25 June 2018
Many investors steer clear of vacant land because they mistakenly believe they can’t claim interest repayments on it.
In fact, the biggest thing that most accountants get wrong when advising clients on vacant land is that the interest component on it isn’t tax deductible.
I’ve had many arguments with many accountants about this topic over the years!
The key component is the clear intent to build a property within a reasonable timeframe. If the investor was audited, the investor would need to prove that the timeframe – whether it’s a few weeks or months – was necessary to enable to construct the investment property.
I’ve heard this ‘non-advice’ so many times over the years and that’s why it’s so important that you get advice from a property accountant with a strong understanding of the relevant legislation.
Which land is best?
With vacant land, there are a number of different strategies that you could implement.
The first one is residential land that is being carved up by a developer, but you buy before the titles for each individual block have been registered. Effectively, you’re buying land off the plan, but it’s important to understand that there are pros and cons to this strategy.
The pro is that if it’s in a high-demand area and you’ve bought during the early stages of development, you tend to make some money. You also generally only need to put down a few hundred or thousand dollars as the deposit. Naturally, because you are very much dependent on how fast the developer can register each block, you’re at the whim of the market, which can be a con. For example, in my portfolio, I once bought 18 blocks of land that were not yet registered.
In fact, registration wasn’t supposed to happen for another two years. However, it happened in just eight months and I wasn’t ready. So all of a sudden I had 18 parcels of land that I had to settle on, but I didn’t have my finance organised.
After discussing it with the developer, I ended up settling on four of them and he released the other 14 back to the market, which worked out well for him because the market had improved.
So, if the land is registered well ahead of time, you can be left scrambling.
On the other hand, if registration takes longer than expected, the market could have slowed down. Like any off-the-plan project, you only need one bad valuation to negatively impact
the entire subdivision or development. Plus, everyone will be building at the same time, which means you’re competing for trades and will likely be finished at the same time, too, and that means a strong likelihood of softer prices.
What about greenfield and infill sites?
When I say greenfield sites, I mean blocks of rural land that you intend to rezone for residential usage. Now this is a strategy for more advanced investors because there is more risk as well as a higher financial component required for earthworks and approval costs. Greenfield sites can be bought for an affordable price, but if you can’t get the subdivision approved you need to have the money behind you to fight all your way up to the Environment Court if necessary.
A better strategy is to target infill sites within already established residential areas.
In this scenario, you buy a larger block of land, usually with a house on it, to carve off the land at the back or the side to sell as vacant or with a new property on it.
The other option is to subdivide, then construct a new dwelling and then keep both. Infill developments can also lean towards knocking the old house down, splitting the block into two and selling the vacant land, or building two houses or even multiples. It must always come back to whether there is a market for your project and whether the numbers add up, because you must take into account all of the costs on the way in and on the way out.
That way you can make an educated decision whether to keep holding long term or take your profits to invest elsewhere.
Whichever strategy you choose, you must do your figures on the worst-case scenario to see if it adds up. That’s because land generally has a lower, or no yield to start off with, which means your holding costs can be higher than with a house, for example.
At the end of the day, vacant land as a strategy, does work. You just need to have your eyes wide open to ensure your figures are correct and you must understand that it might be a while before income rolls in.
Finally, it goes without saying that you must get tax advice from a specialist accountant who understands property. If you don’t, you could end up with pockets just as vacant as the land you’re investing in.
22 June 2018
If searching for your keys is a part of your morning ritual, it’s time to break the cycle. Being organised is more than just a personality trait, it’s a lifestyle decision that’s easier to achieve if you stock your home with the right tools. These 15 clutter-busting essentials will make your days feel longer and less stressful. Cheers to that!
Idea: If you don’t want to hang a key hook, do yourself a favour and get a key catchall. Having a designated place to place your keys when you walk through the door will save you from the “running late” syndrome. Don’t be that person.
Get it: Making your own leather catchall is easier than you’d think. Follow this tutorial on A Beautiful Mess to DIY your own
Image Source: Bahar Yurukoglu for Domino
Idea: You know how it goes . . . You take the time to meticulously fold sheets and towels, and by the end of week, it looks like a bomb exploded in your linen closet. Here’s where clear shelf dividers come in. They’ll keep your stacks of linens in order without creating an eyesore.
Get it: Stock up on these acrylic shelf dividers to tame your most unruly closet.
Idea: Put your pantry on display by keeping dried goods and other treats in lidded glass jars.
Get it: You can get her kitchen jars at Ikea.
Idea: If you’ve seen these used to hang pots and pans, you’ll be happy to know that the idea translates for any room in the house. We love how Sugar + Cloth blogger Ashley Rose used one for above-the-bed storage and decor.
Image Source: Paul Costello for Domino
Idea: If shuffling through a drawer to find a tube of lipstick gives you anxiety, you’ll be amazed by the efficiency that a simple drawer organiser can offer.
Idea: Forget the space-saving allure of forgoing a knife block — we’re crazy about the fact that you can see the shapes and sizes of your most utilised knives while keeping them in reach.
Idea: It’s amazing how quickly a tray can corral clutter. Bonus points for turning the top of your toilet into an extension of your medicine cabinet (with the addition of a slim bud vase and framed picture, of course).
Image Source: Cahan Eric For Domino
Idea: Labelled boxes are a great way to organise the things you want out of sight.
Idea: Sure, you can use them to hang a curtain, but they work wonders in making the most out of shelves. Follow Martha Stewart’s lead, and use them to organise kitchen items like pot and pan lids, trays, and cutting boards.
Image Source: Lesley A. Unruh for Domino
Idea: Whether you need more storage space for clothes or craft supplies, these wall-mounted mesh drawers allow you to customize your storage and easily see what you’re storing.
Makeup Brush Cups
Idea: Instead of cramming makeup brushes into a messy drawer or makeup bag, keep them within easy reach in a stylish cup.
Idea: Whether it’s a drawer filled with neat rows of spices or a creative DIY that frees cabinet space, every organized cook seems to have their spice collection under control.
Get it: A Beautiful Mess has an easy-to-follow tutorial for making these nifty magnetic spice jars.
Clever Toilet Paper Storage
Idea: Running out of it when you need it is the worst, but stacking it in plain sight can cramp your bathroom’s style. Kill two birds with one stone by turning a basket into a toilet paper organiser and dispenser.
Image Source: Monica Wang for The Everygirl
Idea: A lack of cabinet space doesn’t have to stop you from owning bulky appliances like KitchenAid mixers and high-powered blenders. Some of the cutest rentals we’ve seen use stainless steel shelves for stylishly organization, making it easy to keep everything within sight. The best part? You can extend them or shorten them for a customized height.
Get it: This shelving unit is a great starter package.
18 June 2018
Buying and selling property in WA has traditionally been by way of a conventional private treaty arrangement, however buyers and sellers are missing out on a more pure form of transaction, and that’s the auction.
Granted, auctions are becoming a more accepted selling method and the numbers of weekly auctions in WA has increased significantly over the past five years, but still lag a long way behind private treaty sales and the Eastern states. So why is that we’ve been slow to jump on the auction bandwagon?
Firstly, WA’s law for property transactions using the current “Offer & Acceptance” method protect both buyer and seller and in the majority of cases are easy to follow. The system works effectively for all parties to the transaction including the buyer, seller, settlement agent/conveyancer and banks. The downside of this system is that is can be time consuming and in many cases is conditional upon buyers obtaining finance, property inspections, having to sell their current home, etc.
More importantly, the system has a major flaw in it and that’s the asking price is disclosed and typically buyers knock the price down to where they feel comfortable – so it’s not good for sellers.
So why should we look to auctions? The auction system is the most pure form of selling and buying as there are no “secrets” surrounding price or selling terms; all terms are provided in the marketing campaign and the buyers set the price on where they see value. Selling by auction in most cases is quicker than private treaty. And the seller has three bites of the cherry; sell before auction day, on auction day or usually within 30 post auction day.
There are two main misconceptions surrounding auctions:
1. They cost too much. The cost of the auction is merely the auctioneer’s fee for calling the auction and working with the seller, buyer and agent to achieve the desired result. Typically, an auctioneers’ fee is in the vicinity of $700 to $1000. All other costs are associated with the marketing campaign to promote the property.
2. Auctions only “work in expensive areas”. That’s just a suburban myth. There’s many examples of properties below the current Perth median price of $510,000 selling at auction.
WA is one of only two states, the other being Tasmania, that don’t have a cooling off period in our property contracts. A cooling off period allows the buyer to “break” the Offer to Purchase usually between 2 to 5 business days after the offer has been signed. In other words, if the buyer changes their mind for whatever reason they can legally break the offer and walk away for a very small consideration to the seller, usually between 0.2% – 0.25% of the purchase price.
As WA doesn’t have cooling off provisions in our property contracts, this makes it far too easy for sellers and agents to default to Private Treaty transactions. If cooling off provisions were introduced to our property contracts, I’d predict a huge increase in the number of property auctions taking place in WA.
Finally, too few real estate agents embrace auctions and the auction process with vigor. They lack confidence and in some cases, the ability to explain the different marketing options available to sellers and automatically default to Private Treaty. This is a marketing injustice to sellers and the sooner we can demystify and legitimise the auction process for both buyers and sellers, the better.
14 June 2018
If you’ve ever bought a heating appliance only to find it woefully inadequate for the task at hand, you need Christian Hoerning’s advice. A technical expert at EECA Energywise, he tells us how to stay toasty without getting burned by the end-of-month bill:
For larger rooms you want to heat regularly, it’s worth paying a bit more upfront for a fixed heater with lower running costs and more heat output than a small electric heater can provide.
Electric heaters may be enough for smaller rooms and rooms you only heat occasionally.
Hang on the wall electric fires can be two or three sided and have floating shelves such as those in the Skope Trento Suite from The Fireplace. Photo: The Fireplace
Avoid unflued gas heaters (either portable or with pipes fixed to the walls) that release toxic fumes and moisture, and open fires that are draughty and inefficient.
Match the size of your heater to the space. An oversized or undersized heater won’t work effectively, and can cost more to run.
To minimise the environmental impacts, choose a heating option that uses renewable energy, like wood, wood pellets or electricity (which is about 80 per cent renewable on average).
An Escea outdoor cooking fire completes this outdoor kitchen by Dravitzki Brown Architecture, it comes with an adjustable cooking plate for flame grilling. Photo: Escea
Choose the most efficient model for the job, and use and maintain your heater properly – for example, have heat pumps serviced and regularly clean the filters.
Fireplace: The expert advice
One reason wood fires have fallen somewhat out of favour is increasing clean air regulations in our cities. But wood is a renewable resource – and a real wood fire has romance on its side. So if you’re a sucker for the crackle and the ritual of stoking the logs, look for one that is clean air approved for urban areas.
“For large, open-plan rooms you can’t go past double-sided fireplaces as room dividers. They visually connect two spaces, and add intimate zones to the setting.” – Alex Hodge, Escea.
Escea’s double-sided DX1500 gas fireplace adds its magic to both the kitchen and living space of this home, designed by Product X Architecture. Photo: Escea
“Electric fireplaces, using sophisticated LED technology that mimics flames with different effects and colours, are no longer confined to in-wall options. Products such as the Gazco Skope Outset fires can be installed as a two- or three-sided fire so they make a stunning visual centrepiece.” – Geoff Dunn, The Fireplace
“A fireplace in the bedroom is the ultimate luxury, but definitely a better option with gas due to its on/off button convenience and controllable temperature. No one likes to sleep in a room that’s too hot. Escea’s multiroom DX Series has the ability to duct heat into different rooms – a good option for bedrooms as 90 per cent of the heat is ducted, not radiant. – Alex Hodge, Escea
“A fireplace in an outdoor room will add value to your home and extend your living space. Fireplaces provide a central social hub and make alfresco dining a lot more inviting. Escea’s EF5000 outdoor gas fireplace is an easy-to-install option that doesn’t need a flue, so it’s great for balconies and roof gardens that have views you don’t want to obscure.” – Malcolm Burton, Stoke Fireplace Studio
If you love the authenticity of wood fireplaces but live in the city, you’ll need one that’s clean air approved. Stovax Studio wood fires can be in-built or freestanding. Photo: The Fireplace
Other ways to heat
Sarah Moore from Rinnai says whole home heating (or central heating) is can be unusual, as most of us are used to spot heating just the living area. “Whole home heating allows you to have a warm, comfortable dry house and we have seen strong growth in this space over the last few years. We expect this trend to continue as more people understand the benefits of heating their whole home.”
Fan heaters are ideal for small spaces such as home offices or powder rooms that measure around 15sqm. Installed in a bathroom, they also reduce steam and should be turned on before you take a shower.
Wall mounted and perfectly quiet, convection panel heaters are a good choice for hallways and bedrooms. Choose one with a timer and an accurate digital thermostat.
Radiant heaters are for personal warmth; if you work from home in an open-plan space you could possibly do with one in the depths of winter but they will make no difference to the ambient temperature of the room.
Don’t forget to move the heat outdoors. A 2400W electric outdoor patio heater, for instance, provides heat for areas up to 10m away.
11 June 2018
Buying your first property is hard, so let’s make it easier for you.
Congratulations! You have decided to take the plunge, you have done some reading on what the various responsibilities when it comes to being a homeowner, you have spoken to the bank and have an idea of how much you are able to afford.
These steps take some time so we are here to encourage you to take the next step in home ownership. We know it’s a little bit nerve wrecking and a little bit scary, but we have compiled some advice from our in house experts to help you with this exciting time!
Looking for affordability without compromising on location
For many of us, your first home is not going to be your forever home. We recommend taking a holistic approach to purchasing property. Even if you are going to be living in that property, look at it as an investment as well.
For those first homebuyers who do not want to compromise on space, you may have to look further out depending on your budget or look for townhouses or terraces. If you are looking to keep more of your lifestyle, an inner city apartment may be the apt living situation for you.
What we emphasise is buying smart and seeing your home purchase as more than just a living situation but a step in growing your portfolio. You might want to ask yourself “How much rent will I get for this apartment?” or “What has been the capital growth in the area over the last few years?”.
We think asking these questions will not only give you peace of mind if you have to move out and rent or sell your property, but it is also how many people start their property portfolio. The first one does not have to be picture perfect, but it helps if it is a sound investment.
Location and amenities
The building, home or internal features are not the only things that you should consider when you buy. Are you in a desirable school catchment zone, are there amenities or transport facilities planned in your area or has a new shopping centre been planned?
Looking at the amenities and area around you is particularly important, as they are great financial health indicators that the area you are looking to buy in has infrastructure and amenity to attract people to live there.
Look on suburb out from your dream location
Looking for undervalued suburbs next to the pricier areas is always a something we recommend to our first home buyers – over time, population growth and gentrification will mean that there will be capital growth in your area.
It’s always good to also look at areas with employment growth as this will increase demand for homes in that area. Finally, do your research. It takes time to go through all the listings in the area you love and view the various prices they get sold for but it’s all worth it when you know you are on to a great purchase.
06 June 2018
The latest REIWA Curtin Buy-Rent Index for the March 2018 quarter has revealed it’s the best time to buy in Perth since 2013.
The Index, released quarterly, assesses whether it’s better to buy or rent in Perth based on past and current trends in the economic and property market climate.
REIWA President Hayden Groves said the March 2018 quarter index showed the annual rate of house price growth required over 10 years to break even in the Buy-Rent Index had declined from 3.3 per cent to 3.1 per cent over the quarter, suggesting an improvement for prospective homebuyers weighing up the decision.
“To put that into perspective, Perth’s annual house price growth rate has been 5.9 per cent for the last 15 years. Based on the March 2018 quarter Index, house prices in Perth would only need to grow by more than 3.1 per cent annually for buying to be considered more financially beneficial than renting,” Mr Groves said.
“This improvement in buying conditions can be attributed to the Perth median house price softening by 1.9 per cent during the March quarter, while the median house rent price increased $5 to $360 per week. We also saw the 10 year average mortgage rate drop to 6.43 per cent, which means home owners are paying less on their mortgage repayments.
“This is the most affordable buying environment we’ve seen in Perth for some time, so if you’ve been weighing up whether to buy, now is the time to take advantage of favourable market conditions,” Mr Groves said.
Mr J-Han Ho, a Property Researcher and Senior Lecturer in the School of Economics and Finance at Curtin University, said the data indicated a continued improvement for the home buyer in the near future.
“Our analysis shows home buyers gaining an advantage, largely due to the low interest rates for home loans, home ownership costs continuing to be affordable and the median rents stabilising,” Mr Ho said.
View the March 2018 quarter Buy-Rent Index.
01 June 2018
Image Source: POPSUGAR Photography / Lisette Mejia
If the idea of getting your home company-ready is keeping you from hosting a dinner party or even your out-of-town in-laws, we can help. Sure, you could spend all day cleaning and decorating in anticipation, but who has the time? Here are the only things you really need to do before your guests arrive. Don’t worry — they are nothing but easy.
The Scent of Your Home
Image Source: POPSUGAR Photography / Brinton Parker
Decor isn’t the first thing guests
notice when they walk through your door — it’s the smell. Whether you’re
concerned about the fish you cooked the night before or your dog skipping a
bath — or worse, the scents you’ve become nose-blind to — put your
mind at ease by lighting a candle or simmering a small pot of citrus peels and
cinnamon sticks a half hour before guests arrive. We can’t get enough of these yummy-smelling candles.
A Well-Stocked Bar
Image Source: POPSUGAR Photography / Lisette Mejia
After greeting guests, the first
thing that you will want to do is offer them a drink. You don’t need to be full
service, but make sure you have the home bar basics covered.
Image Source: POPSUGAR Photography / Mark Popovich
Flowers are the only decoration a
house really ever needs, no matter the occasion (although we feel pretty
strongly about candles too!). To get the most bang out of your buck, buy potted
flowers, like orchids. They may look delicate, but with proper care, they
will last for a month or longer.
The Lack of Clutter
Image Source: POPSUGAR Photography / Grace Hitchcock
Even if you don’t have time to do a
deep cleaning, you can still organise your clutter. Get a tray or a set of
lidded boxes for each room and corral all the odds and ends — remotes,
keys, mail — in one place. Guests will feel relaxed in a space that
appears organised, even if it is just for show!
A Tidy Bathroom
Image Source: POPSUGAR Photography / Grace Hitchcock
Before guests arrive, make sure your
bathroom has clean hand towels and enough toilet paper. Extra points for wiping
down surfaces and lighting a candle
An Organised Entryway
Image Source: POPSUGAR Photography / Lisette Mejia
Not only is it the first place and
last place that your guests will see, your entryway is also where they will be
dropping their coats and bags. Depending on how much room you have, add a coat
rack, umbrella stand, and a place to sit while taking shoes on or off.
01 June 2018
You’ve worked hard to make your bedroom a welcoming sanctuary, but beneath its pretty facade, there could be serious health hazards lurking. Read on to uncover the bedroom dangers that could be harming you while you sleep and learn what you can do about them.
Let your bedroom air out by opening the windows as weather permits each day. It will refresh the space and void it of noxious gasses that can build up indoors over time.
Not only will a potted plant or two beautify your bedroom, but they will also release oxygen and help filter out harmful compounds emitted by everyday cleaners, detergents, and fragrances. Studies show that these 10 houseplants can even improve your health.
A quiet air filterer is an efficient way to purify your bedroom of dangerous pollutants and agitating allergens like dust mites, pollen, and pet dander.
Even with an air filter, it’s important to keep dirt and dust mites at bay by cleaning regularly. Pay special attention to areas that tend to accumulate them the most, including the floor, baseboards, windowsills, and upholstery. Even “clean” people often forget to wash these eight things.
The amount of dead skin, grime, and dust mites that collect on your bedding is rather horrifying and can cause problems from asthma to acne. The good news is it’s easy to get rid of by cleaning your sheets, duvet, and pillowcases every 1-2 weeks. Case in point? This horrific study reveals the horrific result of not washing your pillows for just two years.
Keep moisture from getting stuck in your bedding and mattress and causing problems by airing it out briefly before you make the bed in the morning. Pull back the sheets, fluff out the pillows, and give everything a few minutes to dry before they’re closed back up for the day.
Bad news for memory foam pillow-lovers. These ergonomic head rests often outgas dangerous Volotile Organic Compounds or VOC’s that can cause headaches, nausea, and eye irritation. You don’t want your face, mouth, or nose anywhere near them. Swap them for pillows filled with organic materials, like wool or feathers, or at least a safer foam like a natural latex foam.
- Flame Retardant-Free Mattress
Considering how much time you spend in close proximity with your mattress each day, it’s a no-brainer to make it a safe one. While many products, including mattresses, were once doused in flame-retardant chemicals, it’s come to light that these chemicals are doing much more harm than good. They’ve been linked to types of cancer, birth defects, and fertility issues. Scary stuff, and reason to seek out an organic, chemical-free mattress.
In small apartment or studio, space is at a premium and spaces may have to do double duty – but do your best to keep office equipment away from your bed, especially if it’s running all the time. Research has shown that laser printers emit tiny particles into the air that may be dangerous.