free guide big profits in real estate

8/11/2019 Free Guide Big Profits in Real Estate

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BIG PROFITSIN REAL ESTATE

STEPHEN McCARTHY

HOW TO BUILD YOUR

PROPERTY INVESTMENT PORTFOLIOFOR AS LITTLE AS $15A DAY

CEO, McCARTHY GROUP


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THE SECRET IS UWith our growing population,

affordable land supply choked off,

and the rising cost o construction

materials, it could well double again in

the next ten years. Tis ever-increasing

value is your equity, and we call it your

sleeping money.It sits right under your eet, and i

harnessed correctly, it has the potential

to set you on the path to financial

reedom. Te secret to making real

money in property investment begins

by knowing how to use the equity that

exists in your own home.

TIMES HAVE CHANGED

O course hindsight is a wonderul

thing, but imagine how much equity

youd have today i you had bought two

properties when you started out? At

the time, the bank or building society

probably wouldnt have lent you the

money that you needed.

Tankully, this has now changed. In

act, banks are now eager to help you

own a second home because:

the rental income rom residential

properties can service its mortgage;

over the medium to long term,

Welcome to the Big Profits in Real

Estate guide. I am delighted that

youve taken this important first step,

and have begun to seek inormation

on how to build your property

investment portolio.

Creating and growing your ownportolio is a major step towards

financial independence. Although

you might think that building your

portolio with as little as $15 a day is

not possible, let me assure you that it

iswhen you know how.

Tis booklet describes how the

equity in your home can be leveraged

to provide you with an asset to assist

you in becoming financially inde-

pendent, and maintain your standard

o living well into retirement.

WHAT EXACTLY IS EQUITY?For most Australians their wealth

is tied up in the value o their own

home due to growing property

prices. Look at your own home

and youll know this is not a recent

phenomenon. Chances are that i you

have had it or ten years or so, it has

approximately doubled in value.

NDER YOUR FEETproperty values continue to rise;

and

ew things are as sae and secure as

residential bricks and mortar.

INVESTMENT PROPERTYWITHOUT A CASH DEPOSIT

As a homeowner or mortgage holder,

you have already done the hard work

through saving or your deposit and

building the equity in your home. Tis

is why purchasing a second property

is ar easier than you might think. And

owning two or more could financially

set you up or lie.

Flushing the equity in your own

home helps you to kick-start your

property investment portolio. It

allows you to invest in property

without the need to come up with a

cash deposit.

Tere are however many other

opportunities available to you through

this equity. An investment portoliocan, in the short term, reduce your tax

bill and move you towards becoming

mortgage ree. In the long term, it

can provide you with the security o

financial reedom.

For over a decade the McCarthy

Group team have been dedicated to

helping our clients achieve big profits

in real estate. Tis opportunity is now

available to you.

MichaelJohnsonHead o

McCarthyGroup

Financial

WayneWandersGeneral

Manager

StephenMcCarthy

CEO


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OWNING YOUR SEIS EASIER THA

Many people are amazed to learn that

it is ar easier to own a second property

than it is to own the first. Tey believe

that its hard enough meeting the

existing mortgage payments on their

current home, let alone thinking about

how they could afford a second one.

Te truth is you wont be paying

off the second mortgage by yoursel.

Unlike your own property, where you

have to make one hundred percent

o the payments, your tenant will

contribute approximately hal o the

cost o the mortgage repayments.

Te tax office will then cover about

a quarter o the costs in tax rebates.

Which means that you only have to

und the difference. Reer to Diagram

I, on opposite page.

WHY DOES THE TAX OFFICE GIVE

YOU TAX BREAK S?

Te government makes these generous

concessions available because it has

decided that private investors are the

preerred suppliers o rental property.

Tis also takes the pressure off the

government to provide housing.

Consequently, many years ago the tax

HOW DO THE NUMBERS WORK?

Purchase price including costs $430,000

Outgoing

Mortgage payments $25,500Running costs 8,000

Total $33,500

Incoming

Rental $19,000ax breaks $9,500Total $28,500

Shortfall $5,000

Weekly $96

Daily $14

Assumptions

Interest rate 5.92%Interest only

Running costs include rates, propertymanagement, insurance, maintenance, etc.Rental assumes property rented or 48 weeksFigures have been rounded

office worked out a plan to incentivise

private property investment, loosely

described as negative gearing.

WHY INVEST?

Whilst there are requent media

reports calling or the government

to scrap these incentives, successive

governments have continued to reject

these calls as the principles or these

tax incentives remain strong.

Tere are many reasons why people

like yoursel decide to buy a rental

investment property. Some want

to retire early. Some are motivated

or tax reasons. Others just want toenjoy the eeling o creating wealth

or themselves over and above their

regular income.

However, most people only make

a move when they discover how little

money theyll receive through normal

channels when their working days are

eventually over.

COND PROPERTYN YOU THINK

Other

Invest forRetirement

ReducibleTaxableIncome

ObtainIncomefromRent

Secure Long-term

Investment

YouTaxman

Tenant

5

Diagram I:Who pays the second mortgage?

Diagram II:Why do people invest in property?


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KEEP YOUR MONEAFTER YOU H

Did you know that the majority

o retirees in Australia are bitterly

disappointed with their level o

income?

Whether its rom superannuation

or the pension, or a combination o

both, it provides or a meagre income.

Unortunately many dont discover

this truth until its too late to do anything

about it. And it is widespread, affecting

both white and blue-collar employees.

I you were to find yoursel in this

situation, you can say goodbye to having

private healthcare, or private motor

vehicle ownership, or helping out your

kids. Tere will be no more luxuries.

YOU HAVE A CHOICE

How much money will you need to live

comortably once you stop working?

Lets work backwards. Assuming a

reasonable $40,000 a year beore tax,

and a conservative return on your

investment o 5 percent, how much

capital would you need to generate

earnings o $40,000 per annum? Te

maths is simple: $800,000.

NEVER SAY NEVER

Youre probably thinking, We could

never save $800,000. But beore you

dismiss the idea, just think about the

value o your own home. Chances are

Katrina & Dennis GhettoMcCarthy Group ClientsSince 2005

Y WORKING LONGAVE STOPPED

that i you bought it ten years ago or

around $250,000, it could be worth

$500,000 today.

Te most recent available figures

rom the ABS show that in the last

ten years, the median house price o

the eight capital cities has grown at an

average rate o 8.9 percent per annum.

At that rate, it doesnt take long or a

property to double in value. I you kept

a property thats now worth $500,000

or ten years, it could then be well

worth $1 million.

So, why not do this with more than

one property? And thats the secret o

property millionaires. It is the simplest

and easiest way to profit through

property investment. Buy and hold.

LEVERAGE AND TIME ARE THE KEYS

Te secret to building wealth is using

the equity that you have already built

up in your property to assist you to

invest in an asset that appreciates in

value. Lending or property is the

avoured orm o lending or banks

and building societies. Tis is why

they place billions o dollars in the

property market each year.

BANKS WILL HELP

Provided that you have a regular

income, have sufficient equity, and a

good credit history they will lend you

up to 100 percent or more o the value

o the selected property or a period o

25 to 30 years. Once that property has

increased in value, you may well be in

a position to repeat the process. But

most people only ever buy their first

home and then stop.

At retirement, you may well be

surprised that your house is now

worth one million dollars. With

hindsight this could easily have been

turned into two properties worth two

million dollars.

Te sooner you act; the sooner you

can achieve gains. So, dont wait to buy

property, buy property and wait!

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PAY OFF YOUR HOMINVESTMENT PR

Many people still believe that they

should wait until their house is paid

off beore buying another. Tats called

conventional wisdom.But times change and so do

conventions. oday the bank will lend

you the money to buy an additional

property while you pay off the first

one. Tis means that you can hold two

properties at the same time, and enjoy

the compounding value increase on

two properties rather than one.

Once their homes have doubled

in value, many couples then think

outside the square and sell the

investment property and pay off their

original home mortgage. We call this

approach back burning and it is

highly effective in creating a mortgage-

ree result.

TIME IS RUNNING OUT

One o the key ingredients in the

recipe o successul investment is

time. You need time to let asset values

and rentals grow.

Te longer you leave the decision,

the less time you have to reap its

benefits. And i you are not careul,

you may reach the point o no return,and ace the kind o unsatisactory

retirement being experienced by

many Australians today.

You need to make sure that when

your work stops, your income doesnt.

And the only way to do that is to

develop a sound investment plan, and

act upon it.

ITS COMMON SENSE

Youll kick yoursel i you ever come

to realise that there was a solution.

A solution that enabled you to retire

in relative comort, with financial

reedom and independence, and you

simply never discovered it.

Please keep an open mind, and

understand that Im not asking you to

do anything that doesnt come with a

good dose o common sense. I you

do nothing about the uture, you will

most likely end up going broke.

E LOAN WITH YOUROPERTY PROFIT

9

Living on an income equivalent to

the dole means you are broke. And

i you want to avoid this situation,

then you might as well give yoursela fighting chance and create a Plan B.

HOW DO I DO IT?

For many people the starting point

has been our Plan BWorkbook. Its a

simple guide with five key pillars. It

starts out by helping you to calculate

where you are right now in terms o

your current assets and income, and

where you are likely to end up using

your current projections.

You then work out how much

income youll need to retire in the

kind o liestyle that youve enjoyed

while working, and that you plan

to continue to enjoy once youve

stopped.

Te workbook is essentially a

roadmap o the path to investment

success, leaving you with a clear

picture o what you need to do to take

control o your uture.

Would you like to get a sneak

preview o how your financial world

will look in twenty years time? Im

sure you already know where youwant to go, but can you figure out how

to get there with certainty?

Our associates can walk you through

your financial uture, and map it out

or you so you can see clearly where

you are today, and how you can retire

without money worries.

Lynne & Ray SpicerMcCarthy GroupClients Since 2010


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L TOGETHER

PLAN B FOR RETIREMENT

PILLAR 3:SUPERANNUATION

Te question everyone asks is how

much will my superannuation be

worth on retirement, and will it

provide me with sufficient income?

Teoretically, your biannual state-

ments should answer these questions.

However, or most o us these

statements are indecipherable. Tere

is unnecessary complexity and general

uncertainty on what it will provide,

and upon working it out, many people

are underwhelmed.

Plan B will show you accurately

and in laymans terms what income

your superannuation will deliver to

you when you need that money.

PILLAR 4:ASSETS

For most people their biggest asset is

their own home ollowed by the value

o their superannuation und. But will

they generate enough income or you

to stop work comortably?

Te amily home could be a source

o income but there are no guarantees.

You will always need somewhere to

live. What Plan B looks at is what

assets you currently have to give you

an income stream when you stop

work, and what other assets you canput in place to help build your income

or the uture.

PILLAR 5:INCOME

Understanding what income you need

is critical, as is adjusting it or inflation.

It is a sad act that most financial

commentators overlook the corrosive

effect o inflation on income.

CREATING YOUR PLAN B

Te benefit o having the Plan Bis that

it puts all o that inormation together

so you can say, Tis is the area or

my mortgage, my tax, my assets, and

my superannuation, and see how

inflation plays a role in all o that mix.

So, let us help you build your own

Parthenon by making sure all o your

five pillars are working in harmony to

help you enjoy your standard o living

in retirement.

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BUILD YOUR PROPPORTFOLIO F

Media HypeMore Buyersthan Sellers

Shortage ofTradespeople

ValuationsRise

Prices

Rise

Stock LevelsTightening

RentalsIncrease No Confidence

More Sellersthan Buyers

ValuationsFall

Abundance of

Tradespeople

FallingConstructionPrices

StockOversupply

AffordabilityCrisis

Low Rental YieldsHigh Confidence

Boo

m

Recove

ry Slum

p

SlowD

own

Buyers Market

Sellers Market

PROPERTY INVESTMENT CYCLE

ERTY INVESTMENTOR $15A DAY

Ive ound that most people dont

need to spend a ortune to create an

investment portolio. Plan B can be

your guide - it is your back up plan or

your financial reedom.

o have a second property, on

average its an investment o $15 per

day with good rental returns and tax

benefits. Tats not much really when

you consider that a couple o cups o

coffee and a sandwich in a ca will

cost about $15.

$15A DAY

CAN MAKE A BIG DIFFERENCE

Right now youre probably thinking

that $15 a day wont impact you or

your liestyle choices in retirement.

However, it can make a significant

difference and allow you to retire

without any money worries.

Its all about choice. I youre

prepared to give up a couple o cups

o coee a day, then you too can

set up your retirement that many

others only dream about.

SO WHY ACT NOW?

Most things in lie, including

something as amiliar as breathing,ollow simple cycles. Countless times

every day you breathe in, pause,

and exhale. Tese unctions happen

automatically. A similar progression

is true or the property market.

Currently the property market is

generally considered to be in a pause

stage. Tis is normal. Its not negative,

or badit just is! Within the market

cycle, prices cannot consistently

rise without a pause, nor can they

all indefinitely. In between these

two extremes, the market slows and

readjusts beore rising once more.

Such patterns have been in place

since time immemorial. Plan B will

show you how you can increase your

assets by entering the market at the

right part o the cycle. Tere could

not be a more opportune time or

you to inquire urther and enter the

market than right now.

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ACT NOW WHILE THI urge you not to put your decision

off any longer. Make the first move

towards becoming one o the thousands

o investors whose lives have been

changed orever through

Another great investment property by

Investment Property Central, a division o McCarthy Group

discovering Big Profits in Real Estate.

For a ree consultation with absolutely

no obligation, contact McCarthy Group

today on 1300 850 318, or email Julie at

[email protected]. It could

E MARKET IS DOWN

SEPHEN McCARHY CEO, McCARHY GROUP

be the most valuable call youll ever

make. What do you have to lose?

Tank you or taking the time to

read Big Profits in Real Estate.Please let

McCarthy Group assist you in building

your property investment portolio or

as little as $15 a day!


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McCarthy Group Pty Limited ACN 086 284 826

02 9687 3601 / 1300 850 318 / F 02 9687 3610

Building 2, Suite 2.01, 35 Waterloo Rd Macquarie Park NSW 2113

PO Box 42 North Ryde BC NSW 1670

E [email protected] / www.mccarthygroup.com.au

For additional copies o this consumers guide, or another in our series, please contact us at the address below.

PLEASE CALL 1300 850 318VISIT OUR WEBSITE: MCCARTHYGROUP.COM.AU

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