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Master Class:Treating Property Investment as a Business
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Master Class:Treating Property Investment as a Business
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Portfolio
Builder
Portfolio
Manager
Portfolio
Builder
Portfolio Manager
Membership options to match your needs
Take the 21 day free trial at www.realestateinvestar.com.au
21 Day Free TrialNo obligation – full access
www.realestateinvestar.com.au
We even set up & supply you with:
Portfolio Solutions Master Class
• Designed to share knowledge.
• Desire to provide extra value to our clients.
• Great for both new and experienced investors.
• Plenty of opportunity for Q&A
• Market leading industry partners invited by Real Estate Investar to present and educate.
Xero• World’s leading online accounting system.
• Founded in 2006, dual listed on NZX & ASX.
• More than 900 staff worldwide.
• Trusted by more than 400,000 small business owners and professional advisors.
• 100% cloud based. Nothing to install. Works anywhere.
• Powered by daily bank feeds from 5,000+ banks.
• Same security as internet banking.
Treating Property Investment as a businessHow to use REI & Xero to better understand and manage your investments
4 things critical to every business
• Team
• Strategy
• Goals
• Active Management
“Don’t treat property investment like a game”.
Who do you need in your team?
Accountant
Mortgage Broker
Quantity
Surveyor
Property Manager
Legal Advisor
1.75m Australians
1 Property
2-4 Properties
5+ Properties
• Pays shortfall for 5 years+.
• Eventually sells and pays down personal debt.
• No retirement income.
• Strategy & numbers.
• Self funding portfolio.
• $100-$250k+ passive income in retirement.
• Has high income or buys every few years.
• Freehold in retirement.
• Min. retirement income.
Source ATO/ABS
3 levels of Property Investment
1.75m Australians
1 Property1.266m
73%
2-4 Properties457,000
25%
5+ Properties28,3451.7%
• Pays shortfall for 5 years+.
• Eventually sells and pays down personal debt.
• No retirement income.
• Strategy & numbers.
• Self funding portfolio.
• End up freehold• $100-$250k+
passive income in retirement.
• Has high income or buys every few years.
• Freehold in retirement.
• Min. retirement income.
Source ATO/ABS
What level are you aiming for?
• Pick the right strategy for you• Pick the right strategy for now• Keep an eye on what is going
on in and around the market.
Our top tips for 2015/2016:
1. Buy well (Get a discount)2. Create Equity (Improve value)3. Maximise Cashflow (Be creative)
Check out blog.realestateinvestar.com.au for more!
So how can you succeed?
8 Type of Property Strategies
1. Capital growth
2. Discount
3. Renovation
4. Positive cash flow
5. Vendor finance
6. Strata titling
7. Subdividing
8. Development
Goal Setting 101Remember ‘Smart’ goals are key:
• Specific Who, What, Where, When, Which, Why?
• MeasurableHow Much, How Many, What Amount?
• AttainableMake sure you have the attitiudes, abilities, skills and financial capacity to attain them.
• RealisticYou need to be willing and able to get there
• TimelyMake sure you have a timeframe
When setting goals:• Create a big goal first
“I want to retire by age XX with an income cashflow of $XXX,XXX per annum”.
• Break it down into smaller goals
“I want to be able to measure and track my current investments for year on year comparison of growth and cashflow”
“I want to add a property that will provide 25% of my XX targeted income per annum”.
• Create action steps
“Create a report on my current position”
“Meet with my Accountant to review current position”
The importance of tracking
• If you don’t track what you are doing, how do you know how you are going?
• When do you know the right time to act next?
• What if you lose a receipt?
• What do you do at tax time?
• What will you do if you’re audited by the ATO?
What are your options?
There are 4 different options for staying on top of your investments:
1. Folders, envelopes & boxes.
2. Spreadsheets.
3. My accountant does it.
4. Systems & technology.
Each have their own pros and cons, and you can also use combinations.
Folders, envelopes & boxes
The most common approach for the bulk of investors. Documents stored away during the year and pulled out at tax time.
PROS
• Simple method.
• Low effort required during the year.
CONS
• A lot of effort or cost come tax time.
• Easy to lose crucial documents.
• Things can be missed that might be claimable.
• No easily accessible data at a glance.
Spreadsheets
As investors add property, spreadsheets become more important. Created for purpose, or supplied by advisors.
PROS
• Readable high level data.
• Measurable.
CONS
• Require ongoing regular effort.
• Still requires files or folders.
• Need some basic technical skills.
My accountant does it
Under this scenario everything is simply handed over to your accountant at tax time. ‘There you go mate!’
PROS
• No real effort required
CONS
• High cost and in arrears.
• Low visibility until youget your tax return (and bill).
• Never market ready.
Systems & technology
Xero and Real Estate Investar have integrated to deliver real time accounting, management & tracking of your portfolio.
PROS
• Accessible anywhere.
• Live market and transaction data feeds.
• No more boxes of receipts.
• Less stress and accounting costs.
CONS
• Less work for your accountant.
7 Tips to make next FY Simple
1. Add your properties to Portfolio Tracker.
2. Request your complimentary Xero organization to be set up and connected to Portfolio Tracker.
3. Connect your bank accounts.
4. Commence reconciling your transactions.
5. Add your trusted advisors to Xero.
6. Attach everything you can to Xero.
7. Send an email on the 1st of July to get started with last years return!
• Take the trial, or if an existing member, get started with Portfolio Tracker.
• Add Xero by clicking the Xero logo on the home page and completing the “Get Started with Xero” form.
• Review the training videos and webinars (including this one) available in our video tutorial section.
• Real Estate Investar provide 5 hours of 1-on-1 training to all new members as required (valued at $745).
• Xero support is also available readily through their website.
What can I do next?
We also make it easy to find REI and Xero friendly accountants
Take the 21 day free trial at www.realestateinvestar.com.au