I thought property investment was for high-income earners or the  wealthy?

Statistically in Australia, over 70% of property investors are on incomes between $35,000 and $40,000 per annum. Over 90% of all millionaires become so through investment in real estate.

"It's not how much you earn that counts, it's what you do with what you earn"

What if I have no deposit for an investment property?

What you mean is that you have no cash deposit. Cash is not really necessary when you have equity in your own home. Having sufficient assets against which to borrow is all that is required and in this way, you can borrow the full amount plus all the additional costs.

Historically, what happens investment-wise with residential real estate?

It is the compounding effect of property value increases which is so powerful. As each year passes growth occurs on top of growth. If a property is worth $100,000 today and next year it increases in value to $110,000, then the year after that if it increases at 10% again the value will be $121,000, that is $110,000 plus 10% (or $11,000) and on goes the escalation. Its exponential growth accelerating at a faster rate as each year passes.To use a well worn gardening analogy, it is a little like planting a tree. Early growth is slow, but as it establishes itself it grows faster, and starts to fruit. The fruit drops, and more trees grow and start bearing fruit. Before we know it, we have an orchard. It is a similar kind of compounding effect with property.

Property wealth comes ever so slowly at first, but eventually arrives in abundance. You have to make a start, no matter now small. With prudent property investment all that you need is the right information, time and patience.

For a detailed explanation of compounding, please view the Power of Compounding page.

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The bills still come in after retirement

What if interest rates rise?

At present rates are still falling and according to the experts should continue to fall well into next year. No one knows for sure at what point rates will stop falling but your lending expert will have a very good feel for the movements of rates and should be consulted to discuss the loan strategy for the following reasons.

1 In the current rate environment your lending expert would advise against a fixed rate loan as it is more likely that rates will go down than go up, and being trapped at a high fixed rate is not where you want to be. Your expert would recommend a variable rate loan to take advantage of the perceived drop in rates in the future.

2 The reverse is true when rates are going up.

3 At the time of your property purchase an investment analysis should be done to show what tax benefits flow from your investment. One of these benefits relates to interest that you pay on your loan. You may claim the interest back at the highest rate of tax that you pay the ATO either as a PAYG earner or self employed person.You may in fact claim this and other tax benefits through your regular pay cycle or in a lump sum at the end of the financial year. If you are on a variable rate loan and rates go up you will pay more interest, but you will also be able to claim more back through you tax benefit.

Essentially we must remember that investment property is a long term investment and that interest rates will rise and fall through the life of the investment and should not be viewed as a reason not to invest if rates are high. Invariably at the top of the rate cycle its the best time to pick up well priced properties.

We were brought up to believe that we shouldn't borrow money. Were Mum and Dad wrong?

Yes and no! The golden rule of borrowing money is to borrow for appreciating assets such as property, not for consumables that depreciate in value. Our parents were right in deterring us from borrowing money for cars etc, which over time can become worthless. However, when using debt for appreciating assets such as property, it is the most important tool to building wealth.

Why hasn't my accountant told me everything about investing in property?

When you go to the service station for petrol, does the mechanic come running out to suggest that your brakes need checking or that it's time for a tune up? We probably expect too much of accountants. They should be able to answer all of your questions competently, but don't expect them to be creative in guiding your wealth creation program. Accountants are usually specialists in their area of expertise – accounting. They will expertly complete the tax forms for you after you have provided them with all the figures. They are usually not specialists in property investment and should not be relied on as such. However, there are some accountants who do specialise in property, and some even have rental property of their own.

I don’t need advice; I already have an accountant / financial planner?

That is great. We do not try and replace them. You will find that your accountant is an historian he will work with what has happened whereas your Financial Planner works with you in relation to your shares. We deal specifically in property and mortgage elimination and work closely with your accountant.

Are shares or property a better form of investment?

Our specialty is property and thus our opinion is biased towards property however, we do believe that a mix of both can and will provide for a fulfilling retirement.

I’m not in a position to do anything so is there any point in talking to you at the moment?

Many of our clients often feel this way, how would they know otherwise? As professionals we often can help or find ways to improve the personal circumstances of our clients where they felt there was no hope. No one knows what they don’t know therefore unless you ask or try to find out, how will you know?

What are the advantages to using a company such as S.E. QLD. Investment Property as opposed to doing it on my own?

You will be working with experts who practice what they preach; they are fully qualified and accredited in their areas of expertise. You visit a specialist for everything else a Doctor, Dentist, Hairdresser and Mechanic - why not speak to an expert in relation to your financial freedom?

Why shouldn’t I just concentrate on paying off my mortgage?

Paying off your mortgage is only one of the many financial challenges that many Australian families face. A more effective strategy covers areas such as retirement, travel and children’s education in conjunction with paying off your mortgage.