API-09 - April/May 1999

COVER STORY - ADDING VALUE

Why wait for capital gains? Many investors around Australia are taking a more proactive approach to building equity by renovating/altering their properties. In some cases they’ve added upwards of $80-$90,000 to their property’s value! Even minor cosmetic work can add thousands of dollars to your bottom line - IF you know what to do. In this comprehensive series of articles and interviews with experts, we’ll show you how to carefully plan and execute renovation/alteration projects with an eye to maximising your profits.

ALSO IN THIS ISSUE...

AUSTRALIA'S FASTEST APPRECIATING SUBURBS!

Median house prices by suburb/LGA for Dec Qtr. 98... and % change from the same quarter last year (for NSW, Vic, Qld, SA and WA.)

Buy right - identify the hottest suburbs in YOUR city!

CASE STUDIES

How the winners do it... Australia's most successful property investors share their secrets and strategies.

    * SAM NORRIS and SALLY COUTH - Melbourne’s Sam Norris and Sallie Couth don’t shy away from heavy renovation projects. In fact, they seek them out... they’ve developed an impressive talent for visualising the potential in properties that most people, on first glance, would regard as ready for the wrecking ball. And their strict attention to budgeting and cost estimation allows them to turn a tidy profit for their efforts.

    * SHANE THOMPSON - Architect Shane Thompson is an expert in the fine art of creating beautiful - and very valuable - homes with inexpensive materials. He replaces high-cost materials and renovating techniques with clever, thoughtful designs that maximise the property’s existing potential while staying strictly within budget.

    * WES HOUK - A strong proponent of positive gearing through small private syndicates, Wes Houk shares his experiences with managed units in large resort-style complexes in Queensland. He and several friends formed a small syndicate to acquire such a unit, using a substantial deposit to minimise ongoing cash requirements. Now, two years later, he looks at the performance of his investment... and the results are impressive. The syndicate structure has provided some unique advantages and the unit is a joy for all the owners.

REGULAR FEATURES

BRICKS AND MORTAR WITH GRAHAM AIREY (Readers' Forum)

Graham Airey, author of The Property Investor's Handbook, answers your questions about property investment. In this issue, topics include the need to take out insurance after exchanging contracts, the difference between home equity loans and equity overdrafts, and the need to balance reasonable loan repayments with lifestyle requirements.

SOLICITOR'S COMMENT

David Atkinson looks at the issue of Ôbest efforts’ to obtain finance. Many property contracts include a Ôsubject to finance’ clause which can permit the buyer to avoid the contract if finance approval is not obtained. However, even after finance has been - or should have been approvedÊ- buyers sometimes attempt to use this clause to exit the contract, which can lead to litigation.

ACCOUNTANT'S COMMENT

Just what constitutes the Ôcost base’ of an asset for purposes of assessing Capital Gains Tax? Peter Dawkins highlights the importance of carefully analysing the cost base of an asset to minimise capital gains tax liability on its disposal.

SMART INVESTING WITH JAN SOMERS

Jan looks at the concept of Ôgood debt’ as opposed to Ôbad debt.’ Many people fail to realise the difference, but when used to purchase appreciating assets, debt can be a powerful investment tool... just as it can be a hindrance to wealth-building when used to purchase consumables or depreciating assets. She provides two fascinating case studies of investors who have achieved success in their property investments by strategic use of debt.

SPECIAL FEATURES

ARCHITECT'S CASEBOOK

Architect Shane Thompson shares his successful strategies for profitable renovating, including three inspiring case studies from his files. You’ll see how his skills in using inexpensive materials have been use to good effect, dramatically increasing the value of these properties for a fraction of the cost of an Ôopen chequebook’ renovation.

STRONG GROWTH CONTINUES ON QUEENSLAND'S SUNSHINE COAST

The Sunshine Coast has long been a mecca for buyers seeking a trendy Ôcafe society’ lifestyle and beachside ambiance... and investors are attracted by the prospects for capital gains afforded by the finite supply of waterfront property. However, prospects for strong returns can range from excellent to poor even within the same shire and investors would do well to study the options carefully before investing.

SPECIAL REPORT

PRIVATE MORTGAGE INVESTMENTS

While continuing low interest rates are a gold mine for property owners, they can be a real problem for people who depend on investment interest for their income. In the search for higher returns, many people (such as retirees) are turning to private mortgage schemes offering much higher interest payments secured by first mortgages. While these are a legitimate investment and borrowing option, some investors have lost thousands of dollars when their investments went sour. In this comprehensive report we’ll show you what can go wrong and how to evaluate first mortgage schemes to protect your hard-earned capital.

PROPERTY NEWS AND STATISTICS FROM AROUND THE COUNTRY

    * NEW SOUTH WALES / ACT The year ahead... and beyond. Research firm Residex’ predictions as to capital growth rates around Sydney have proven quite accurate in the past. Now they predict what investors can expect up to the year 2004... as well as profiling Sydney’s current top ten performing suburbs over the last year in terms of capital growth and rental returns.

    * Sydney: Median house/unit prices and capital growth rates by suburb, December Quarter 1998

      VICTORIA

    * From suburban sprawl to urban squeeze - Monique Wakelin examines the demographic shifts that are changing the face of Melbourne’s residential property markets, offering advice to investors on how to take advantage of the trends.

    * Residential property forcast 1999 - GST no setback to robust market. Despite its imminent appearance in the nation’s economic arena, real estate agents Jellig Craig predict that the GST will have minimal effect on Melbourne’s inner suburban housing market.

    * Melbourne: Median house prices and capital growth rates by suburb, December Quarter 1998

      QUEENSLAND

    * Brisbane’s river proving to be a key to values - Many suburbs likely to show strong capital growth are influenced by proximity to water, including the Brisbane River and Moreton Bay

    * Michael Matusik: Gold Coast well positioned for a period of strong growth, with unit supply lowest in a decade

    * Foreign investment defies Asian crisis - PRD Research identifies the countries most involved in Queensland’s property markets

    * Brisbane: Median house prices and capital growth rates by suburb, December Quarter 1998

      WESTERN AUSTRALIA

    * Looking for niche markets in Perth

    * Property study attacks myth about the impact of inflation on property investment

    * Late year revival pulls housing out of slump

    * Median weekly rent up 6.9% on last year

    * Perth: Median house prices and capital growth rates, December Quarter 1998

      SOUTH AUSTRALIA

    * Coastline the key to SA prices

    * Adelaide: Median house prices and capital growth rates, December Quarter 1998

This is only a sample of this issue's contents... don't miss it!