Dovetail Developements

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Tips for owning an investment property for less than $1 per day

This highlights one of the benefits of owning a newer property compared to an older property. Let’s explore why smart investors are taking advantage of one of the important benefits of owning an investment property. New versus old property Many investors are completely ignorant of the quantum of tax that can be saved by claiming what is available on their investment property - tax depreciation. This factor alone is often the difference between making or losing money on your investment – and your preferred option should always be to make a profit! In the case of depreciation on fittings, for example such as a hot water system; this can be depreciated over 10 years, carpet 5 years, and so on. As a rule, newer properties tend to have more depreciation. The amount of depreciation can be anywhere from $1,000-$15,000 in the first year, depending on the property and the assets. Some investors will spend time looking at buying in locations which offer high rental yield. That may be fine for some, but long term investors will seek a combination of high yield (after tax returns) plus capital appreciation. A high yielding suburb may not offer high capital growth prospects. A typical investor will reduce their holding costs to under $1,000 a year and in some cases even less, when depreciation deductions are factored in. For example an apartment in The Belle Apartments Boronia, are priced between $309,000 and $385,000, therefore, when negatively geared, for example borrowing 70 percent of the cost, the holding costs can for some investors, may be as little as a dollar a day. If you are interested in buying an investment property off the plan, we would encourage you to take a look at the projects page on our website www.dovetaildevelopments.com.au or give us a call on 1800 220 148 and we’ll show you how you could save up to $100,000 off your next off-the-plan property purchase.

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A Car Stack You Do Want

A Car Stack You Do Want One of the issues facing any growing metropolitan areas is the number of vehicles that come along with population growth. The City of Knox and neighborhoods like Boronia are no exception. Despite the many initiatives to encourage alternative modes of transportation like cycling and walking, government officials and developers alike understand that people still need their cars. And all those cars need to be parked someplace. In an urban environment like Knox, where a commitment to sustainable, green living is a top priority, finding creative solutions for the need to store vehicles is a top priority. Simply put, it is not desirable to pave a parking lot over land that could be used for community green spaces like parks and playgrounds. Which is why developers of new multi-family living spaces like The Belle Apartments Boronia are turning to innovative options like car stacker systems to reduce their parking footprint. Since the mid 1980s, forward-thinking municipalities, businesses, and developers around the world have been using car stackers to create space efficient vehicle storage solutions. Australia has quickly caught on to the car stacker idea, with cities like Melbourne, South Yarra, Prahran, Carlton, Camberwell and Elwood all using them in various residential and commercial applications.   But what exactly are car stacker systems and how do they work? Car stacker systems are automated, mechanical storage solutions that robotically stack vehicles vertically on moveable platforms, allowing multiple vehicles to occupy the same footprint. Car stacker systems come in a variety of configurations and can be installed indoors or outside, making a car stacker system an excellent solution for high-volume vehicle storage in smaller parking garages or lots. They are easy to use and environmentally friendly.   Innovative builders and developers are turning to car stacker systems to reduce the parking area space needs of new buildings. The Belle Boronia is one example of new apartment development in the Melbourne area that is using such technology to support the commitment to a greener and more sustainable lifestyle.

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DOWNSIZING - There are more upsides than you think!

Planning Minister Matthew Guy recently noted that Melbourne’s population is growing by 1500 people per week, which is more than any other State in Australia, and equal to the combined growth of Brisbane, Adelaide, GoldCoast, Newcastle and Canberra. The Australian Bureau of Statistics (ABS) has observed Melbourne being the fastest growing Australian capital city for the last 11 years, and it is anticipated that by 2050, Melbourne’s population will have reached between 5.6–6.4 million. However, what is more interesting is that as a community we are changing. In 2010 a report from the Australian Institute of Health and Welfare (AIHW) revealed that the average age of first time mothers increased to 30 years old and the proportion of older mothers (classed as 35 and over) continues to increase. We’re seeing the average family size reduce to 1.8 children and the ABS predicts that we’ll continue to see a steady decline in the size of our households, as by 2026 the average house will consist of a total average of 2.3 people. Naturally, during this period Melbourne’s property landscape has evolved to cater for our expanding population, smaller family sizes and new lifestyle preferences. As you would be aware, historically, the preferred Melbourne residence has consisted of a single dwelling property, with generous bedrooms, separate living spaces and large a backyard, however what we have been seeing in recent years is a shift towards smaller dwellings, such as apartments and townhouses. This external observation is supported by ABS statistics that show from 1991 to 2001 nearly 45% of all new dwellings were either attached or semidetached dwellings. Furthermore, we’re now seeing that only 59% of all housing stock in the inner ring of Melbourne is standalone houses, with the remaining 41% being apartments, units and townhouses. So, what does this all mean, particularly for those who enjoy their family homes, and have no interest in moving, but would like to capitalise on this shifting market? We would recommend that subdividing could deliver a win/win solution for you and the demands of the market. Subdividing was highlighted as one of the top four winning strategies for property owners and investors ‘Smart Property Investment’ magazine in May 2012, and therefore it could prove fruitful for property owners, those seeking smaller dwellings, and our ever-growing Melbourne population. If you are interested in buying an investment property off the plan, we would encourage you to take a look at the projects page on our website www.dovetaildevelopments.com.au or give us a call on 1800 220 148 and we’ll show you how you could save up to $100,000 off your next off-the-plan property purchase.

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Bridging the Superannuation Gap

Why is it that some of the most important things in life, we often avoid and put off as long as possible? For example, going to the dentist, filing important paper work and revisiting our superannuation? Superannuation is a one trillion dollar business and arguably one of the biggest social issues in Australia. Recently our research team at Dovetail stumbled across the following statistics:

25% of Australians aged between 65 to 69 are still working

Post the GFC, 14% of Australians intend to work until they are 70 years or older

An Australian couple will need $56,339 per annum for them to retire comfortably

1 in 4 own their house, however they don’t have enough money in retirement 

75% of retirees are on some form of welfare 


The Australian Government has recently announced a long-term strategy that aims to address some of the issues raised above, by gradually increasing the compulsory employer superannuation contribution rate from 9% to 12% by 1 July 2019. 
 For those under 50, a good piece of advice is to dedicate at least 30 minutes per year to visiting the status of your superannuation fund. To assist you, there are a number of websites, such as Money Smart (www.moneysmart.gov.au/toolsand- resources/calculators-andtools/ superannuation-calculator) that can give you foresight and a quick injection of inspiration to put your super and retirement plan firmly on your priority list. So, what if you do not have time on your side, what are your options? Sadly, we often see many of our clients in this situation, however rather than hoping to win Tattslotto where the chances are only 1 in 45 million, we have a solution that 1 in 5 may be able to benefit from, which enables you to continue living in your home/ community and secure the cash flow you need, just by refiguring the size of your property. To learn more, see Frank and Joan’s case study – below is a few quick facts:

Frank is 67 years old, Joan is 65 years (married for 46 years)

Owned their corner block, brick 3 bedroom house for 29 years


In 1984, they purchased the house almost new for $58,000

In 2012, their 655 sqm property was worth $652,000 (original bathroom & kitchen)

They were spending $60 per fortnight having it mowed and maintained 

In June 2012, they sourced a seniors loan for $79,500 against their property


Dovetail was engaged to subdivide their block, and provided a trusted referral for their bathroom 

and kitchen renovation

Whilst the renovations took place, Joan had a hip operation with the funds By March 2013, their property was subdivided and they decided to sell off the vacant land for $350,000 and they had their property re-valued for $620,000. They paid off the $79,500 loan and put the remaining $270,000 towards their retirement fund.

To find out more on how you can benefit financially through subdividing your property in Moorabbin, visit our website at www.dovetaildevelopments.com.au.

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Key Decision Points for a Rookie Property Developer

Learn how to define your project scope, avoid the headaches and set yourself up for success!

Congratulations on taking the first step towards constructing your own property development! Like all successful projects, it is essential that you have 5 key elements; 1) a strong vision, 2) an experienced team, 3) a clearly defined scope, 4) a plan that beats the feasibility test, and 5) ability to execute (aka blood, sweat and tears!).

If you have come to a halt at step 3, don’t worry you’re not alone. If you’re doing your research you will have noticed that there are many different property development strategies that can deliver healthy profits.

Therefore, before you set off on a wild goose chase, it is best to define your project scope, to enable you to build your knowledge, master the pitfalls/benefits and set yourself up for success.

To help you assess your options, below are the 4 most common types of projects:

Residential: as the name suggests, this involves building apartments, townhouses or units for residential purposes. It is important to research your area and understand the local Council’s requirements, particularly if you are planning on subdividing the land. Click here to learn more about the subdivision process

Commercial: these are developments designed for office buildings, hotels, retail outlets, restaurants and shopping centres. If you research the BRW Richest People in Australia, you’ll find that this is the type of development has led to many successes, but beware it does come with associated risks.

Mixed Used: are buildings that consist of a combination of residential, commercial or industrial uses. The designs are physically and functionally interconnected. An example of this is an apartment development with retail or office shop fronts on the ground floor and residential apartments above.

Industrial: involves factories and warehouse developments. The most distinctive characteristic of an industrial space is clear height. However, once again, you need to research the specific areas and Council zones that allow you to develop these types of properties.

Now that you have assessed the different development options, you can begin to make decisions about your project scope. Once this is firmly checked off your list, you need to ensure that your arm yourself with the following crucial tips to delivering a wining venture:

Do your due diligence – look for properties that are undervalue and can ensure a solid return on your investment (this means doing your homework, carefully calculating the numbers, not over capitalising and meeting the needs of the market)

Think outside the box to the unlock potential in your property – sometimes bulldozing a house and rebuilding apartments/townhouses may not deliver the lowest possible risk and highest profit – you may be able to subdivide, build a couple of townhouses and renovate the existing house and achieve a better outcome.

Build an experienced team: speak to experts such as project managers, town planners and mortgage brokers that specialise in larger scale developments to help you avoid any risks and pitfalls.

Build cost-effectively: consider your networks, look into wholesale options to ensure that you don’t over spend on your build and reach your target profit.

Research and watch the market – particularly in the current conditions it is important that you intuitively know your target investor and buyer. To do this, we encourage you to reach out to your Real Estate network – they would be happy to provide insight about your target audience and information about the local area.

Seek out tax and legal advice to ensure that you are well protected and you can avoid any hidden surprises throughout the development.

So, I’m sure you’re now wondering what does a successful project looks like. Generally, you should aim for at least a 20% return on your investment. That 20% will be a good margin to maximise profits, and minimise the risk of losing your money. During your first project, it will give you flexibility to make mistakes and still gain a reasonable profit margin. We hope this information sets you off in the right direction. We wish you all the best for your development - happy hunting!!!

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Planning a Property Development?

Stop your development from falling over with these 8 steps!

Property development is a bit like a good game of Jenga – you need to start with a solid foundation, be in the right place at the right time, and it requires careful decision-making along the way.

Many people leap into property development because of its lucrative results, however it is important that you don’t move too fast or jump ahead of yourself without establishing a plan and/or considering the future ramifications of your actions.

So, to avoid your development from falling over, we recommend that you do your homework, understand the process and follow the 8 steps below:

Research and due diligence

When you are looking for a site, you may find that you need to review over 100 properties before you find the right one that stacks up. To help minimise time and effort, build a team of experts around you and be sure of your vision and scope for more information see our article titled:

“Key decision points for a rookie property developer”.

Feasibility assessment

If you are new to the property development game, a team of consultants can provide advice on how to carefully assess the feasibility of the development and ensure that you have enough fat to withstand any unexpected hurdles along the way. In addition to your development consultants, your team should consist of a Solicitor, Surveyor, Arborist, Architect, Town Planner, Engineer, Builder and a Real Estate Agent. By effectively crunching the numbers, you’ll be able to determine whether the deal will deliver the end game that you are striving for.

Design and concept

Leveraging the experience of your Architects who understand the requirements of the local Council, you’ll have an opportunity to sketch the design of your development. This includes internal and external plans that outline the size of the development, car parking requirements etc. It is important that you do this prior to purchasing the site, as your Architect will be able to quickly assess whether you can incorporate extra units, townhouses or apartments, which will naturally feed into your feasibility and decision making process. At this point, it is also worthwhile sourcing a few building quotes, so that you can also plug these costs into your assessment.

Make an offer and purchase

If steps 1-3 receive a big tick, you’re ready to make an offer (to fly through steps 1-3, it is essential that you have your team in place prior to starting to look at sites). At this stage, you should speak to your Solicitor about whether you should use any “subject to” clauses in the contract (i.e. subject to finance, subject to arborist report etc), as this will provide you with a safety net if not all elements are ironed out at the point of signing the contract of sale.

Town Planning Application

At this stage, you will work with your Architect who will submit the town planning application to the local Council. The Architect needs to ensure that the planning regulations are in accordance with the Council’s guidelines.

Permits and Documentation

Once the Development Approval (otherwise known as a DA) has been issued, it is time for the Architect and Engineer to provide the necessary documents to secure a building permit. At this point, many developers often assess whether they progress to construction or jump out and sell the property with plans and permits for a healthy profit, but without the risk of construction.

Construction

Once you have received the stamp of approval and you’ve decide to see the project through to the end, it’s time to clear the block and get your engineers and builders on site. Depending on the size of the development, this stage usually takes 8-12 months. Whilst the build is taking place, the Developer is usually working hard with the Agent to generate pre-sales and to sell as many properties as possible off the plan (which is attractive to many buyers due to the tax and stamp duty benefits).

Completion

Throughout the project and towards the end, you’ll be busy communicating with investors, generating sales, watching the budget and project plan, organising a body corporate (if required) and engaging your Solicitor to set setting up the purchase settlements. Near the end, you need to source your certificate of occupancy, builders insurance, body corporate insurance, landscaping and of course, organise a celebratory party once all of the sites have settled!

Closing comments Property Development is a deeply rewarding experience (beyond the financial benefits!), one that you’ll certainly feel you earn throughout the various stages, but ultimately it will be an opportunity for you to leave a legacy in a community and generously provide much loved homes to many local residents.

To learn more about our property development projects, we encourage you to visit our projects page at www.dovetaildevelopments.com.au

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Capitalise on the current real estate market with our 7 tips for buying an off the plan investment property

With winter and the Australian election now behind us, how do you snap yourself up a bargain before the market starts to regain some confidence?  Buying a property off the plan offers several advantages, the first one being that the price of the property is fixed at the time of purchase (perfect for current market conditions).  In addition, for those who are looking for ways to reduce your taxable income, this type of property investment will enable you to depreciate the fixtures and fittings and deliver a healthy return at the end of the financial year.                      

Understandably, many of us prefer to touch, see and experience a property before we handover our hard-earned cash, so today we’ve included 7 tips to assist you with purchasing a property off the plan: 

1.       Inspect the site

Even though the site may be a patch of dirt, an old run down house or car yard - take the time to visit the property site and check out the location.  Explore how close the site is to local amenities, shops and public transport.  Your visit will also enable you to observe other construction taking place in the area and create an opportunity for you to drop into the local Real Estate Agent to see the volume of rental occupancy rates and current rental returns. 

2.       Check the credentials of the Architect and Builder

Seek out the name of the development’s architect and builder and then jump online to research their portfolio of past projects, quality finishes and any reviews.  If you’re able to source the address of some of the past work, it may be worthwhile taking a quick drive to see how the development has aged over time.

3.       Review the Builders’ Insurance

It may sound like a painful task – but 12 months builders’ insurance vs. 7 years builders’ insurance will make all the difference if your development goes pear-shaped post construction.  Therefore, it is important to check that the project comes complete with all development and construction certificate requirements and the relevant levels of insurance.

4.       Get a guarantee for finishes and fixtures

The contract of sale should include a guarantee in relation to the finishes and fixtures post construction. Once again, take the time to review the details, as the last thing any buyer would want is being asked to settle prior to the development being 100% complete or finding cheaper fixtures and fittings than what was expected.

5.       Pay attention to the floor plan

Will you be renting out the property as soon as it is completed?  If so, to make your property stand out against the rest, it will require an attractive location within the block and a well-designed floor plan. Ideally, one-bedroom properties should be no less than 52 or 53 sqm on the inside with a balcony space of at least 10 sqm. Furthermore, pay close attention to where the lift and rubbish shoot is positioned on the floor to avoid noise and any unwanted smells during the summer months!

6.       Know your market

We would recommend that you look for a development in an area that holds a healthy balance of renters and owner occupiers. Furthermore, prior to purchasing an apartment off the plan, you should have a rough idea of the age demographic that you’re looking to attract and ensure that the development and location meets their needs.

7.       Carefully review the contract

It goes without saying, but it does make sense to have your Solicitor and Accountant look over the contract before you sign the dotted line. Key items to look out for are; the completion date, penalties if the buyer withdraws from the contract and what happens if the developer runs into a financial problem.

If you are interested in buying an investment property off the plan, we would encourage you to take a look at the projects page on our website (www.dovetaildevelopments.com.au) or give us a call on 1800 220 148 and we’ll show you how you could save up to $100,000 off your next off-the-plan property purchase.

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‘Safe as Houses’

The Benefits of Buying an Investment Property Through Your Self-Managed Super Fund (SMSF)

Following the GFC, it is no surprise that Australians are increasingly taking control of their retirement years by establishing their own self-managed superannuation fund (SMSF).  Over the last decade, the landscape of Australian superannuation has significantly changed, for example back in 2003, only 10% of all super money was held in SMSFs, however now 10 years on, SMSFs hold the greatest amount of money ($1.58 trillion!) and we have more than 500,000 self-managed super funds established across the country.

So, we know that many of us got stung over the GFC, but what are the other factors that are contributing to this shift?  Self-managed super funds are becoming a popular alternative for people who want to broaden their investment portfolios over a traditional managed fund, enabling flexibility to determine a strategy that suits your needs and provides control over your assets (not to mention, a reduction in management fees).

Furthermore, given the volatile market conditions, the saying ‘safe as houses’ could never be more true.  Yes, the property market has also felt the pinch over the last few years, but for those who are looking for a growth strategy that will provide a stable return over a period of time, buying an investment property through your SMSF, whilst the market is low, could look to provide fruitful returns in the future.

Interested in learning more?  Below are some of the financial benefits of buying an investment property through our self-managed super fund:

1. Rental Income Tax

For SMSFs the maximum rate of tax you will pay on your rental return is 15%, and if you are in your retirement years (the pension phase), this rate will drop to 0%.   This compares to a maximum tax rate of 46.5% for those of you who have an investment property in your personal name and are currently a high income earner.   This benefit means that a larger proportion of the rental income ends up in your back pocket, rather than with the tax man, which enables you to repay your loan and build your wealth in a shorter timeframe.

2. Capital Gains Tax

Similar to the rental income tax, there are also benefits for capital gains.  For investment properties purchased through a SMSF, the maximum gains payable is 10%, provided that the property is held for more than 12 months.  Once again, if the property is sold in the pension phase, the capital gains rate will drop to 0%.

3. A reduction in fees and commissions

As we all know, professional funds charge us a range of fees and charges from annual interest rates, service fees to commissions, and when they’re not monitored carefully, these can all mount up.   By managing your own self-managed super fund, one can exercise control over the fees that are paid.  By carefully choosing your investments and transactions these ongoing fees can significantly be reduced.

4. Investment flexibility and diversification

It goes without saying; SMSFs offer greater flexibility and allow you to decide how you manage your fund and what assets you decide to invest in.  From a property perspective, a SMSF can acquire basically all types of property, including residential, commercial, office space, factories, vacant land and land lots.  The trustee has the option in setting the investment strategy and asset mix.  Since it is self-supporting, you can monitor and review your investment strategy anytime you want.  Therefore, ultimately you are in control of your own retirement.

5. Create a cashflow investment fund

When you hit retirement age, any income from your investments (i.e. rental income) can be withdrawn, tax-free.  We know from our research at Dovetail, that following 30 years of work on an medium salary, the average Australian’s superannuation funds will equate to $180,000, however to live comfortably a couple requires $56,339 per year (in today’s market).  Given our aging population, it is critical that we structure sustainable superannuation strategies, and investing in cashflow property through your SMSF, is certainly one smart option.

If you’re looking to find out more or if you would like to view some off-the-plan opportunities to purchase an investment property through your SMSF, contact us at www.dovetaildevelopments.com.au or call Cam Bloomfield on 1800 220 148.

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Build Your Wealth Through Property Syndication

Have you heard of the saying “power in numbers?”  To simply put it, property syndication is a form of property investing that follows this philosophy. 

This property and capital investment strategy, allows for the pooling of resources and expertise, and for those who are just starting to dip their toes into larger scale developments, it is an opportunity to take a backseat, observe and learn but at the same time, reap the rewards of cash flow and the various tax benefits.

Historically, property syndication in Australia has centred around commercial, retail and/or industrial investments, however there are opportunities out there available to smaller investors who have a limited amount of capital to invest (even as small as $50,000). Furthermore, following the Global Financial Crisis and the impact it has had on Australian’s superannuation funds, many are now taking hold of their own future, setting up a self-managed super fund and seeking out capital investment opportunities, such as property syndications to regain their retirement savings.  

But like any other investment project, doing your due diligence and research are crucial elements before deciding to take the plunge into a property syndication investment.

Before you dive in, here are some tips to ensure a smooth entry into your first project:

clarify whether you are required to give a personal guarantee as part of the project – seek out advice from your solicitor and accountant about the risks and have them look over the paperwork

do your due diligence in relation to the developer, project manager, architect and builder – check out their experience and qualifications in managing similar projects

be knowledgeable about the type of property syndicate (i.e. retail, residential or commercial) and what is the long-term strategy

thoroughly understand the timeframes - if it is a long-term investment, your capital could be stuck for fixed period of time (i.e. a number of years).

Other pertinent questions to ask are: what are the policies affecting the syndicate’s operation? Are there any recent regulations that could affect the viability of the project? Are the return rates fixed or variable? What are the costs involved, management, insurance costs? How much is the exit fee if one is to drop his share in the syndicate?

It may initially sound daunting, but provided you do your homework, you will not be disappointed in the benefits.  From my personal experience, property syndicates have delivered exceptional results. My first project in Auchenflower, QLD delivered over $1 million dollars in profit for its investors (to learn more, check out my article in the September 2013 edition of Australian Property Investor), and our second project in Salisbury, QLD returned $890,000 (visit the projects page of our website at www.dovetaildevelopments.com.au).

If you are looking for a property syndication project or would simply like to take control of your retirement funds through a self-managed super fund, contact me on 1800 220 148.  Benefit from the ‘power of numbers’ and contact us today.

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Rise to The Next Level – The top 3 Benefits of Property Development

Have you tackled a few renovations, perhaps built your own home and/or invested in the odd property? If you’re passionate about property and are ready to springboard yourself into your next project, perhaps it is time to seize the opportunity and explore becoming a passive property developer?                        

Many people shy away from the next level, however there are a number of ways you can be involved in a development, learn the ropes but minimize the risk (speak to us if you would like more information).  To whet your appetite, today we thought we would share with you the top 3 the benefits of becoming a passive property developer.

  1. Healthy profits and the ability to  buy property at wholesale prices

Capitalize on buying property under-market, without the fat built in for developers, real estate agents and/or project marketer’s commissions.   Particularly during the current market, you can make a healthy return in 12-24 months if you’re building a townhouse, or 18-36 months if you’re undertaking a larger apartment project (assuming you need to apply for a permit – if a permit is secured the time frames can be expedited).   At the end of the project, you can decide to either sell for a profit or hold, to benefit from the rental return (it is one of the very few ways you can source positively geared properties in Australia’s capital cities!).

  2. Build your own legacy and help Melbourne’s growing population

The Australian Bureau of Statistics (ABS) has observed Melbourne being the fastest growing Australian capital for the last 11 years, and it is anticipated that by 2050, Melbourne’s population will have reached between 5.6 and 6.4 million.  To compensate for this growth, it means that property developers will not go out of business anytime in the near future! 

Once you have one development under your hat, you can use this as leverage and continue building on your portfolio. Extending your legacy throughout your city and creating a great nest egg for you and your family.

  3. Set yourself up for success – with tax & finance benefits!

A big benefit of property development is the tax benefits, holding onto the property and depreciating its value over time, will certainly help your end of financial year tax bill (particularly if you’re still working in full-time employment). Furthermore, for those who have been in the game for awhile, they will benefit from high loan to value ratios and an ability to access a wider range of finance options and loans (which is advantageous given that the banks are currently tightening their belts and approval rates).

We hope these top 3 tips give you insight into the benefits of becoming a passive property developer.  However be beware, like all things with great benefits there are always associated risks, so be sure to set yourself up with the right knowledge, network and team before you take the plunge.

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Looking to join the BRW rich list We’ll point you in the right direction

Recently, whilst flicking through the pages of the 2013 BRW 200 Rich List, one theme became apparent – once again, the property industry has dominated the charts, with 52 out of the 200, having made their fortune from dirt, bricks and water!

The bumpy market conditions appear to have had no impact on Frank Lowry, who finished the 12 month period ranked second behind Gina Rinehart on $6.87 billion (up by $400 million from 2012).  Lowry, who largely made his fortune through the commercial retail business, the Westfield Group, is one of 18 individuals who can celebrate being listed on the BRW list every year for the past 30 years.

Another veteran, Harry Triguboff, a private developer of residential apartments, secured sixth place this year, sitting comfortably on $4.95 billion (up by $100 million since 2012), and John Gandel, property developer of commercial real estate and shopping centres, was ranked eighth on $3.7 billion (up by $350 million from 2012).

One of the more exciting stories to surface from this year’s results, is Chinese-based property developer Hui Wing Mau, who debut the list in seventh place, with a fortune of $4.82 billion.  Hui Wing Mau, who owns an Australian passport, making him eligible for the BRW list, is described as being one of the largest property developers in Shanghai, and he’ll certainly be one to watch over future years.

So, how do you join Lowry, Triguboff, Mau or Gandel? Or perhaps just secure a small piece of the pie?

The property industry spans from apartments and units, to house and land packages, commercial, retail, industrial and office space (to name a few!),  therefore, if this is your first project, you may like to start small and scale up.  One safe and profitable first time project is subdivision; you can either buy a property with subdivision potential or subdivide the property you already own. 

In short, property subdivision involves splitting a block of land in half (or thirds depending on the size), creating a new title and using the vacant land to develop a residential dwelling (i.e. unit or townhouse). As a result, you can either hold the property to generate rental income or sell the property for a healthy profit. 

In the current market conditions, subdivision is a great money-making strategy. But similar to all ventures, it requires the appropriate knowledge and professional advice from people who are experts in subdivision and property development.

If you’re interested in finding out more, contact Dovetail Developments on 1800 220 148, or visit www.dovetaildevelopments.com.au to download a free subdivision report.

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94% of people will not have enough money to retire - will you be one of them

After 40 years of early mornings, busy commutes and working hard for our cash, surely there comes a time when we can comfortably put our feet up and retire? 

For most of us, when we reflect upon our later years, we envisage packing up the Winnebago, travelling around Australia, or perhaps jet setting away to absorb the history of our ancestors.   

Although, unfortunately recent studies have shown that this is not the case for many Australians.  For the majority (94%), retirement does not guarantee a comfortable lifestyle and instead it requires us to survive off welfare and/or the support of our families.

As you know, running a household is expensive and we all live within our means, however as we get older medical bills and housing support, such as retirement villages, put a real strain on our back pockets. 

Naturally, when retirement approaches a shift in spending habits is required.  So before that time comes, we need to have a robust plan. To ensure a stable retirement, it is wise to set up a passive income stream to supplement your superannuation and provide a disposable income in your later years.

Unlike shares and the stock market, property is a safe and steady asset class that will help alleviate financial concerns and allow you have a regular income and security to support your ideal lifestyle.  

Retirement does not need to feel like a ball and chain, holding you back from your lifelong aspirations, setting yourself up early will enable you to live out your retirement years and comfortably join those in the top 6%.  So, what are you waiting for? Best to start planning for the best years of your life today!

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Point of Difference between NRAS and Normal Property Investment in Victoria

Positively geared investments that support everyday Australians

The National Rental Affordability Scheme (NRAS) is not public or social housing, but a win-win solution for property owners and tenants alike.   

The key difference between standard property investments and those under the NRAS scheme are the tax benefits.  In exchange for a new property, leased below market rates, property owners are able to gain access to tax free incentives, including property expenses, non-cash deductions and allowances, which are usually not applicable for normal investments.

The attractive scheme plans to deliver 50,000 new affordable properties by 2016, directly targeting low to medium income earning families.  NRAS tenants are identified by passing a number of eligibility requirements and their potential to be good tenants.

Like all investments there are considerations and risks, not all NRAS-approved properties are guaranteed to deliver healthy returns.  For landowners, it is essential to remember that the property needs to be a long-term investment and priced appropriately. Therefore, to avoid any shortfalls, make sure that you buy from reliable professionals.

To learn more, see our ‘Key Facts about NRAS’

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KEY FACTS ABOUT NRAS

What is NRAS?

·         NRAS stands for the National Rental Affordability Scheme

·         In July 2008, the Australian Government announced a 10 year pledge to the Scheme

·         NRAS is available in Australian capital cities and some regional areas 

  What are the objectives of NRAS?

·         To deliver approximately 50,000 rental dwellings for low to middle income families by 2016

·         NRAS is an alternative to government housing, whereby private property owners can benefit from a tax incentive and provide quality housing below market rental rates

·         The scheme aims to support those families who have an annual income of less than $108,169 

  What are the benefits?

·         Private property owners will benefit from:

o    a positive cash flow investment

o   tax incentives (either being a refundable tax offset or a grant)

o   good tenants who have been assessed against an eligibility criteria

·         Properties can be purchased under a self-managed superannuation fund

·         Tenants benefit from having access to new properties, 20% below the average rental market 

  What are the considerations?

·         The property is committed to the Scheme for a 10 year period

·         It can be sold, however the new purchaser must agree to apply with the NRAS obligations

·         The property must be new or not previously used as a residence

·         Multi-storey developments can consist of a combination of NRAS and non-NRAS apartments  

  Would like to know more or invest in a NRAS property?

·         Contact Dovetail Developments on 1800 220 148

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Gold! Right in your backyard - Your quick guide to reap the gold you did not know exists!

  Did you know that gold could be right under your nose?

Forget your shovel, pan or treasure map, just follow these 3 steps:

1.    Find a property that has subdivision potential in the backyard.

2.    Learn how to subdivide, sell your backyard and convert it into a profitable venture

3.    Align yourself with the right team of professionals  

Before you head off on your expedition, let us explore each of these steps in more detail:

Backyard for Cash

If you find a property that has a subdivision potential in the backyard, you are already halfway through your “gold-hunting” journey towards success!

But to ensure that you reach your end goal, we have two words for you; DUE DILIGENCE.

Due diligence is a crucial element between success and failure when you are planning to subdivide your property safely. Remember that subdividing properties isn’t always straight forward; therefore you need to make sure that you avoid the risks.

There are nine known pitfalls to avoid when subdividing your property. (1) Location of your property, (2) Easements, (3) Setbacks, (4) Services, (5) Ascertaining the Right Costs, (6) Frontage, (7) Topography, (8) Shape of Site and (9) Neighbours and Neighbourhood.

Be sure to equip yourself with the right knowledge and experience in advance, to enable you to dodge the landmine of subdivision risks and pitfalls.

What do you need to know?

Before you kick start your project independently, below are some of the questions you should confidentially know how to answer:

·         What are the subdivision regulations in your local area?

·         Do you meet the zoning, easement and setback requirements?

·         What are the challenges you may face when it comes to services?

·         Will it be more profitable for you to build or sell the block vacant?

·         What costs will you need upfront to complete the project and how long will it take?

·         What are the definitions of the common terms used in property development?

·         How do you find a trusted network of builders and town planners to complete your project?

Brush Elbows with the Right Team!

Having the right team could make or break your quest to strike gold from your own backyard. Team up with experts who will be equipped with the answers to the questions above (and more!) to remove the stress and make your subdivision project a reality. They will hold you by the hand, pan out any complexities and help you find your gold! 

With the right support, the only question you will need to worry yourself with is, how will you spend the profits?

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Convert Your Property, Convert Your Life

Recent statistics show that approximately two thirds of Australians own their own home, however with the rising cost of housing many Australians are seeking alternative property strategies to expand their portfolio and create profitable investments.

What is unknown to many is that one in five people have a solution sitting dormant in their backyard. Subdividing may sound tedious for a rookie developer, but it is actually a very profitable project that can convert your life and provide a healthy amount of revenue, or alternatively, a passive income stream, particularly during retirement.

To determine whether subdividing your property is the cashflow solution for you, make sure you read our “7 Steps on How to Safely Subdivide Your Property to Success”, a comprehensive guide that takes landowners through the steps in relation to how they can manage a subdivision project safely and deliver a rewarding outcome. Like all projects, it is important that landowners are aware of the potentials risks associated with planning a subdivision to be able to manage them and avoid falling into any pitfalls.

Furthermore, it is essential that a subdivision project be undertaken with expert advice, although a DIY approach may be done, to minimise lengthy delays, frustrations and risk of failure, it is highly recommended that you engage a team of experts. Some tricky aspects of the project include; local council regulations, tax implications and technical specifications when subdividing properties, which can all be taken care of by a team of professionals.

  Subdividing a property will bring great returns if done right, whether landowners are just looking for extra income, preparing for retirement or are searching for ways to maximise their property, subdividing is a solution to each of these scenarios. Why hold off the potential of making extra money? Convert your property today! 

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From Backyard to Bliss – Dovetail’s Success Stories

Have you ever dreamt of…

·         Breaking free from the daily grind and the shackles of your office cubicle?

·         Comfortably retiring and perusing a lifelong goal?

·         Starting your own business or spending more time with your grand kids? 

·         Taking that Europe tour you have been imagining all these years?

If you said yes to any of the above questions, you may resonate with some of the stories below.

Success Story #1

Michael and Christine a couple from Frankston decided to subdivide their 656m2 property to grow their nest egg for retirement.  Despite doing a little research themselves and feeling nervous about reducing their land size, the couple went ahead with their decision to sell their backyard. “We did not realise what we were getting ourselves into,” Michael said,” Some friends had mentioned that they knew someone who had completed the process themselves, so we pushed on, but not properly guided, “twelve months later, we were still going back and forth with the local council”. Feeling confused and overwhelmed by the process, we were referred to Dovetail to get some expert advice on an easement issue that we were having problems with. Dovetail took over managing the project and within months we had our permit, and we decided to sell the vacant land to release our profits!

 Success Story #2

Sue and Bob a couple from Mitcham, had purchased a number of investment properties over the years and knew about the many benefits of holding real estate investments. They wanted to subdivide their property at their primary residence for a long time, but both juggled busy full time jobs it was difficult to find the time to research the various steps. “We contacted Dovetail and they made the process easy for us.” “In 8 months, we had our title, Dovetail was very proactive in communicating the process and timeframes throughout the project, which enabled us to plan ahead and lock in a well-deserved break and enjoy a trip of a lifetime to Europe”.

Success Story #3

Hoang, a resident from Springvale, had accumulated some debt and was unsure how to gain equity from his property of 15 years. “I had the land, but no money to pay for the works. Dovetail agreed to cover the costs. I can remember receiving the call from Dovetail letting us know we got our permit, it was such a relief. We sold off the back block and used the capital to pay off all our credit cards. “I’m so grateful as I’ve been able to quit working my second job and I am now able to spend more time with my family”.