June 2008 Newsletter

X-INC/JPP PROPERTY INVESTMENT SEMINAR

Just a quick reminder about the upcoming X-INC/JPP property investment seminar - you can download the information brochure here. (This seminar has now passed - link removed).

Location:    Caulfield Cup room, Glen Eira City Council Town Hall. Cnr Hawthorn and Glen Eira Roads Caulfield
Date:         Wednesday 2nd July, 2008
Time:         7:00pm
Topics:       Ian James from JPP will speak on Property Selection, Negotiation and Melbourne property hot spots.
                 Grant Rheuben from X-INC will speak about financing investment property, interest rates and tax issues.
                 Graeme Efron from Efron and Associates will speak about why use a solicitor, and common legal pitfalls.

MARKET OVERVIEW

With clearance rates well and truly established in the low 60% range, we turn our focus on which properties are worth buying. Most people who do not have to sell at the moment - won't be. Those vendors that are putting their properties on the market are usually doing so because they are moving due to family or work commitments, or they are simply selling then buying (when exchanging properties it doesn't matter what market we are in - what you lose on one you gain on the other side).

What this generally means is supply is low but bargains can be there if the property is good. As an investor the cheapest property in the area is not necessarily the best long term investment. However, buying whilst the market is depressed means you have the greatest chance of capital growth as the market takes off again. It is your choice of property that will be the key.

With an extra million people due into Melbourne over the next 12 years, property prices should rise very well. Although most of the 380,000 new dwellings that will be required will be built in new estate areas, the majority of the capital growth will probably be much closer to the CBD. Fuel prices are also beginning to take their toll on properties 25km or more from the CBD.

Areas that are close to the CBD with excellent transport facilities, good local cafes and restaurants, easy access to hospitals, major shopping centres and places to walk the dog or play in the park are going to be highly sought after. Access to educational facilities and community infrastructure are also components of highly sought after locations. Refer to our article on property selection in our "how to" series.

Ian James

SAM'S FACTS

Facts about GOLD:

A cubic foot of gold weighs about 1/2 ton. Just think about that for a moment. That's the size of a ruler, cubed.
It is 19 times heavier than water, whilst Lead is only 11 times heavier than water!!

The answer to the question in the April newsletter is:
        Question : Where & When was Ricky Ponting Born (The Australian Cricketer, for those like me who don't follow much sport!!)
        Answer : Ricky Ponting was born on 19th December 1974 at Launceston TAS.

Ricky's Test debut was Australia v Sri Lanka at Perth, 1995-96. Ricky's ODI debut was Australia v SA at Wellington, 1994-95. Ricky Ponting won the Allan Border Medal in 2004. Ricky has also won the award for Test Player of the Year in 2003 and 2004 at the Allan Border Medals. At the Allan Border Medals in 2002 Ricky Ponting won the award for One-Day International Player of the Year.

June Question: Who invented Vegemite, and when????

The answer to this question will be published in the next newsletter.

Sam James

TAX TIME: PROPERTY INVESTORS

With tax time almost upon us again, here are some ideas to help prepare yourself for an easy tax return.

If you have all the following details on an excel or word document; your accountant will appreciate you, and it may save you some $$$

• Have you done your depreciation schedule? There a many reputable companies to be found on the internet. Most offer money back if you don't get their fee back with in the first 12 months.
• Copies of all receipts of works & expenditure you have done over the last 12 months on the properties.
• Copies of bank statements relating to your accounts for your investment properties.
• Insurance receipts, Landlord, Building, etc.
• Your property manager should give you a statement for the year.

If you have all this kept up to date and it all works out well, why not think of increasing your portfolio with another property?

Rental properties are getting more scarce for tenants; Melbourne currently has a 1% vacancy rate which should increase rental income; and with property prices settling, it is looking like a great time to get back into the property market.

Did you know you can use the equity you currently have in your investment property for the next purchase, and so on and so on?

Call us for a chat about where to look for your next investment.

Sam James

SPOTLIGHT ON MELBOURNE SUBURBS

In our regular spotlight section we examine a selection of Melbourne suburbs, highlighting what's happening in these areas right now.

Malvern

Council: Stonnington City Council www.stonnington.vic.gov.au
Post Code: 3144
Area: 2.9 km²
Population: 9,422 (2006 Census)
Neighbouring Suburbs: Glen Iris, Armadale, Caulfield North, Toorak

Malvern is a very well established area of Melbourne's inner east. For quite some time the area has been home to beautiful homes ranging from original Victorian's, through amazing Edwardian homes all the way up to fantastic new modern, contemporary homes.

Malvern is located just 8 km's from Melbourne's CBD. This, assisted by the fact Malvern has very good infrastructure, great public transport and its close proximity to the M1 freeway makes it a very desirable area. Click here for an interactive map of Malvern.

Glenferrie Road is a major attraction to Malvern; the street has one of the largest sets of strip shopping in Melbourne. Among those shops are some lovely restaurants and cafes, a large range of fashion clothing stores and two supermarkets. Malvern Central located just off Glenferrie Road is home to over 40 specialty stores, Safeway and Target.

The tram makes it very easy to get around in Malvern, with lines running east-west down Wattletree Road, High Street and Malvern Road, and one running north-south down Glenferrie Road. The train runs from Malvern Station into the city or out to Frankston and Pakenham.

Rental Analysis: Malvern

Courtney James

Highton

Council: City of Greater Geelong www.geelongaustralia.com.au
Post Code: 3216
Population: 14,494 (2006 Census)
Neighbouring Suburbs: Belmont, Wandana Heights, Fyansford

Highton is a thriving suburb situated south west of the Barwon River in Geelong. It is just a short drive to the Geelong CBD and has an excellent bus-based public transport system. Click here for an interactive map of Highton. Highton is a highly sought after location for a host of reasons: Many purchasers would name the Barwon River as its most appealing highlight, whilst others would consider the views across Geelong, which include the river, as a reason for living in Highton.

There is quality shopping available in Bellevue Avenue at Highton Village. A Safeway Supermarket is the stand out with many food outlets and specialty shops within the village. There are a number of shopping strips also which cater for everyday needs for residents living in outer areas of this large suburb. Porter Avenue and North Valley Road are two very good examples.

A number of schools are situated in Highton including Bellaire and Highton Primary Schools. The Highton/Belmont boundary is within a short distance to Belmont High School and is within walking distance for many Highton children.

A new estate, The Province is being developed on the western extremities of Highton and is in Stage 2 of land selling with infrastructure in place and seeing Stage 1 owners commencing to build. It is an exciting development.

Highton has pockets of real estate that rival any in Geelong. Million dollar properties with magnificent views are situated well elevated above the Barwon River in Montrose Place. Also a modest three bedroom home can be bought in other areas for $250K.

Rental Analysis: Highton

Mike Walmsley

THE UN-SUSPECTING NOVICE

We all know Location is the number one consideration when searching for a home. You can change a property, but you can't change its location. Second on the list is budget consideration. We are living in a stressed economical climate, and the majority of the population is concerned with tightening the house hold budget to meet ever increasing living costs. This doesn't mean the great “Ozzie” dream of owning your own home or investment property has gone out the window. However, it does mean finding a well located property within a comfortable budget is undeniably more important. With interest rate rises still a hot topic of discussion, you can understand why this should be the case.

As dedicated buyer advocates, we deal with restricted budgets 7 days a week. As such, we know that choice of is the most important factor when increasing your chance of securing the 'right property at the right price'. But how do you negotiate in Melbourne's real estate market? For a more in depth discussion on negotiation please refer to our "how to" series.

As we have mentioned in our news letters before - Melbourne's population is on the increase, but no matter how tight budgets get there is always buyer competition around well located real estate. If I hadn't had a career working in the real estate industry, I would have very little idea how to go about assessing a homes worth, let alone negotiating with a 'selling agent' - who is often portrayed similar to the 'serpent' in the garden of Eden.

There has been much in the press regarding misleading price quotes, and even with all the attention the matter has received from consumer affairs - who have attempted to make it 'fair' for both sellers and purchasers - it is by no means a resolved issue.

I can say from my own experience that no two agencies will quote the same way using the same principals. Many agencies choose not to advertise price at all. It's safe to say you cannot trust a property price quote or range to give an accurate assessment of value. Even at the upper end of the price bracket you may not secure the home or even meet the reserve. Therefore assessing a homes worth on what's written on the price tag doesn't hold much reliability. Always remember the real estate agent is working for the vendor.

You can of course go on recent sales in the area. If you have kept abreast of the market and you're familiar with the locale, this is certainly a more reliable way of doing things. However we are currently experiencing a market where turnover is very low. Therefore finding relevant results (similar properties and locations) may not be a simple task. Furthermore, it would not be wise to use last year's sales results to assess value. Last year the market was experiencing a 'boom'. Therefore assessing a property's estimated value is as much to do with current market forces, as it is with comparable sales results. Finally, most properties in Melbourne are listed for auction and therefore negotiation can be difficult.

It is not hard to find property, but it is a different ball game if you want to purchase well located property for the best possible deal. Purchasing property with expert assistance not only reduces the stress of locating prime real estate, but provides necessary reassurance that you have walked away with a 'good deal'. 'Peace of mind' is a rare, priceless commodity in today's society. It should be taken as a fundamental requirement when dealing with such a big investment.

If you're not convinced or still think that you can handle negotiating with a selling agent then let me stress an earlier point I made. Remember the agent you are dealing with is a 'selling agent'. He is not there to assist you. He is not there to help you work out a properties worth. He certainly won't be trying to save you money - quite the reverse. His number one job as a selling agent is to get the BEST POSSIBLE DEAL for the vendor. He does his job 7 days a week and his sales commission is his bread and butter. You're dealing with someone who knows the 'tricks' he needs to use to squeeze every last dollar out the un-suspecting buyer.

We negotiate on property every day; therefore we understand how the business of real estate works. We understand the process, and we are secure that every property we buy is purchased for a fair and reasonable price. At the end of the day we have 'peace of mind' when it comes to buying real estate. Could a novice buyer say the same?

Catherine Cashmore

FISHING WESTERNPORT

Well the weather has been very kind of late with the winds abating and the temperatures have been moderate for this time of year.

Salmon are still relatively easy to catch and they make excellent fresh baits for the gummy shark. Around in the deep off Corinella you will still find some large snapper in the early evening but through the night (rug up its pretty cold) the 10 - 15kg gummys cruise through. I heard a great tip the other day. Use a 30cm dropper on your sliding sinker rig. This will keep your bait off the bottom and I have found it keeps the lice away at night. (Thanks Dean from Fishing Rigs)

Only 99 more sleeps till the snapper arrive!!!!!!!!!!!!!!!

Good luck with your fishing.

Ian James

ESD (Ecologically Sustainable Design) & its impact on Property Value

The following article is kindly contributed by Mark Varrasso. Mark is a Registered Architect, Certified Practicing Planner and director of Vison3 Architecture P/L.

Renovating a home is an exciting process, but it can be daunting too. There's much to consider and it can sometimes be hard to know where to start. Of all the various considerations, perhaps the over-riding concern is to create a renovation that meets all your needs and provides the best value for money, now and for the future.

For most people a home is much more than a place to live. It is a long-term investment. Up front costs are obviously critical, but consideration should be given to how much it will cost to run your house in the long term. Your renovation decisions will have important consequences for your future living costs and quality of life. So you want to get it right.

It is also important to consider that we find ourselves in a transition period technologically and environmentally. The old ways are increasingly seen as redundant and new issues need to be factored into smart investment decisions. This is sometimes called 'future proofing'—making sure your investment will hold its value over time. There can be an initial cost for this, however features that enhance resale value, improve comfort and reduce bills are worth paying a little bit more for now. You can use savings on energy and water bills to help pay your mortgage faster. Some financiers even offer lower interest rates (known as 'green' mortgages) or other financial incentives for home improvements that are designed to save precious resources like energy and water. Government rebates are also available to offset the purchase cost of many energy and water saving items.

Good planning is such an important part of ensuring value for money. Most renovation budget overruns are the result of poor planning—changing the design half way through, trying to fix up problems you didn't see coming, or simply failing to make the most of the opportunities presented. Experienced renovators will tell you how important it is to plan ahead. A registered Architect can help you do just that.

Before you engage an Architect, it is important to establish a wish-list of everything you want from your renovation. This can include notions such as 'light' and 'warmth', as well as more specific outcomes such as extra living space, an efficient hot water system or a more functional kitchen. At the same time, consider what you are starting with — this step is so important for making the most of your renovation. An assessment of your home will identify the most cost effective opportunities for big improvements. It will also identify potential hazards so you can deal with them in the most cost effective way. Use what you find to develop and refine your Brief, as this will be a key factor in determining the success of your project.

Vision3 Architecture
www.vision3.com.au

RECIPE

Seeing as the snow season is now open, I thought snowballs would be appropriate. Great fun to make with the kids with plenty of mess to be made.

Marshmallow Snowballs

• 600g (about 40) Digestive biscuits
• 1 tin Condensed milk
• 24 Large marshmallows
• 85g shredded coconut, lightly toasted

1. Either blitz the digestives in a food processor to make crumbs, or place in a heavy duty bag and bash with a rolling pin or meat mallet.
2. In a bowl, mix together the condensed milk and biscuit crumbs. Wrap biscuit mixture thinly around each of the individual marshmallows and roll into balls. Note that it is easier to do this with wet hands.
3. Roll the balls in the coconut to coat, chill until serving.

Enjoy!!

Courtney James

IMPORTANT DATES

Kind regards from the team at JPP.

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Contact Us
JPP Buyer Advocates
368 Hawthorn Road
Caulfield South 3162
P: 03 9523 1054 F: 03 9523 1082
E: [email protected] W: www.jpp.com.au