Recent political focus on negative gearing has created widespread confusion for those using outdated approaches to investing in property, triggering a growing need for professionals to provide tailored advice and up to date opportunities.
With the Budget announcement on the horizon, both political parties have been heavily weighing in on the debate about negative gearing. Labor recently announced that if elected, it would restrict negative gearing deductions to only new property. The Federal Government opposes this, asserting that negative gearing should remain with caps being placed on its use. It’s an outdated way of investing to focus solely on negative gearing to build a property portfolio.
All of this debate surrounding gearing and lending as the Budget looms has only highlighted the need for diversity in any property strategy. There are a lot of opportunities out there, people just need guidance.
A key point-of-difference for Crave is that it realises the need for diverse portfolios to be built case by case, using strategies designed to suit each individual requirement rather than a blanket reliance on negative gearing. We find this approach gives our clients the confidence to build a strong and balanced portfolio that is adaptable to changes and opportunities in the market. Regular portfolio stress checks are also important to ensure ultimate security.
Crave has had a strong first year in business, assisting clients to purchase over $55 million in property. A range of different market tactics have been employed by Crave on behalf of buyers, with opportunities including capital growth, high yield, cash-flow positive, add value, renovations, granny flats, developments and buying new or established properties in regional or capital cities.
Crave warns against advisors that claim they are delivering positive returns, while largely depending upon negative gearing and depreciation. Any changes in circumstance, such as sudden unemployment, and the property will quickly become a burden. While negative gearing can certainly work as an investment strategy, the ultimate aim for any investor is to make, not lose money.
We just purchased a $325,000 property on behalf of a client, a corner block spanning over 790 square metres with rental return of $340 per week. They also have the opportunity to add a granny flat. Another client recently landed a development block for $825,000, with similar properties now selling for $1 million. We have the experience required to advise clients on adding value or optimum times to buy and sell.
Savvy investors are also beginning to look beyond local or usual purchase areas to areas that not only better suit their own financial situation but offer affordability and growth potential. Now is the ideal time for home owners to check whether the impacts of recent Government changes could increase the equity on their existing properties.
We are seeing a lot of opportunities being unlocked, with Government re-zoning key areas and adding infrastructure such as roads, transport and community facilities.
Political parties are always going to have their own agendas within the property sector and will push these through by presenting investors with a seemingly clouded or limited range of investment options. For this reason, it’s crucial for investors to source up-to-date information from independent professionals to ensure they’re making fully informed decisions, and are presented with the most appropriate and realistic property opportunities.