a few words about
Investment Property Advice
Buying an investment property has proven to be a great way to accumulate wealth. Unfortunately, there are a lot of myths surrounding property investment and a lot of unregulated groups spruiking their investment property ‘advice’ whilst receiving an often-undisclosed commission from the developers or builders they recommend.
In addition to the commission they receive, some of these property groups also charge the investor a fee for their service. There are also many ‘advisors’ receiving undisclosed commissions for referring their clients to property groups, developers and builders. This presents obvious conflicts of interest and leaves many clients with no protection against unlicensed and unregulated advice.
I believe full disclosure and separation of the compensation for providing the advice from the compensation for selling the property will mitigate these conflicts of interest and leave the client better informed to make to right choices, avoiding the mistakes made by some landlords.
Getting expert advice and guidance from licensed practitioners will help you grow your property portfolio quicker whilst maximising the return on your investment.
M2 Financial Services has been providing property investment advice for over 25 years. As licensed Financial Planners, Mortgage Brokers and Tax Practitioners; our approach to successful property investment cuts through the myths and emotions and maintains a focus on the math's and logic, without any conflicting commission arrangements.
A lot of landlords do not consider Investment Profiles, Property Cycles, Ownership Options, Finance Structures, Depreciation Schedules, Tax Variation Authorities and Cash Flow Modelling when buying an investment property. A good knowledge of these key aspects is vital to ensure efficient property investment.
When structured correctly, the cost of acquiring and holding an investment property is often a lot less that you may think.
If you are interested in building wealth through property investment then contact our team of experts today and arrange your fee free, no obligation ‘Step 1’ review.
our step-by-step guide to property invesment
- Is property investment the right way for you to achieve your goals?
- What type of property investor are you?
- What are the risks associated with property investment?
- What can be done to mitigate these risks?
- How much would it cost to buy an investment property?
- How much would it cost to hold an investment property?
- How much of this cost is tax deductible?
- What is a Tax Variation Authority?
- What is Depreciation and how does it impact your costs?
- What is the difference between owning the property in individual names and joint names, or through a company or trust structure, or even through a Self-Managed Super Fund?
-What are the advantages and disadvantages of each way the debt could be structured?
Our team of experts will review your borrowing capacity, organise pre-approval of finance, and ensure you have sufficient access to funds to use for deposit purposes.
We have had dealings with many Property Groups and Buyers Advocates over the years and are happy to recommend the business for which we have had a positive experience and whom we believe have good ethics and clearly disclose of any conflicts of interest.
Any Property Group or Buyers Advocate we recommend is under instruction not to provide any unregulated financial advice nor any commission or referral fees to M2 Financial Services. As a result, the services the Property Groups and Buyers Advocates provide can be stripped back to their areas of speciality and the cost savings passed onto the client. Not only does this mitigate any conflicts of interest, but it reduces the cost of your investment.
The areas of speciality provided by good Property Group & Buyers Advocates include:
Expert ‘eyes-on-the-ground’ reviewing different suburbs and locations. Analysing property values, development projects, population growth, vacancy rates, rental returns and infrastructure projects; to generate a dynamic list of properties and locations that meet strict criteria.
Trained negotiators with years of experience in buying property, often level the playing field when dealing with real estate agents and developers.
If you end up building an investment property recommended by a good Property Group, the volumes of business they provide to builders and property managers often results in improved service and cost savings to the client, and any mistakes they make are often fixed up a lot quicker.
Comparative Market Analysis (CMA)
- Property History
- Suburb sales history
- Comparable sales and rentals
Property Investment Analysis (PIA)
When done properly using realistic assumptions, this is an invaluable tool for comparing one investment property with another. Our PIA includes analysis of:
- Acquisition Costs
- Rental Return and Rental Yield
- Holding Costs
- Income Tax and Negative Gearing
- Selling Costs and Capital Gains Tax
- Net Present Value (NPV)
- Internal Rate of Return (IRR)
- How does buying this investment compare to using the money to pay off your mortgage?
We have dynamic list of specialists that we recommend for conveyancing, building inspections, pest inspections, property managers, tax depreciation schedules and tax returns.
- How is your investment property performing?
- Should you hold, sell or buy another investment property?
- Is your ownership structure still the most suitable?
- Can your debt structure be changed to further mitigate risk, reduce interest cost or release equity?
Our team of Mortgage Brokers invest will also review your investment loan arrangements on a regularly bases to ensure that your loan remains competitive.
As mentioned above, the initial review (Step 1) is provided complimentary without fee or obligation.
As Financial specialists, we delegate the responsibility for property research and acquisition (Step 3) to Property Groups and Buyers Advocates that we are happy to recommend. As we have elected not to receive any referral fees from any service providers to avoid any conflict of interest, and because they streamline their service to their areas of speciality, the service providers we recommend are able to reduce their costs to you, often by an amount greater than the fee we charge for our service.
To avoid any conflicts of interest, our preparation, research, analysis, recommendation, implementation and review services are provided on a flat fee for service basis.
As Mortgage Brokers our Licensee (Loan Market) will receive an upfront commission of approximately 0.6% of the loan amount and an annual commission of approximately 0.2% from the lender. Some of this commission will be passed onto M2 Financial Services.