tax benefits weekly,
fortnightly, however you wish and put
those monies into your account - after
all, why should the ATO have benefit of
your money all year?
If any extra money falls into your lap,
then toss it into your offset account.
You don’t have to wait until you have
your entire mortgage amount in your
offset account. Make a partial payment
with the funds from your offset, further
shrinking the principal and interest!
Increase your returns by adding value
to your investment properties through
renovation and/or subdivision, strata,
etc. When the timing is right sell one or
more investments and use the funds to
pay your home loan down (or off).
Each of these strategies works
well by themselves, but when
you combine them all you really
supercharge your loan payoff!
Book a COMPLIMENTARY
CONSULTATION with your Coach
now and find out how having the
right property investments can
build your wealth and pay your
home off in record time!
POSITIVE MAGAZINE PAY YOUR HOME OFF FAST
BELOW
Remember to book
your complimentary
consultation with
our expert team
www.positiverealestate.com.au/lmp
10. 10
Property investors have many
deductions they can claim
to reduce their tax liability.
Following are just some of
those deductions:
INTEREST AND
BORROWING EXPENSES
Expenses surrounding your
investment property purchases
such as interest payments and
accounting fees can be claimed,
reducing the tax you owe.
REPAIRS AND
MAINTENANCE
Maintenance and repairs of
your investment property can
be deducted as long as they
were incurred as a result of
leasing the property.
AGENT AND BODY
CORPORATE FEES
Tenant advertising costs as well
as a property agent’s fees and
commissions can be deducted
from your tax liability. So too
can body corporate fees.
INSURANCE
Insurance costs covering
your investment property’s
contents, the structure itself
and public liability insurance
costs can all be deducted from
your tax bill.
RATES
Council and water rates can be
claimed on your tax return too.
TRAVEL EXPENSES
Travel costs associated with
inspecting and/or maintaining
your investment properties are
deductible from your taxes.
Whether you travel by air or
by car you can deduct your
expenses - and if your proper-
ty is in another state and you
have to stay overnight you can
deduct your meals and hotel
fees as well.
DEPRECIATION SCHEDULE
We all experience wear and
tear as we get older - so do our
investment properties! Hire
a quantity surveyor to do a
depreciation schedule for your
properties. The schedule puts a
dollar amount on that wear and
tear - often totalling in the thou-
sands! You won’t likely have this
expense every year (unless you
do major improvements) as the
schedules are good for about
20 years on average.
There are two types of depre-
ciation: capital works and plant
and equipment.
Capital Works Deductions
An example of a capital works
deduction would be the build-
ing costs of the original struc-
ture as well as improvements.
Note that even though you
cannot claim capital works on
properties built prior to 1985,
you can still claim plant and
equipment depreciation.
Plant and Equipment
Deductions
This covers household items
such as AC units, blinds,
carpeting, etc.
PAYG VARIATION
If you’re a PAYG earner, file
a PAYG variation with your
employer. When you file the
variation, your employer will
take out less tax, leaving
you with more each pay day
which you can use to fund an
investment property purchase,
add to your buffers, pay off
an existing mortgage, go on
holiday... whatever you choose.
INVESTMENT
PROPERTIES
Yes, owning investment
properties can help you slash
your tax bill. Amazing, isn’t it?
Take a look at the following
graphic. Looks like Adam has
some catching up to do, right?
So you want to reduce your taxes? Who doesn’t?
But rather than sport a new pair of metal
bracelets (courtesy of the ATO) take advantage
of the many legal methods of reducing your tax!
REDUCEYOUR
TAXESLEGALLY!
NOTE
All tax calculations
done by a CPA
accountant.
As you can see, the expenses surrounding
Eve’s investment properties significantly
reduced her tax liability.
Combine the tax cutting strategy with
any capital growth her portfolio might
have gained and she’s well on her way
to financial freedom.
11. 11
POSITIVE MAGAZINE BIANCA & MATTHEW’S STORY
HOW BIANCA AND MATTHEW
BOUGHT 4 PROPERTIES IN 5 MONTHS
AND ONLY PAID $1000 INCOME TAX!
On a combined income
of just $80,000p.a., Bianca
and Matthew overcame
their fear of debt and now
hold a property portfolio
worth almost $2 million!
They bought their first home at the
tender age of 18 and had paid the
$150,000 home loan off within five
years. “I thought I would feel different
after having no mortgage but I didn’t.”
Bianca explained. “We still have to go to
work every day.”
Frustrated, and not wanting to work
full-time for the rest of her life, Bianca
looked into investing in property and
shares. In 2011, Bianca and Matthew made
the decision to purchase an investment
property in Devonport, Tasmania.
It didn’t perform as well as they’d
hoped. With two properties in Tasmania,
Bianca realised she needed to diversify
her investments. She wanted to invest
in other states of Australia but had no
idea where to begin.
One night, while at her mother-in-law’s
house, Bianca stumbled across an article
in the newspaper about a free Property
Investor Night in her local town. The
event was the following night.
“It was like it was meant to be!” Bianca
exclaimed. She and Matthew signed
up right away, and turned up eager to
learn how property could provide an
extra income.
The free Property Investor Night
revealed one thing:
“We needed to educate ourselves.”
Bianca said. “There was more to it than
just buying any old property.” They joined
the Lifetime Mentoring Program, and
armed with their new education, set out
on their mission to create an income with
property and reduce their working hours.
With the equity for their first home,
Bianca and Matthew bought four
properties in just five months – on a
combined income of $80,000 per year.
With a promising portfolio in such a
short amount of time, Bianca has taken
a step back to pay down their loans,
so they can comfortably invest again
further down the track.
“You need to look at your portfolio
regularly, as things change, and your
strategy may need to change.”
TAX REDUCTION
“Reducing tax was one of our goals but
not a main focus,” Bianca said. “We don’t
pay much tax, but we are not complaining
that we get most of it back!”
Last financial year, Bianca and Matthew
earned $127,000 (salaries and rental
income combined) and only paid $1000
in tax – completely legally.
“Our first property, Bunbury, was 40 years
old but had been renovated so there was
still some depreciation to claim.” Bianca
explained. “Toowoomba, being a newly
built house and land package, also had
great depreciation benefits.”
With such great returns from their tax,
Bianca and Matthew are able to pay
down their loans so they can move
forward with their investment journey.
“Yes, sounds very boring, I know.”
Bianca states. “But I am very focused on
achieving our goals.”
Bianca and Matthew have achieved so
much in a short period, and are well
on their way to being able to scale
back from their jobs and achieve their
dreams of working part-time – maybe
even retiring altogether. “We couldn’t
have achieved this without the support
of Positive Real Estate - especially when
I hate debt and it was terrifying to take
on so much! You just keep reminding
yourself of the end goal and keep
educating yourself.”
Find out how you can start to take
proactive steps towards paying less tax
and investing your money directly into
your property portfolio. It doesn’t take
a lot to get started - just an interest in
changing your future. Take the first step
by booking in a complimentary one on
one appointment with an expert Coach
in your area, where you will learn smart
money management strategies, which
can help you, among other things, cut
your taxes.
GO TO:
www.positiverealestate.com.au/lmp/
Location Purchase Price Current Value Rent
Spreyton, TAS $264,000 $430,000 PPOR
Devonport, TAS $150,000 $220,000 $250pw
Bunbury, WA $225,000 $240,0000 $285pw
Toowoomba,QLD $399,750 $440,000 $400pw
Newcastle, NSW $315,950 TBA Under construction
Teneriffe, QLD $424,000 est. 480k - 520k Under construction
12. 12
INVESTING POSITIVE MAGAZINE
Paul is 42 years of age and
Anna is 38. They have 2 kids
under the age of 10 and live in
Western Sydney.
Their financial situation looks
like the following:
Paul
Employed full time
earning $81,000 PA
Anna
Employed part time
earning $30,000 PA
CURRENT ASSETS
PPOR in Western Sydney valued
at $590,000 with a current
mortgage of $285,000.
Investment Properties: 0.
Savings: $8000 in the bank and
depositing $500 extra each month
Superannuation: Combined
balance of $150,000
CURRENT LIABILITIES
Personal Loans: $38,000 for
2 cars
Credit Cards: 2 with a
combined limit of $15,000,
completely paid off each month.
PAUL AND ANNA’S GOALS:
1. Paul and Anna don’t want to rely
on their superannuation for their
retirement, as it wasn’t performing
the way they needed it to.
2. Paul does not enjoy his job
and doesn’t want to have to work
until 70. He would like to create
a passive income within 11 years,
when his kids finish school.
Paul will then be 53 years old.
3. They are paying the
maximum amount of tax at this
point and want to reduce this
with legal deductions.
4. Anna wants to eliminate the
debt on their home over the
next 7-10 years.
5. They want to take an annual
overseasfamilyholidayfor2weeks.
6. They are concerned how
their two children are going to
get into the property market
when they hit their 20s and
want to assist them with their
first property purchase.
Paul and Anna’s buying
power was $1.1million and
serviceability was $1.2
million meaning we could
move forward on a relatively
balanced strategy.
Based on Paul and Anna’s goals
and financial information, the
following properties would make
great foundational properties
for their investment portfolio.
YEAR ONE
PROPERTY ONE:
Location: Liverpool Sydney
• 3 Bed, 2 Bath, 2 Car
• $412,000pp May 2014
• Recent sales in the building
for similar product up to
$495,000
• 5.5% gross rental
• Estimated $40k equity gain
in under 6 months
HOWTOSTARTOUT
INVESTING
If you want to get started investing, you need a
plan. To make a plan, you need to set goals.
Meet Paul and Anna*
GOAL #1
Replace Paul’s
current income with
a passive income of
$81,000.
Deadline: 11 years.
GOAL #2
Create $15,000 per
annum in savings/
profit to take a
holiday.
Deadline:
immediately
GOAL #3
Reduce debt
of $285,000.
Deadline:
7-10 years.
GOAL #4
Eliminate tax.
Deadline:
5 years.
GOAL #5
Gift $100,000 to
their kids when
they turn 21.
Deadline:
13 years
SERVICEABILITY
This is the maximum
amount a lender
is willing to lend
you based on your
situation, income
and expenses.
BUYING POWER
This is the maximum
amount of real es-
tate you can afford
to buy, based on
how much cash or
equity you have for
your deposits.
*Real names have been changed for privacy reasons.
13. 13
POSITIVE MAGAZINE FINANCIAL SERVICES
GEORGE NORI, Managing Director of PFS, and his team have
helped thousands of Positive Real Estate, SMSF clients and
others achieve financial freedom by securing the best possible
loan for their individual goals and needs.
In addition to the Pay Your Home Loan Off Sooner Program,
Positive Financial Services provide the following services:
a FREE HOME VALUATION
a FREE FINANCIAL HEALTH CHECK
No strings. No commitment.
Just information you can use to understand your true financial
position.
As a client of Positive Financial services you can expect to:
SAVE TIME
PFS does all of the financial legwork for you.
SAVE MONEY
You pay nothing for the services you get - the lender pays the broker.
Avoid any hidden penalties, fees and other charges.
Avoid getting a loan that interferes with your buying capacity
and hinders your serviceability.
GET FINANCING RIGHT FROM THE START
Just because a deal is cheap, that doesn’t mean it’s the right
one for you. A review of your current lifestyle and your wealth
creation plans will determine the loan program that will help
you to continue growing your property portfolio.
HAVE CHOICES
Positive Financial Services deals with a diverse number of
Lenders, with a wide range of loan programs and features that
suit your individual situation.
Book a meeting with a Positive Financial
Services representative now!
positivefinancialservices.com.au/connect/free-valuation/
(02) 8004 2222
Credit Representative Number: 388095 AB: 22140317773
POSITIVE
FINANCIAL
SERVICES
As a fully accredited mortgage brokerage,
Positive Financial Services is the first
place many investors stop when looking
for finance information and assistance.
PROPERTY TWO:
Location: Hidden Waters Fletcher (Mirvac Estate)
• Property type - House: 4 Bed, 2 Bath, 2 Car
• Purchase date: March 2014
• Settlement date/rented date: October 2014
• Price: $475,000
• Rental return: $490-$500 (5.4%)
• Equity gain estimate: $495,000 ($20,000)
YEAR TWO
PROPERTY THREE:
Location: North Brisbane
• Dual Income H&L package specialised for
maximising investment returns
• Package price $495,000
• Combined rental at completion $650pw, which
shows a 6.8% gross return
• Positive Cash flow $5,600+ in year 1 after taxation
This portfolio will give Paul and Anna the base
portfolio they need to achieve their goals, while still
putting aside $15,000 every year for their family holiday.
It is possible, and you can do this too. Strategy is
everything. Knowledge of the markets, how to do
exceptional due diligence, and getting involved with
a team to support you will always lead to success.
If you need help setting an individualised strategy,
book a meeting with one of our Coaches. They’ll help
you set you an investment plan based on your goals and
financial position.
14.
15. 15
GIVING
BACK
Education
is extremely
powerful.
We often take
it for granted
that Australian
children,
regardless of
gender, have the
right to education.
H
owever, across the
globe, 774.5 million
people cannot read
and write. This prevents them
from voting, checking the
labels on medicine bottles,
and filling out employment
applications. Over 516 million
are female.
Education is widely
acknowledged as the best
way to tackle world poverty.
Women that complete their
high school education earn
more, have healthier families
and pass along their education
to the next generation.
Positive Real Estate has
partnered with Room to Read
with the common belief that
World Change Starts with
Educated Children.
Room to Read is a global
organisation dedicated to
promoting and enabling
education through programs
focused on literacy and
gender equality in education.
They achieve this goal by
establishing schools and
libraries, publishing local-
language children’s books,
training teachers on literacy
education and supporting
girls to complete secondary
school with the life skills
necessary to succeed beyond
the classroom.
Since their partnership began
in 2010, Positive Real Estate
has contributed more than
$324,000 to Room to Read’s
school construction programs,
building seven schools and
impacting the lives of over
2,000 children, and thousands
more as years go by.
Imagine a world in which
every child has access to an
education. Positive Real Estate
and Room to Read are doing
their best to make this dream
a reality, one child at a time.
Positive Real Estate
has contributed
more than $324,000
to Room to Read’s
school construction
programs.
POSITIVE MAGAZINE GIVING BACK
7SCHOOLS
$324,000RAISED
2,000KIDS WITH ACCESS
TO EDUCATION
SCHOOLS IN
LAOS, NEPAL
AND SRI LANKA
15
18. 18
OUR CLIENTS POSITIVE MAGAZINE
ADAM SMITH
We were working to pay our house off
with no real direction for our future.
We knew we wanted to invest in
something but we had heard so many
horror stories where people have
failed and had to start over again; and
never invested again as they were too
scared to lose their savings yet again.
I’d been looking and reading about
Positive Real Estate (PRE) for a few years,
we are very sceptical about people
ripping you off as it seems to be a
common theme our days… but it was
soon realised when joining PRE that this
wasn’t the case.
Amazingly, our Coach is an absolute
gem; she has been and always will
be great help and our mentor! She is
very supportive especially the way
she approaches and works through
our ideas/goals. Kerry, along with
the PRE team, has changed our lives
forever. The main thing has been the
confidence and tools we have gained
to be able to move forward and feel
comfortable about decisions we
might make. PRE gives you valuable
information about how the property
market can be manipulated (legally, of
course!) and it gives you confidence.
We have made some good cash flow
from one of our past properties after
leasing it for one year. Part of the cash
has been put aside for another property
in the near future, and the other part
purchased our dream car: a 67-fastback
mustang. All of this in 18 months!
We are so glad we joined the program,
we would not have done or gained
what we have today without it.
MARITA
AND REX BISHOP
We had always wanted to be involved
in property but we didn’t have the
education or confidence to go ahead
with it. It is terrifying to risk all you
have worked for when you don’t have
the confidence in your ability. We have
just about to hit our 50s so if we were
going to do something, it had to be now.
We saw an ad for Positive Real Estate
(PRE) in the newspaper and decided
to have a look. This was the first time
it had been explained to us in a way
that we could understand and see
ourselves being able to achieve.
We did some ‘homework’ and
researched the company. We joined
PRE in July 2012 and have never
looked back.
Once we were ready, PRE were there
every step of the way to assist with
anything you may have needed help
with. They didn’t do all the work for us;
they lead us through the procedures
and gave us the confidence to get
going. After we purchased our first town
house in St Marys, NSW, we needed to
up our wages, which meant that I had
to find a job. I thought that might be a
bit hard at 50 but as Rex is a bus driver,
I decided if he can do it, I can too.
They employed me!! We have since
purchased a townhouse in Toowoomba
Qld, which was bought through our
Super. We are in the final process of
buying a townhouse in Balga, WA, and
we simply cannot believe that we have a
portfolio! Once this property settles, we
will be able to access the equity from
our first purchase and start looking for
another one.
Our lives have changed so much. We
are continually educating ourselves
about the industry that we are now
a part of, and PRE has made it all
happen! Without them, we would
still be wondering what was going
to happen when we retired. We can
now feel confident and safe in the
knowledge that when we retire, we
can enjoy every minute of it (and keep
investing). Not bad for a couple of bus
drivers from Tassie.
LEFT
Adam Smith,
his family and
his dream car.
OURCLIENT’S
REALLIFERESULTS
BELOW
Marita and husband Rex Bishop.
19. 19
PHIL AND CORRINE
The Lifetime Mentoring Program is all
about support. You work really closely
with your mentor as well as having
access to a team of other people put
in place by Positive Real Estate (PRE).
Your mentor’s there to guide and
assist you through the whole “buying a
property process”.
The Buyers Agency is another huge
benefit of the program. If you don’t
want to go out and find properties
yourself, your mentor and property
consultant will help you find a
property to meet your specific
strategy. The PRE acquisitions team
source a wide range of properties
from around Australia. All are very
thoroughly researched and only the
best are offered to mentoring clients.
There’s also the monthly mentoring
meetings where you gain lots of
information from guest speakers
on a whole range of property and
finance related topics. It’s also a
time to meet with other like-minded
investors to share your stories and
listen and be encouraged by their
stories. We have made some new
friends in the process too.
Two years into the program we’ve
really only begun our property
investing journey but we can now see
a secure financial future in retirement
– one that doesn’t involve worrying
about having too little superannuation
or having to rely on a government
pension. We’ve also seen the benefits
of restructuring our finances and
making our money work for us. Yes
there’s a lot of work involved but it’s
worth the effort when you’re investing
in your own future.
ANITA AND GEORGE OZE
In early August 2013, I went to a
free seminar held by Positive Real
Estate in Cronulla. It was here that I
met our property investment coach.
I felt an instant liking to her and how
she explained how the market was in
Australia. She did not have the ego and
attitude that many presenters I saw
before had. She was also genuinely
interested and confident in our
situation that she could help us move
forward in the investing future we
wanted.
The team is experienced and genuinely
helpful to assist with whatever strategy
you choose. I worked with one of their
experienced brokers Andrew, who
found ways to present our financial
situation to the banks in a more
favourable way.
But what I appreciate most is my
Coach’s wonderful support, guidance
and knowledge to help me learn how
to buy property on my own. She would
challenge my old way of thinking,
point out things I had to check and
ask before considering purchasing
and praise my efforts. With no family
and friends to talk about property
investing, her support and friendship
has been paramount in my confidence
and determination to keep investing.
All this was possible, through the
guidance and support of our Coach,
a great broker who refinanced our
home loan and found us loans with
more suitable lenders and a fantastic
and dedicated team.
We have also, set up a self-managed
superannuation fund with The SMSF
Club who works together with PRE.
We did this with only $50,000, but
already looking to increase returns
greater than industry funds.
We are extremely excited about
where the Australian property market
is moving at the moment. It doesn’t
matter how much money you have
to invest, as there is always a good
opportunity somewhere. I didn’t
understand or know this 12 months
ago. George and I are so happy we
have made the decisions we have,
learnt to spend money more freely
to buy what we need and build
friendships with a wonderful group
of like-minded people.
Phil and Corrine.
BELOW
Anita and George Oze.
But what I appreciate most is my
Coach’s wonderful support, guidance
and knowledge to help me learn how
to buy property on my own.
20. PASSIVEINCOME
EQUALSEARLY
RETIREMENT
20
POSITIVE MAGAZINE PASSIVE INCOME
Would you like to kiss your job
goodbye and begin living life
on your terms? Passive income
is key to an early retirement
and property investing can
help you get there.
Although the execution can be tricky,
the concept is really quite simple. You
buy profitable properties, pay them
off and then enjoy the passive income
they provide.
Here’s an example:
John has been buying properties
over the last 10 years and now has 6
properties in all, totalling $2.1 million
dollars in value. This breaks down
to $350,000 each. He owes nothing
on these properties, and he receives
$140,000 in passive rental income
each year!
This isn’t even considering capital
growth. The increase in value and
subsequent rental increases can push
this number even higher!
It may seem insane to say that John
purchased 6 properties in 10 years,
but it is actually very doable - if you
structure your portfolio correctly from
the start.
HOW TO GET STARTED
The plan you’ll need to put in place to
retire early is the same one you’d be
using to plan a “normal” retirement,
you’re just speeding things up a bit!
SET YOUR GOALS
Begin by setting your goals. How much
will you need to live comfortably for
your expected lifespan? Now how are
you going to reach that number?
You will need to buy (or create)
positive cash flow and capital growth
properties. A positive cash flow
property puts money into your pocket
before tax. All expenses are covered
by the rent and there’s still money left
over. You can create a positive cash
flow property from one negatively
geared by using subdivision, cosmetic
renovation, paying down your debt or
many other strategies! Capital growth
properties and investments that you
expect to grow in value – if you turn
to page 5 you’ll discover how to find
them!
CLEAN UP YOUR FINANCES
Before you can really get started you’ve
got to be sure that your finances are in
order. To achieve any level of success
you’ve got to know your financial
situation and optimise it for the best
results:
• If you don’t have a budget, make one
• Pay off your debts - both good and bad
For tips on how to pay off your home
loan (bad debt) faster, see page 8.
Using your paycheck, rental income
and tax savings you can grow the
balance in your account even faster.
COMBINE POSITIVE
CASH FLOW AND CAPITAL
GROWTH PROPERTIES
All around Australia, rental returns
are so high that after interest and
outgoing expenses are deducted, there
is still surplus cash flow! Investment
properties are an excellent source of a
second income.
Here’s an example:
You’ve purchased a $250,000 property
that rents for $500 per week. This is
a 10% return. If your interest rate is
fixed at 5%, you’ll have a surplus yield
of 5% after interest is deducted. This
leads to $5,000 in positive cash flow
per annum.
If you’re looking at properties in a
lower price range, you can use bump-
up strategies (such as renovation) to
add value and reap similar returns. You
may have to purchase ten positive cash
flow properties to have an overall cash
flow of $50,000.
Alternatively, you could use the equity
from your capital growth properties
to provide your second income. In a
rising market, a $300,000 property
can grow an extra $50,000 in 12 to
18 months. For a passive income of
$140,000 per year, you’ll need three to
five investment properties in markets
set to boom. You’ll have to migrate this
money every few years (withdrawing
the equity to purchase an investment in
another rising market) to consistently
get these kinds of gains.
We can show you how to replace your income with
property by using these strategies and much more.
Want to quit working sooner? Speak with one of
our Property Coaches to find out more.
www.positiverealestate.com.au/info/what-can-i-do-now/
21. 21
POSITIVE MAGAZINE SMSF
The sad reality is that a $500,000
superannuation nest egg will not provide a
comfortable retirement for most Australians.
In fact, most of the nation’s super will hardly
sustain them for two years! According to
the Association of Super Fund Research, a
couple will need around $55,000 per annum
for a comfortable lifestyle during retirement.
This means you will need approximately
$500K if you are entitled to the full retirement
pension and if you are self-funded, you will
need around one million dollars in your super
fund to generate this kind of money.
Sound scary? Absolutely! Especially if
retirement is only a few years away.
Recently it was found that women aged
55 to 64 years were estimated to have an
average superannuation balance of only
$54,500, with average male superannuation
balances at just $113,200, (source:
University of Canberra’s NATSEM unit)..
RETIREMENT CAN BE SCARY WITHOUT
THE RIGHT PLAN
The good news is it is very possible to retire
in a position where you can have the savings
you need to live, without depending upon
a government pension or allowances. How?
Property investing. Whether your retirement
is two or ten years away, there are some
excellent benefits associated with investing
in property using your super, which is
where we come in. Our specialist team in
SMSF planning with property can help you
fast track your retirement plan and start
investing strategically in property using your
super for a secure and wealthy retirement.
WHAT ARE THE KEY BENEFITS OF
INVESTING IN PROPERTY USING YOUR
SMSF;
1. You can borrow up to 80% of the property
value and have the remainder funded from
your superannuation.
2. As the laws stand today, you pay zero capital
gains tax and ZERO income tax on rent
once in retirement.*
3. A clever way to reduce taxes: Pay down your
property using your compulsory super
contributions and any salary sacrificed funds
will potentially only attract a 15% tax rate –
instead of up to 46.5%.
4. Fund your next investment property without
using any personal income.
RISKS OF BUYING PROPERTY USING
YOUR SMSF;
While a property investment within your SMSF
offers many benefits, there are many other
factors that you need to consider to determine
whether such an investment is appropriate.
There are costs associated with buying and
holding an investment property, liquidity
constraints, and other risks that all need to
be identified and considered prior to making
the big leap into direct property ownership.
1. The risks of buying property in SMSF are
magnified when entering into any form of
borrowing arrangement.
2. While history has shown that property prices
appreciate in value overtime, this is not
always the case. Property prices do fall in
value and real estate is considered as a high
growth/ high risk asset class. For this reason,
it is critical to employ a team of experts to
ensure that direct property is suitable for your
circumstances, and to help you identify the
key risks associated.
3. Please seek independent advice to determine
whether investing in property is suitable for
your circumstances.
*certain conditions apply
Contact the SMSF Club expert
in your area by booking in a
complimentary one-on-one
appointment here
admin@thesmsfclub.com.au
THESMSFCLUB
The thought of retirement is often associated with relaxed
long days of reading, travelling, time with friends and
family, giving back, and a secure and happy life. A reward for
all of your hard years of work.
CASE STUDY
Invested in 2
Properties in her
SMSF in 6 Months
Positive Real Estate client,
Susan Flux had dreamed
about property for years
but had been held back
from purchasing by her
own fear. At 53 she has
finally taken the plunge
and has subsequently
bought two properties
within just six months in
her SMSF.
“I was brought up with a
strong belief that you pay
for everything outright –
you have the money and
pay for it straight away,
rather than borrowing,”
she says, explaining that
this perspective made the
idea of taking on multiple
mortgages a difficult one
to swallow.
Susan today is a changed
woman and has reignited
her passion in property
and belief in herself.
She explains, “It’s partly
about being able to fund
my lifestyle when I can
no longer be in an office
working for an employer.”
And with so many
opportunities Australia-
wide, she doesn’t see any
reason to stop buying
just yet.
Disclaimer: The SMSF Club (A.B.N 72 162 328 501) is a Corporate Authorised Representative of RM Capital Pty Ltd (‘RM Capital’) ABN 74 065 412 820, AFS
License No 221938. As a Corporate Authorised Representative of RM Capital Pty Ltd, the SMSF Club and its representatives are authorised to provide General
Advice only. General advice is advice which is provided without regard to a clients individual objectives, financial situation or needs. It is not specific advice
for any particular investor and it is not intended to be passed on or relied upon by any person. Before making any decision about the general advice provided,
clients should consider the appropriateness of the general advice presented, having regard to their personal objectives, financial situation and needs.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37. 37
NOTES
Start building your property portfolio now!
Book a free strategy session with your Coach:
www.positiverealestate.com.au/lmp
