The market has definitely changed, interest rates and lending have changed and the ways to make money from property have changed BUT has your Property Strategy changed?

It’s essential to review where you are at, improve and add value to your position and put a property game plan together for the rest of 2012… It can be the difference between retiring with some wealth or truly setting yourself up with the financial freedom to really enjoy life and leave a lasting family legacy!

That is why we created a 100% free yearly service for you to do just that… It’s called a Property Strategy Session

Based on feedback from Perth investors…

When I first offered this service to our clients 6 months ago, I was blown away by the feedback and everyone’s situation was completely different! Plus over 85% of investors surveyed said that they received at least $500 value from the session!

Here is some feedback received on my last Property Strategy Sessions…

“After a few bad investments we had lost our motivation and just weren’t moving ahead. After our Property Strategy Session with Jarrad we now have a clear picture of what needs to be done and the motivation to do it.” – Sue Martin

“Thoroughly impressed with the service you provide. Investors Edge have always gone that little bit extra to please me.” – Andrew Palmer

“It was a very insightful, informative and ‘personalised’ session that went one step further than information provided by other property sales/marketing experts.” – Jae Rhee

“Jarrad was very insightful and together we hashed out some great ideas to take us forward in 2011, when initially I thought we were limited due to the stagnant market.”- A.Walkom

We only have 10 spots available per month

It usually takes us 2 hours to prepare for each session and at least 90 minutes to meet with you to debrief and formulate an action plan… So we can only offer 10 strategy sessions each month.

So to secure your spot all you have to do is register below now.

So how can a Property Strategy Session help make 2012 be your best year of investing ever?

1. We will give you deep insight into where your property now sits in the rental and sale market.
2. Together we will develop a plan to improve the return and value of your property to unlock potentially hidden capital gains and cash flow.
3. Take you through the property multiplier process, showing you how to start and safely multiply your property portfolio.
4. Work out the right strategy and property type to add to your portfolio and timing to suit your current situation and future goals.
5. Help you overcome any property investing obstacle that stands in your way.

Register your interest for a Property Strategy Session below now

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A skill every successful property developer requires

Working out what a development property is worth is one of the skills successful property developers MUST acquire. To work out a property’s value TO YOU, the property developer, you need to start at the end, or as I like to call the process “Reverse Pricing”.

Doing the numbers, start at the end

Whether you intend to build, renovate, subdivide, or just create vacant land, you must first get a fair idea of the properties improved or finished market value in today’s market place. What are the pieces of land worth today, what is the renovated home likely to be worth today, etc.

To work out today’s values, you’ll either need a relationship with a good looking real estate agent (such as yours truly), or access to reliable and recent sales information – rp data membership is ok, but I prefer REIWA statistics you can get via a real estate agent. If you have neither of these then I suggest you search the reiwa and or realestate websites in the suburb your are considering investing in and call the dominant agents in that area, and pick their brains on the property types, possible values etc for what you are considering creating.

By working backwards, you start your calculation from the properties improved market value subtracting back your required profit (the most important part because we are not investing without a profit) and all of the costs to develop create the property to that point, including purchase and holding costs… this leaves you with your maximum purchase price. This is what you can actually pay for the property and still make your profit.

Let me give you an example

LIVE EXAMPLE:  Kelmscott potential 5 unit site – for sale $310,000

This large 1,188sqm block of land in Kelmscott with a 2×1 timber home returning $280 a week in rent, has the development potential to create a maximum 5 villa site, each villa being a 3 bedroom 2 bathroom design with double carport. Each proposed block would be roughly 200sqm each, each villa being approx 130sqm under roof, double carport 1 living area, with a probable sale price in the vicinity of $309,000 each. So your final sale price is:

$309,000              per villa x 5 Villas

=$1,545,000       (A) GROSS INCOME

Once we have a value of what the final products are (in this case five 3×2 villas) and we know what they will likely sell for in today’s market, we can work backwards, taking out all the costs to create the 5 villa’s, starting with – our profit.

COSTS

$309,000              20% gross profit on total deal

$50,000                 Selling Fees for each villa, including advertising and Legal fees

$750,000              Building costs of $150,000 each villa x 5, includes finishing costs

$30,000                 Demolition and site clearing costs

$75,000                 Site works, subdivision costs, connection fees etc $15k x 5

$25,000                 misc & or holding costs (more or less depending on how much money you are borrowing

= $1,239,000           (B)

A – B = $1,545,000 – $1,239,000           = $306,000

The figure of $306,000 is what you can afford to pay for this property (less stamp duty), if you are looking for a 20% gross profit (before interest and tax).

Another example with a lower total outlay

Most investors I know are a little uncomfortable with $1.2 million dollar deals, so I’ll use the same process to decide what to pay for a smaller, sub divide and retain property. However, I am going to use a lower profit figure of 10% versus the 20% profit previously. The reason being is that as more people can afford a cheaper development deal there is usually more buying competition, so the returns tend to be less as the risk of holding that much development cost is also less.

LIVE EXAMPLE:  Forrestfield, retain and sub divide 3×1 home – for sale $389,000+

This is a 3 bedroom home in need of renovation with the potential to retain the existing home and create a 440 sqm block at the rear on a 1,000 sq.m block zoned R20.

FINAL SALE PRICES

$325,000              Front 3X1 on 440sqm – fully renovated

$165,000              Rear 440 sqm block of land

$490,000             (A) GROSS INCOME

COSTS

$49,000 Profit  10% of gross value

$18,000 Selling Fees for a house & block + advertising and Legal fees

$25,000 Renovation costs

$15,000 Demolition and site clearing costs

$20,000 Site works, subdivision costs, connection fees etc

$15,000 misc & or holding (interest costs)

$142,000              (B)

A – B = $490,000 – $142,000 = $348,000

So in this case you would have $348,000 (less stamp duty) to spend on this property.

Further info & assistance

If you would like to know more about the process of subdivision make sure you join our community update now and stay informed of dates for one of our next Subdivision Seminars.

Plus if you would like my assistance with purchasing or maximizing the profits from any sub dividable site in Perth, I am available on my contact details below.

The number of properties on the Perth market seems to have stabilised over the last 3 months at just under 14,000 properties for sale, which is still a buyer’s market.

The active buyer groups in the market over the last 3 months have been families looking for 4×2’s homes in the price range of $450k-$550k and the first home buyers between $400k-$500k looking for units in inner suburbs less than 10km from Perth.

In general buyers that are looking further than 15km from the city at properties priced less than $350,000 are struggling with affordability and the supply of property in these areas is continuing to increase month on month, causing prices to soften.

How might the drop in interest rates affect the Perth Market?

With the drop of interest rates this week contrasted with ever increasing rental prices we may see some buyer demand return to this segment of the market in the coming months.

Buyers at prices above $600,000 are still thin on the ground but if demand from first home buyers increases, the demand from sellers who up-grade will extend into the higher pricing points.

As tenants move from the rental market to home ownership this will start to decrease pressure on rental prices.

Proof of life from property investors

The biggest change over the last month is that investor activity is starting to come back, where it has been virtually non-existent for the last 4 years. Investors are being attracted by the increasing rental yields and greater confidence in the Perth job market being backed by a new mining boom.

There is a combination of interstate and overseas investors in this mix, and they are being more decisive and can see the bigger picture of how well off and well positioned Perth is.

I have been asked to speak in Singapore in May at the Australian Property Symposium conference… and foreign investors are very hungry for Perth and Sydney property markets.

Will demand from investors be the tipping point?

I believe that a renewed demand from investors will be the tipping point to bring us back to a balanced market. Watch this space for updates and if you are considering a purchase don’t be left wondering what happened, arrange a strategy session with me now by contacting me on my details below.

Perth Rental market running hot!

It has only just started appearing all over the news but the rental market has been running hot for the last 4 months. We have adjusted our approach to now setting our asking price as a rental range. Typically pricing in a $40 range from where we think the market price is at. In one case over the last month we had a quality tenant pay $100 over market rental price just to secure the property, but applications at $20-30 over market price is becoming typical. Make sure your property manager is including a clause to be able to review the rent at the 6 month point of 12 month leases so that you can keep up with the market movement.

There is always room for improvement

This month we carried out the most extensive survey we have ever done to explore all aspects of our service and see how we can improve the experience for both our tenants and our landlords. Denise and I have just sat down for 4 hours today going over every response and we wanted to share some of the insights here with you and some of the areas we have immediately taken action to improve.

How do our current landlords feel about our Property Management service?

It was really encouraging for us to see that we had over 75% of our clients that were very satisfied or over joyed and 86.4% were happy to refer others to our service. It was also great to hear from the one dissatisfied client, enabling us to correct the communication issues that existed in that instance. We aim to further improve our systems and processes, keep ever focused on proactive communication and the the one per-centers that over a year add up.

What factors of our service do our landlords value the most?

How do our current tenants feel about our Property Management service?

Our tenants are just as important to us as our landlords… many people don’t realise that although having a property portfolio, I myself am a tenant of a property (not under our management). Here we found that only 2 of our tenants surveyed felt that they were dissatisfied with our service and in each case they were renting properties we had just taken over the management from another property manager. We are looking forward to giving everyone the respect and service they deserve.

Key areas for Property Management improvement as identified by our landlords & tenants

Our Service Structure- With the changes in our service structure many clients wanted clarity as to how the roles of the team are now defined. We have immediately sent a thorough outline of the roles and responsibilities of each of the team to all tenants and owners.

Proactive Communication- We have had feedback on incidences of phone calls and emails not being returned in a prompt enough manner. We have recently implemented our proactive communication guarantee, please ensure your manager returns all calls or emails within the same business day or we will pay you $100.

Monthly Statements- Landlords wanted to know if there was any way we could make our monthly statements any clearer to read. We are looking into other formats available from our software provider.

Routine Inspection Feedback- Landlords wanted to receive a phone call with feedback on their properties routine inspection. We have now made it part of our process to call every owner within 24 hours of the inspection, leaving a message if contact is not possible.

Owner & Tenant Online Login- We received feedback that some clients were not yet able to log into their online accounts to view statements. We are planning to notify all clients of their user names and the process to log in to view their statements.

Our Service Area- Many owners wanted us to service further south and north of Perth and in other states. We currently manage in 87 suburbs, having a criteria for what properties we are prepared to manage… however over the next 12-24 months we should be in a position to extend our Perth service area.

Congratulations to the lucky gourmet hamper winner!!

Every client who completed our feedback survey went into the prize draw to win a fabulous gourmet hamper packed full of goodies, books and gift vouchers to save on our service and go out to dinner on us. Watch this video now to see who won…

A BIG Thank You to our clients

We truly value every landlord and tenant and appreciate the time each of you took in helping us to make our service better for you. We are not infallible and if our service is ever below your expectations please let us know so we can correct it.

Current properties For Sale

We are fast becoming the go to for Perth property investment and as such we are securing more and more investment opportunities that are not on the open market but we have gained permission to make them available to our clients. Properties are searchable by area and price and we will soon be adding a rating and criteria system so that you can easily see at a glance the strengths and weaknesses of the investment… yes every property investment has trade offs!

Current properties For Rent

This is a great resource for our current and prospective tenants who are considering a move and favor the experience of renting through Investors Edge, knowing that they will at all times be respected and valued.

Check the sections out now

You can browse the property sections under the Investing, Buying and Property Management tabs on our website.

Let us know your feedback below

Have an idea for how we could improve our new property sections, leave your suggestions in a comment below.

How would you cope?

You have a mortgage to keep paying, no income from the property, massive repairs to make if that is even possible… Your stomach churns as the panic of not knowing where to start sets in.

This actually happened to one of our landlord’s

One of our Landlords received a call exactly like that and the extent of the damage is clearly evident in the photos included.

Experience counts

The Property Management team at Investors Edge was able to draw on its massive depth of experience to comfort the owner, reassure him that the arsonists had inadvertently done him a favor, and then get on with dealing with the insurance company claims on his behalf.

By providing our Landlords with information and guidance in securing the best possible insurance policies to protect their rental properties, they are able to rest easy knowing that their investment properties are in safe hands.

A silver lining to an initial black cloud of smoke

In the case of this property, the owner received a payout on the insured value of the building PLUS 52 weeks rent. By increasing his mortgage by only a small amount he was able to re-build a lovely new house of much greater value than the old one, claim higher depreciation for years to come and attract a much better quality of tenant at substantially higher rent , his previously negatively geared property is now positively geared and putting money back in his pocket each week! What a fantastic silver lining to that initial black cloud of smoke.

Check your insurance now!

Please check your own insurance policies – read the PDS’s, as tedious as it is and make sure you really are covered for everything you need to be. Compare companies and don’t be afraid to move if you find a policy with better coverage.

At minimum, you should have a building policy and a very good Landlord Protection policy.

Plus remember that despite having all the insurances in the world, you need a Property Manager that has the experience to deal with any situation because there are many risks for landlords in owning investment properties.

With so many loan products available you can be sure there’s at least one that matches your situation. In your hunt to track down a suitable mortgage, here are a few points to keep in mind.

How much should I borrow?

Banks will determine how much they are willing to lend you based on a number of criteria; however, that doesn’t mean you should take the maximum amount they offer. Closely examine your finances to determine what you can afford to spend. Be honest and work out a realistic budget, factoring in all regular commitments, such as school fees, car payments, and food, as well as all those entertainment expenses. What’s left can be channelled into any mortgage repayments.

What type of buyer are you?

Your personal situation will determine what mortgage suits your needs, as well as what type of products are actually available to you. Are you a first time buyer, for instance, or are you refinancing an existing debt? Perhaps you’re looking for solid capital growth in an investment property or the home you’ll spend the rest of your life in? It’s important to consider why you’re buying and finding a mortgage that complements that.

Do your homework

Speak with your mortgage broker – they’re in a great position to help you compare different loans and lenders to see how they suit your circumstances. Decide what loan features you require to meet your objectives – for example are you looking for flexibility to pay off your mortgage quickly? – and then go in search for a suitable deal. Some of the most common loans that may meet your requirements include:

• Fixed rate - can help soften impact of any future rate rise
• Split rate - offers the security of fixed rate with the flexibility of a variable rate
• Line of credit - good for financing renovations or additional property investments
• Lo-doc - for the self employed, usually require less documentation, such as establishing proof of income
• No deposit - can’t save for a 20% deposit? This loan will let you finance 100% of the purchasing price, although usually with a parental guarantee
• Interest-only - popular for investors who don’t want to pay the principle component of a mortgage. Usually lower repayments amounts, leaving room to pursue other investments
• Construction - for additions or building your own home

There are a range of tools now available, such as the internet, to help research, compare and contract loans. For many borrowers, however, lending advice from a broker is the easiest and usually most effective option for avoiding confusion and finding an appropriate loan for your needs.

Trade in your old Perth Property Manager now!

What do you do when your old car isn’t performing, costing you heaps on fuel and giving you nothing but headaches?… It’s not just wasting money but it could be putting your safety and health at serious risk!

Trade in the old for an upgraded model with the latest safety, efficiency security & features

If it feels like your Property Manager isn’t performing and doesn’t have the experience or features to avoid the rental pot holes and hazards, your property and money are at risk!

If you have ever experienced…

• Poor communication
• Bad service
• No initiative
• Not a property investor themselves
• Bad follow up on maintenance
• Long vacancy periods
• Property damage
• No support or expertise to take your property investing to another level

Trade in to Perth’s Low Risk Property Manager at Investors Edge Real Estate…

Where you will experience…

• Proactive communication with same business day call or email response or we pay you $100
• 100% service satisfaction with issues immediately resolved or we refund your last 90 days of fees
• Highest service from REIWA Property Manager of the year for 2010/11
• Property investors who understand your needs and exceed them
• High level investor assistance and yearly strategy sessions

We will pay your trade in costs!

Trade in your old Property Manager this month by upgrading to Investors Edge Real Estate and we will pay up to 1 year’s termination costs to your old manager so you can be released from your contract (conditions apply, limit of 5 trade ins per month).

You may think that it’s crazy to potentially pay thousands of dollars to our competitors just to get your business but we know that once you have experienced our superior Property Management service, you will never look back… only forward to empowered property choices.

Discover whether Investors Edge is the right property manager for your Perth investment

At Investors Edge, we believe we are the best team to work with you on all your property management needs however we don’t expect you to believe that right away. This is why we offer a FREE consultation as an opportunity to meet with our team of experienced property managers so you can get a feel for our processes and dedication to our clients to determine whether we’re the team to handle your property management or not.

During our initial consultation if we sense we may not meet your exact expectations or cannot deliver the service you require there is no obligation to proceed. We strictly only deal with clients who feel we are genuinely the best property managers for their Perth investments.

Call 9472 1606 or email Justine at justine@investorsedge.com.au and experience the difference a reliable property management agency has on your investment.

Only 5 trade in spots available this month

Limit of 5 trade in spots available this month, phone or email Justine Valender our trade in specialist to discuss your options now on 0416 081 692 justine@investorsedge.com.au

Or request more info below now!

Name:

Email:

Phone Number:

Suburb:

Requirements:

We respect your email privacy

• Develop a clear plan to suit your situation, skills and resources
• Buy in the right suburbs to maximise your chance for strong capital growth with increasing rental demand
• Understand the trade offs of any active investing strategy (renovation, subdivision, building, developing) and which one best suits you
• Understand your strengths and combine with others to make up for your weaknesses
• Discover where your hidden mental blocks are so that you can focus on overcoming them
• Leverage a team of property professionals around you so you don’t have to know it all or do it all
• Plus much more…

Who is the Property Multiplier seminar for?

Anyone that wants to invest in property with a proven process, which is relevant to investors with all levels of experience, assisting you in going to the next level with your investing.

At the 2 hour seminar you will receive:

• A work book containing the step by step property multiplier process
• Access to a team of highly skilled property professionals
• Action steps to get through your current mental blocks or financial challenges
• Invitation to our online Perth Property Forums for assistance
• A copy of Smart Property Investment Magazine valued at $8.95

“Jarrad is an easy-going and incredibly engaging real estate professional. I would recommend anyone with property to buy this man a coffee and pick his brains for your best strategies moving forward with any portfolio – whether it’s a brand new idea or an established array of properties.” – Aaron Sice

Details of the next Property Multiplier Seminar:

When

6:15pm-8.30pm , Tuesday 15th May 2012

Where

Investors Edge Real Estate Office, Unit 2 1808 Albany Highway Kenwick. (Corner of Austin Av & Albany Hwy – opposite Bunnings)

Limited places

Spots are strictly limited to 12 so register below now.

Register Now!

No Perth Property Manager is infallible and sure we are certainly not perfect either but the difference is in how we address issues quickly when they occur and really care about getting it right. It’s usually not just one reason that prompts an investor to change manager but a whole bunch of small reasons that add up over time.

What do you expect from your Perth Property Manager?

Here is an insight into just some of the reasons that our new owners have decided that it’s time to change who looks after their most important asset.

• Do you feel like you never hear from your Property Manager? [Yes/No]
• And when you do is it always bad news? [Yes/No]
• You never receive the routine inspection and property condition the reports you pay for? [Yes/No]
• And when you do they are vague and don’t contain any photos [Yes/No]
• Does your property Manager forget to conduct 6 monthly rent reviews? [Yes/No]
• When they do increase the rent it’s not based on recent rental data and current market price but plucked from the sky? [Yes/No]
• Does your tenants late payment of rent get left too long before anything is done about it? [Yes/No]
• Do you never receive a copy of your tenants lease? [Yes/No]
• Are your leases being re-signed after their expiry date? [Yes/No]
• Is your property manager dragging their feet on maintenance issues, resulting in them getting worse? [Yes/No]
• Do they not seem to care or even think about improving your property returns? [Yes/No]
• Do they have no clue about property investing and cant help you to actively add value to your portfolio? [Yes/No]

If you  answered yes to more that one of the above questions you are not alone and it is probably a good time to look for a new Perth Property Manager.