While real estate investing is a great line of business to get into with the potential to build a high asset empire, there are “Things To Consider BEFORE Jumping Into The Fray”. This is particularly true where there are tenants involved.

There are so many reasons supporting the wisdom of investing in residential real estate; who would not be interested in establishing a secure long-term business, especially one able to deliver such predictable results? As with any business there can be drawbacks, not all of which are financial, therefore it is wise to consider these things when you buy your first rental property.

Consider These

Firstly, some people elect to manage their own rental properties. The risk with this is that they could quickly discover that their life is no longer their own. Who wants to be on call 24 hours a day 7 days a week to handle petty or more serious issues that may arise from time to time? Do you really want your tenant to have your phone number and expect you to be available to take their calls? I think it is far wiser to employ a competent property manager where the small fee (approx 7.5%) is a cheap way to avoid all of those problems and pass them on to someone who has experience and systems in place to handle them.

Secondly…, why take on the role of “Mr or Mrs Mean Debt Collector” when the rent is due? Of course you are not a debt collector but if your tenant was having a tough month and offered a sob story that week you could be left feeling as though you were. Success in any business starts with treating your business as a business. Remember that owning rental property does not just make you an investor but also a business owner. Personally I like the “set ‘n’ forget… for busy people“ ™ approach that mrd teaches. While nothing is ever ‘perfect all the time’ in business, anything that makes the job easier (and thus the income more passive) appeals to me.

Thirdly, all properties will suffer wear and tear over time. New properties have builders and appliance warranties and as such will not require you to spend money on any significant maintenance or repairs, hopefully for five to seven years. Sure there will be a plumber called to replace a faulty washer or perhaps damage from tenants who failed to treat your rental property with the respect that they would have treated their own home (funny about that). Again, treating your property investments as a business means you will have in place the necessary insurances (incl. Landlords Protection Insurance). Given carpets are unlikely to need replacing nor walls repainting for five to seven years (i.e. in a new property), your business (rental properties) by that time should have significant profits (equity) from where to pay these necessary maintenance costs. Before purchasing an older property please consider these added costs which you could be up for from day one. No point in spending all you can to get into a property without proper consideration of what it will cost you (and when) to maintain along the way.

At Christmas time while visiting with Nick, Katrina and their family I was speaking about the importance of being a good landlord and having the tenant WANT to care for your property. Katrina asked me to turn that conversation into an article – read “How To Be A Good Landlord”.

Another Example Of Being A Good Landlord

My agent recently advised me that a tenants lease was up for renewal and proposed I increase the rent by $5 a week. My response was “Check with the tenant and if they are having any financial problems, tell them they can renew without increase”.

Now let me tell you how stupid I was. By giving up the $5 increase I improved my chances of having the lease renewed. The $5 for 26 weeks amounted to $130. It would have cost all of that for me to advertise for another tenant plus the loss of rent of $380 a week for as long as it took to find another.

But, you say, the tenant may have stayed on anyway and you’ve just thrown away $130.

So what was the end result? You were right. The tenant did stay on but, also agreed to pay the extra $5 as they could afford it. There spoke a tenant who appreciated the care shown to their interests by the landlord.

As the owner of a rental property you want your property consistently occupied; each day it is empty is a day you aren’t making money. Ideally you really want long term tenants. One way to increase the likelihood of this is by making sure that your tenants are treated well, not overcharged, and happy with their home.

When a tenant decides move on, you are more likely to find a new tenant sooner if you are using the services of a competent property manager who deals with rental enquiries on a daily basis.

Owning rental property can be financially rewarding and very “hands-off” if you run your business smart. Alternatively you can jump in without much thought or consideration and create a rod for your back; just like in any business. Be prepared to make a long-term commitment to your investments. Keep your property in good working order. Employ a competent property manager and most of all, look after your tenants. These combined will be your “success insurance”. If you do these things, I believe you will have a profitable venture for many years to come.

Frank Lockhart.

Do You Want To Get Started (Or Advance) An Investment Property Business?

Thanks for your input and wisdom dad; much appreciated!

If you would like to learn more about how to responsibly build an investment property business… by that I mean not being reckless with debt, not making decisions that, while may be popular, are not going to deliver you the best possible outcome… then I strongly recommend you speak with an mrd Property Mentor.

• STEP 1: Watch the recording of my recent live presentation titled “How To Prosper In The Slipstream Of Population Growth” where I promise you will learn a lot (even if you are a seasoned investor). Unless you have very high speed broadband just stream the low quality version straight from our web site >>>here
• STEP 2: Complete a Borrowing Capacity Assessment form and discover how the lenders view your financial capacity >>>here
• STEP 3: Make contact with mrd and express your interest in participating in a “Personal Results & Options Plan” (PROP). This is done in real time over the internet where a Property Mentor will make themselves available. It is of course both complimentary and without obligation >>>here

Undecided?

• Find out exactly what a PROP is >>>here
• Video of a live demo >>>here
• What do others say >>>here

As always, I encourage you to DO SOMETHING; responsibly, of course! Even if that something is to continue learning, increasing your knowledge and confidence.

Happy Investing,

Nick Lockhart
Our Customer Care Program works for you… because investing is personal!

You hear us carry on about “position”. That we believe being close to infrastructure, schools , hospitals, transport etc will give better capital growth. Because the government generally puts infrastructure where the population is going. Increasing population means increasing demand, limited land close to infrastructure limits supply.

Just makes sense doesn’t it?

So a big part of the bottom line has to be infrastructure spending- yes? Infrastructure projects mean more population and more jobs.

Infrastructure like-

• Building roads  – In 2010-11 the Queensland Government will be providing $7.3 Billion for transport and main roads.
• Bridges – e.g. new Gateway Bridge alone is $2.12 Billion
• Tunnels – e.g. Clem 7 tunnel. At 6.8km isn’t that the biggest one in Australia?. $3 Billion.
• Airports  – The Brisbane Airport is the fastest growing capital city airport in Australia
• Hospitals – $5.8 Billion for health in the current budget
• Schools etc .

Qld is spending more on infrastructure than any other state and has been for years.

Government Spending on Infrastructure (AUD $billions)

http://www.investqueensland.qld.gov.au/dsdweb/v4/apps/web/content.cfm?id=12268

According to the Property Council of Australia the record spending must continue if South-East Queensland is to cope with the hundreds of thousands of new residents making Queensland their home in coming decades.  The Property Council’s Steve Greenwood said Queensland was spending almost twice the per capita amount committed by the New South Wales Government.  Mr Greenwood said: “Credit where credit is due.“

In case you hadn’t noticed we are in the midst of a federal election campaign. Politicians will say… and be seen to do, that which is popular and likely to win votes. The population debate is one of the HOT TOPICS in this campaign. Do we want a big Australia or sustainable population growth? Let me cut through all the spin and spell out what this debate is really about and what Australia is going to look like in 2050.

Firstly, let’s establish one thing up front. This debate is not about population… it’s about immigration!

Australia has grown on the back of foreign capital and immigration. Yes, we are currently growing at around 2% per annum, however, over the past 10 years our growth rate has averaged just 1.5%. I say “JUST 1.5%” because our demand for labour over this same 10 years have been increasing at a rate of 2.5% a year. How do we close this gap… or, what happens if we don’t?

We Are An Immigration Dependent Society

Remember that universal law I regularly talk about… you remember, the one that determines the worth of anything (everything)? It is supply and demand that determines what you will pay for housing, bananas, coffee, airline travel etc, etc. Where immigration levels fail to keep pace with labour demands we have labour shortages. Not only does this produce hot spots but it puts upward pressure on the cost of labour which in turn feeds into inflation; resulting in the Reserve Bank of Australia (RBA) increasing interest rates. That results in not just higher mortgages but economic slowdown too.

Unfortunately our population debate is being squarely focused on more emotive factors and it appears that no one in our national leadership is actually making this case!

Let’s Get Real About Immigration Numbers

Treasury estimates of a population of 36 million by the year 2050 is based on consistent immigration numbers of 180,000 each year. These are the sorts of numbers that we had coming in to the country under the Howard government. Under the Rudd (now Gillard) government those numbers have been closer to 350,000 a year. Therefore, it is obvious that we will not have a population of 36 million by 2050 on the current levels… we will have a population of 36 million much sooner.

NB: We would need to commit to almost halving our current immigration intake to only hit 36 million by about 2050! But if we were to half our immigration numbers we will exacerbate an already existing labour shortage and as mentioned above… would be forced to deal with other serious economic consequences.

More Babies

Introducing a paid maternity leave scheme adds incentive for families to have more children. Natural population growth (births less deaths) will continue to occur and is out of our hands really. Natural growth will never be enough, nor will these babies add to the labour market for many years. Our need to fill the labour shortage gap with imported labour is here to stay.

Bob Carr And Mark Latham

The argument against growing our population, as communicated by Bob Carr and Mark Latham is compelling with the negative impact being felt most by those on the fringes of our larger coastal cities. For over a decade now I have been saying that medium density property, close to infrastructure and services, employment, transportation and lifestyle will offer the best capital growth into the future… and this is why.

As our cities continue to swell and become more congested… as they will, do you think your quarter acre block 30 kilometres out of the city that takes 90 minutes each way commuting in traffic to work… or your apartment within walking distance of your job, the restaurants, shops and so on… will offer the best capital growth?

The answer is simple! It has nothing to do with anything else and everything to do with supply and demand.

Just as you can pin more darts to the circumference of a dart board than you can to the circumference of the bulls-eye in the centre of the dart board, you can pump more people into the fringes of a city than you can to those areas in and around infrastructure.

That is, the supply is finite/limited in those areas that I think should be your first choice of location to hold investment property. Remember more and more people are growing more and more frustrated sitting in traffic. Remember also that as time goes on the numbers of people per dwelling is shrinking – as is the need for big houses. Who wants a garden you’re not allowed to water? Who wants a pool (that they’re not allowed to top up) to themselves when they can share in the increasing costs with others? Who wants to spend their weekends maintaining a yard when they could be at the beach, a cafe, the movies or with friends?

Future Demographics And Change

Understanding future demographics is necessary in order to make responsible and prudent investment decisions; decisions that will deliver you the best possible outcome. Understanding the economic and political realities of the society in which we live, as opposed to emotive rhetoric and/or spin is also a must if we are to avoid mistakes.

A Big Australia

• No matter which way we dissect this debate; no matter how you feel about it personally and no matter what you are told during this election campaign… we are heading for a BIG Australia.
• There is going to be added social, economic, environmental and political consequences.
• There is an urgent need to address infrastructure and services.
• We need better roads, improved public transport, new schools, hospitals and so on.

More Tax Or More Migrants?

There is another side to this debate. Who will pay for all the above, given that on January 1 this year the first round of baby boomers turned 65 and became eligible for the pension?

Did you catch that?

Costs to address our country’s future needs are on the up, up, up. More and more Australians are moving into that time of life where they are no longer contributing to the labour force or consolidated revenue (i.e. budget bottom line), rather they become dependent on the government to provide from the budget the costs of aged care, health care and pensions.

Do you really think “Gen Y” is going to pick up this shortfall? No, of course not.

Whatever persuasion of government we have this time round or next, it will have no choice other than to plug the labour shortage and budget shortfall holes and the only way they can is by importing labour.

That means higher immigration numbers… and as I said earlier – this is not so much a population debate; it’s definitely an immigration debate!

Don’t Make Long Term Decisions Based On Short Term Focus Or Information

The good news for you as a property investor, however, is to see the opportunity. To take advantage of what will be (in my humble opinion) unstoppable market forces. You can choose to be a victim of population growth or Prosper In The Slipstream Of Population Growth!

What Next?

I strongly suggest that you prioritise doing two things right now which I believe will greatly assist you in making fully informed, responsible decisions that are right for you and your family:

1. Watch the recording of my recent live presentation titled “How To Prosper In The Slipstream Of Population Growth” where I go into a lot more detail and make more predictions that I have here today >>>more
2. Make contact with mrd and request sitting through a “Personal Results & Options Plan” (PROP). Don’t be dismissive or prejudge what this will do for you >>>here

Not convinced?

• Read about what a PROP exactly is >>>here
• See a video of a live demo first >>>here
• Read what others who have done this think >>>here

Whatever you do… do something about your tomorrow; for your sake.

Happy Investing,

Nick Lockhart
Our Customer Care Program works for you… because investing is personal!

Why do we tend to focus more on SE Queensland than other areas? Australia is unlike most other countries in that the vast majority of our population is in the coastal cities. We have in the past tended to focus on Brisbane, Gold Coast and Sunshine Coast.

Why?

Is it just because mrd is based here?

We cannot deny that living here allows us to see firsthand the growth, the infrastructure, the investment and the future that SE Queensland has. However, I personally started investing in Brisbane when I lived in Adelaide in 1999.

Why? Because at the time Brisbane was the fastest growing city in Australia and guess what – it still is! In 1999 when I was living in Adelaide, the ABS population projections to 2050 estimated Adelaide’s population would grow by 1.6%, Brisbane’s by 78%!! Sure, things have changed but not by that much. SE Queensland is still, in my opinion, the safest bet.

Recent figures from RPData and the REIA (April 2010) looked at the fastest growing Local Government Areas in Australia. Below I took just the top 10. The areas that had the maximum population increase in pure numbers over the past year.

Brisbane and Gold Coast were numbers one and two, Sunshine Coast number five and Ipswich number eight. All are in areas we focus our research on.

I believe the price in all markets is determined by supply and demand, so does it not make sense that the areas which are likely to give the best results, with the least risk, will be those areas that have the maximum increases in population (and some limitation on supply)?

I am not talking about short term gains followed by slumps as many areas tend to do. I look at the best long term potential because I hold property for the long term. I won’t make long term decisions based on short term data. That is, I have no interest in the area that is “flavour of the month” – I want at a very minimum the “flavour of the decade” or longer. I don’t “trade” in property, buying and selling; I hold long term which is a much safer strategy in my opinion.

Sure many people will invest in property in other cities and make good money, but I freely admit I am a “lazy” investor. I want the best growth, a reasonable rent return and minimal risk and/or effort on my part. So far the mrd approach of “set ‘n’ forget… for busy people“ ™ has delivered me these results. If it ain’t broke, why fix it? Both the numbers and my experience speak for themselves.

Are You A Busy Person?

Nick openly says the services and systems of mrd best suit those who lead busy lives. You have a family, a job or business, many other commitments and your days are already full! Your life consists of what can be referred to as ‘big rocks’ and ‘little rocks’. You know you should do something about your financial future and you intend to. Perhaps you have intended to for some years now but gaining the knowledge, doing the research, discerning the many opinions and knowing who to trust, presents as just another ‘BIG ROCK’ that you can’t fit into your busy (or full) life right now.

At mrd, our complimentary and no obligation mentoring and support, is designed to empower YOU to make decisions that are right for you; as opposed to having someone sell to you. In fact we promise never to interpret your genuine desire to learn as a license to sell – something that sets mrd apart from other organisations that may, on the surface, appear to be the same.

I would encourage you to prioritise putting an hour or two aside to engage with an mrd Property Mentor in what we call a “Personal Results & Options Plan” (PROP). Just this week a client of Catherine’s gave feedback after having sat through a PROP. Here is just a snippet of what she said:

“Before ‘meeting’ with Catherine I had an idea of what I wanted to achieve but no idea how to go about getting there. Now I have a clear path and a better knowledge and understanding of how to execute my plans now”. See the rest of this clients PROP feedback – unedited >>> here

Yes Please!

• I would like to speak with an mrd Property Mentor to determine if I qualify for a complimentary, no obligation PROP >>>here
• Detailed explanation of what a PROP is >>>here
• View Live PROP Demonstration >>>here
• So as to personalise and accurately complete a PROP on your behalf we will first need to assess your borrowing capacity. You can complete this online (secure and encrypted) >>>here
• What others are saying about mrd >>>here

Happy Investing,

Martin Bell
Our Customer Care Program Works For You… because investing is personal!

People’s paradigms when it comes to debt are often what keeps them poor. I have exhaustively covered the topic of debt previously… looking at the three very different types of debt so I will not repeat that here. Today I want to share with you a specific comparison of how much better off a person could be by not paying down the principal component of their home loan; that is having their home loan converted to interest only.

Increase The Gap

The important thing to focus on is increasing the gap between what you owe and what you own… and not necessarily by reducing what you owe. So let’s look at an example of how you may best be able to do this.

I am going to assume that you have a total of one million dollars in borrowings across a few investment properties. I’ll also assume that inflation is running at 3% per year. This means the real value of your loan would be diminished by 3% per year… or $30,000 each year.

By maintaining those borrowings and not paying them down, time and inflation are paying down the debt at a rate of $30,000 a year. In time, what starts out to be a sizeable loan shrinks to almost nothing. While the number stays the same the true value diminishes over time.

I remember as a kid finding a dollar in the street. I was with four others so I used the dollar to shout us all a chocolate flavoured milk. Had I put the dollar into a drawer and kept it to this day it would not buy me one chocolate milk. That’s an example of time and inflation working against me… but by understanding it, when applied to borrowings, it can work for me.

>Most people can’t physically work enough hours to earn enough extra money to pay an extra $30,000 down each year. However, if you let it, inflation will do the work for you.

Even though this news is startling for many real estate investors, it only tells part of the story. That’s because you’ve also freed up the money you were putting towards principal… and now you can use this money to secure another property.
Take A look At The Numbers

Using the mrd Advanced Financing Strategies it may be possible to control a property capable of generating about $35,000 average annual net gain to you… or $673 a week.

The cost to control this property? $48 a week.

The difference between Principal and Interest; and Interest Only repayments on a typical $250,000 loan, $47 a week.

Note the word I used was control, not own. A friend of mine once said: “I don’t care who owns the Ferrari as long as I have the keys”. Control (not own) the property so that all gain in its value is yours to keep – that’s the objective – not necessarily being debt free. See also my live presentation “You Can Live WITHOUT Your Income” online… and learn from my windmill analogy >>>here

Your choice:

1. Pay down your debt by $47 a week… or
2. Increase your net worth by $673 a week.

So, if you take the money you were using to pay down principal, and divert it to just one extra property, you’ll have $673 a week which can be tax free. This is the same as boosting your wages income by more than $41,000 per year before tax.

Letting the power of inflation pay down your debt, you can free up cash to reinvest into more real estate and enormously expand your net wealth.

Changing your loans to Interest Only doesn’t mean you can’t pay down the principal, you still have that option. It just means it is now an option, not compulsory. It is at your discretion so you are in control, not the bank.

If you are not looking to leverage into more property and expand your asset base, or if you can afford to do both… then paying down the principal on your home loan makes great sense. I am not suggesting what you should or should not do… rather pointing out wealth creation choices. You see, a change in paradigm that leads to a more comprehensive understanding of the power of debt (good and bad)… could mean that options you didn’t even know existed, open up before you!

So What Next?

• Unless you are completely certain that your financial arrangements are structured in the best way possible, I suggest you have a financial health check undertaken. Just ask us!
• Do your financial arrangements offer you the most flexibility? If you are not 100% certain they do, ask us!
• Are you unnecessarily using personal cash flow to cover your property expense shortfall? Using mrd Advanced Financing Strategies that can possibly be avoided. Ask us how?

NB: mrd Finance is our in-house financing arm. Amanda and Jacqui are highly qualified and more than capable of looking at your current situation and suggesting where you may be able to make improvements. What they will never do is churn your loans to earn a commission from a new lender. While it is common to see it done in the finance industry, mrd Finance will only ever suggest a refinance of any existing loans if there is a direct benefit to you in doing so; that’s a promise!

Simply complete an online borrowing capacity assessment form (encrypted & secured) to get started >>>here

Alternatively, if you would like to speak with someone next week regarding property or any of the ideas shared here today (or in past newsletters), just ask >>>here

Happy Investing,

Nick Lockhart
Our Customer Care Program Works For You… because investing is personal!

Myths That Are Just Not True

People are conditioned with wrong beliefs; here are some examples:

1. If it sounds too good to be true it probably is! The pessimist will agree with this all the time but the optimist will know that it is only true some of the time.

2. It takes money to make money! If this were true then everybody with nothing to start with would be destined to remain broke.

3. Practice makes perfect! No it doesn’t; if you practice something the wrong way for long enough you merely develop a bad habit, ask any golfer. The correct truth is that “perfect practice makes perfect”.

4. Retirement planning is something you think about in the years immediately preceding your retirement! While there is planning involved just prior to retiring, those plans have everything to do with how you will structure and use the wealth you have already created. This is not the time to be trying to find some fast way of accumulating wealth on which to retire. If that has not been taken care of you are probably far too late.

5. Study hard, get a good job and work hard till you are 65, at which time your superannuation and perhaps the government pension will give you a comfortable retirement. Most of us were conditioned to “see” retirement as an event that happens when we turn 65; but this is so wrong; retirement is a function of your income and not your age! Those results achieved by those who merely followed the “work hard” formula speak for themselves.

What Retirement Is Not

• An event that happens to people when they turn 65.
• A time of life when you are no longer productive.
• Something you do when you get old.
• Something to think about when you are older than 50.
• A time of life when you take up gardening and lawn bowls.
• Something that happens when we are grandparents.
• That stage of life when the government supports us.

Of course all of the above may be applicable to a retired person but these of themselves are not accurate in describing retirement.

What Retirement Is

• When I no longer have to work to pay the bills.
• That stage of live when the rewards of my past efforts will sustain my expenses into the future.
• When my time is my own, as I no longer need to exchange time for money.
• When I choose how I will spend my day.
• Financial (and thus time) freedom.
• Waking up and deciding whether to roll out (of bed) or roll over.
• Being able to spend your time doing what you want to do, helping who you want to help, knowing your decisions are not influenced by financial considerations.

Financial freedom differs from person to person. You may only require $50,000 a year to buy back your time while someone else needs two or three times that amount.

Our mind’s images (you know, those automatic ones) reveal a lot about where we are headed. Those pictures we carry about on the inside of us are like compasses that navigate and point us towards the future we “see”. We need to change the images on the inside of us (on purpose) so they reflect the life we actually want; or dream of. Failure to do this will render us as victims of the way we have been conditioned to think.

Why Did I Change The Meaning Of The Word – “PROP”?

For a number of months now we have been promoting a special complimentary and no obligation offer that many, many people have taken us up on. I called this (over the internet one on one) session a “Personalised Retirement Options Plan” (PROP). But can you guess what this caused? The very inclusion of the word retirement has influenced a number of younger people to think that a PROP was not for them… as well as people in their 60’s intending on only working for another couple of years or so hopeful that we may be able to somehow help them to compensate for their lack of retirement planning. Of course, I wish there was something we could do to assist older people to retire with dignity but the reality is that we must have that plan sorted and in place many, many years before we consider exiting the workforce.

So, given the word “retirement” was confusing for some, we are now calling the PROP a “Personal Results & Options Plan”.

Personal Results & Options Plan (PROP)

While the luxury of complimentary and no obligation support from competent and ethical people may be rare in this industry… that’s exactly what mrd offers. Our point of difference is not just in the range of services we offer but in the way we will treat you.

If you have not yet been exposed to what we (now) call a “Personal Results & Options Plan” (PROP) and experienced the power of mrd’s “Retire On Your Equity” (ROYE) software to chart a workable plan forward for you; I recommend you ask today. The word has obviously got out in recent weeks and months as (literally) hundreds of people have taken (or are taking) up this offer.

We won’t offer you financial advice but we will share our experiences, strategies and the “why” behind why we do what we do. From the comfort of your home (or office) we conduct these one on one sessions over the internet. They are very informative and in keeping with our focus on education and mentoring are designed to provide you with accurate knowledge that will further empower you to make “right decisions” for yourself. We offer this PROP to you without cost or obligation… and that of itself is unique in the marketplace.

Because these appointments are mostly done over the internet it doesn’t matter where you live. Of course if you prefer and it is convenient you can come to our office; but for many the privacy of their own home works best.

The PROP is not aimed at those planning to retire soon, rather those who have time on their side that they want to make the most of. I guess it’s for anyone not wanting to end up broke and prepared to take action… today.

Who Is A PROP For?

• Are you working?
• Do you have equity in an existing property (yours or someone else’s) and/or a cash deposit?
• Are you serious about taking charge of your tomorrow by doing something today?

If so, let us powerfully demonstrate (using our proprietary ROYE software) how possible it is for you to build your own workable plan.

We understand that your desire to explore possibilities and options is because you want to learn… and we will never interpret that as a license to sell; that’s our promise!

NB: The take up to this complimentary offer has been so popular that we now have a backlog of clients in a queue waiting for a PROP. Requesting a PROP today will involve a wait of a couple of weeks, sorry.

Yes please:

• I would like to speak with an mrd Property Mentor to determine if I qualify for a complimentary, no obligation PROP >>>here
• Detailed explanation of what a PROP is >>>here
• So as to personalise and accurately complete a PROP on your behalf we will first need to assess your borrowing capacity. You can complete this online (secure and encrypted) >>>here

What others are saying about mrd

Happy Investing,

Nick Lockhart
mrd Customer Care Program… because investing is personal

The first opportunity…

is in South East Queensland where mrd has teamed up with Five Star Design and today we are offering a selection of good value houses in various locations that you can choose with the help of an mrd property mentor. For further information, view the featured property article on ‘Five Star Design’ in the right hand column of this page and download our property report.

The second opportunity…

is at Watanobbi on the NSW Central Coast – near Tuggerah Lake, Wyong & The Entrance.

Stamp Duty Cuts… act quickly

On 8th June 2010 NSW treasurer Eric Roozendaal announced in his budget that Stamp Duty cuts totalling $140 million including the country’s first zero per cent tax, for off-the-plan purchases worth up to $600,000 in NSW.

mrd’s House & Land opportunity offers home packages from just under $365,000! Full details for ‘Watanobbi Downs’ will be available next week but we are letting mrd clients know today, because these homes are selling very fast, the opportunity is limited & you will need to act quickly.

Contact the mrd office for further details on 07 5580 8888 or >>>Contact Us Here

On 28^th May 2010, Martin Bell, from mrd wrote an article which highlighted the fact that with property investment It’s Not What You Buy – But Where! that’s important.

Martin Wrote…..

“A recent article in Brisbane’s Courier Mail – Price Growth Is Strong Near Railway Lines - identifies that properties near train stations have grown in value faster than those in other areas. This article prompts me to write that again, It’s Not What (You Buy) But Where!

I assume you want the best results from your investment efforts; if so read on… When describing what they’re looking for, people generally tell me the type of property they’re after. Some say they want a ‘house and land’ type investment, others a townhouse in a certain area etc. I disagree! People don’t really want a specific property type in a specific area; they want an outcome, a result!”

The full article may be viewed here,

http://investmentmentor.com.au/from-the-desk/its-not-what-you-buy-but-where

Personal Results & Options Plan (PROP)

Making decisions that are right for you should follow the gathering of accurate and reliable information. We believe that the best first step you can take is to request what we (now) call a “Personal Results & Options Plan” (PROP). Yes, the luxury of complimentary and no obligation support from competent and ethical people is rare in this industry… nevertheless, that’s exactly what mrd offers. Our point of difference is not just in the range of services we offer but in the way we promise to treat you.

If you have not yet experienced the power of mrd’s “Retire On Your Equity” (ROYE) software to chart a workable plan forward for you; I recommend you ask today. The word is out, evidenced by the huge take up from literally hundreds of clients all around the country.

We won’t offer you financial advice but we will share our experiences, strategies and the “why” behind why we do what we do. From the comfort of your home (or office) we conduct these one on one sessions over the internet. They are very informative and in keeping with our focus on education and mentoring are designed to provide you with accurate knowledge that will further empower you to make “right decisions” for yourself. We offer this PROP you without cost or obligation… and that of itself is unique in the marketplace.

Because these appointments are mostly done over the internet it doesn’t matter where you live. Of course if you prefer and it is convenient you can come to our office; but for many the privacy of their own home works best.

The PROP is not aimed at those planning to retire soon, rather those who have working-time on their side that they want to make the most of. I guess it’s for anyone not wanting to end up broke and prepared to take action… today.

Who Is A PROP For?

• Are you working?
• Do you have equity in an existing property (yours or someone else’s) and/or a cash deposit?
• Are you serious about taking charge of your tomorrow by doing something today?

If so, let us powerfully demonstrate (using our proprietary ROYE software) how possible it is for you to build your own workable plan.

NB: We understand that your desire to explore possibilities and options is because you want to learn… and we will never interpret that as a license to sell; that’s our promise!

The popularity of this complimentary offer has been such that we now have a backlog of clients waiting for a PROP; thus your request today may involve a wait of a perhaps a couple of weeks.

Yes please:

• I would like to speak with an mrd Property Mentor to determine if I qualify for a complimentary, no obligation PROP >>>here
• Detailed explanation of what a PROP is >>>here
• So as to personalise and accurately complete a PROP on your behalf we will first need to assess your borrowing capacity. You can complete this online (secure and encrypted) >>>here

What others are saying about mrd

Happy Investing,

Andrew Lockhart
mrd Customer Care Program… because investing is personal

What’s Your Property Investment Strategy

What’s your property investment strategy? Are you planning to speculate, renovate or trade… or like me does the idea of a buy & hold strategy offer more appeal? At mrd we call it “set ‘n’ forget… for busy people“™ (more here). This is a really important question because the strategy you choose determines both (1) the type of property and (2) the location your research should direct you to.

Step One

Backing up, your first step is to decide upon a strategy… please don’t be a wandering generality when it come to investing! As a property investor you are actually a business owner; even if you don’t yet appreciate that truth. Any successful business needs a clearly defined strategy that’s right for that particular business type. The local fish n chips shop does not need to implement and duplicate systems that work for the local motor mechanic; in fact that would be just plain dumb!

Is Kingaroy Really A Hot Spot

If you’re following a buy & hold strategy as we at mrd do… then it is important that you are wary of the commentary promoting areas like Kingaroy, for example. I have heard some rather strong recommendations for people to invest in areas that personally I would not consider. Conversely, I listened to arguments as to why not invest in areas that I am excited about. I’m not saying it is wrong to invest in some of the regional centres being touted as the new trendy, potential “hot spots” right now… I am just suggesting that perhaps these areas will not best serve the interests of those following a buy & hold strategy. Let me explain…

You hear on radio an interview with a property analyst tipping that a particular regional town (or towns) is likely to have the best growth over the next 12 to 18 months. He goes on to say that the capital cities and areas like South East Queensland are not likely to perform as well, and if he were you, he’d buy in Kingaroy.

One Size Does Not Fit All

Personally, I interpret this as offering blanket advice and unfortunately advice that will hurt some investors as one size does not fit all.

Buy & Sell

Chasing the next “hot spot” is perfect for someone following a buy & sell strategy. In such instances an investor’s focus ought to be on “timing the market”.

Buy & Renovate

As with the buy & sell strategy, chasing the next “hot spot” works well for those embracing a buy & sell strategy. These investors of course need to find the “perfect renovator” and do their sums carefully. Ideally their “perfect renovator” should be located in an area that’s undervalued today and likely to see a spike in growth in the near term.

Again, it’s “timing the market” that’s important… not long term growth prospects as renovators (as with traders and speculators in property) do not intend on staying in a market long term.

This is why I emphasise the need for you to first determine the strategy that is right for you; the one you will commit to. Once you have the knowledge to make such an informed decision, the “trick” is to not allow yourself to be tossed to and fro (like a yacht at sea with a broken mast) by unavoidable commentary and conflicting opinions spruiked by any one of the many voices we “forever hear”.

mrd “set ‘n’ forget… for busy people” ™ Strategy Of Buying & Holding

I believe speculating, renovating and trading to be inferior strategies to the mrd “set ‘n’ forget… for busy people” ™ approach of buying & holding property that we both practice and teach. I can confidently say that our investment strategy is safer and is more certain to deliver long term wealth.

When investing in property that you hold for at least the medium to long term; but ideally forever, you are not trying to find “tomorrow’s hotspots”. Your focus is not on “timing the market” but “time in the market”. I am not as concerned with what the market will do next month or next year but how it performs over the long term… because that’s how long I intend to be there!

Other Strategies

Other strategies such as buying & selling; buying, renovating & selling, trading and/or speculating (to name a few), require your careful and ongoing attention. No matter how in touch you may be with the market and market forces, a higher level of risk is unavoidable. Most people lead full lives. They spend their days travelling from home to work and work to home. They have family and other commitments and they find the “urgent and immediate” tend to crowd out their ability to attend to the “long term and important”; namely securing their families financial tomorrow.

These “other” strategies may sound good or look “sexy” but in reality they’re just not a compatible fit for the busy lives that most people lead… and therefore they either don’t get around to getting started or, if they do, they tend not to achieve much success from their efforts.

Purchase costs such as your time, stamp duty; legal and lenders charges etc., must be absorbed. Then when selling you have advertising and selling agents’ commissions to pay followed by either capital gains tax or income tax; depending on how your activity is viewed by the Australian Tax Office (ATO). Don’t forget interest on borrowings which is not offset by a rental income when renovating; not to mention cost blow outs! Even if you get these all right… when it comes time to sell a renovated property will the market still pay what you need it to pay to justify your efforts and make a profit? Again I call this a speculative approach that will not work for the average person wanting to profit from real estate.

The list is long and for times sake I won’t go into all my reasoning. We have proprietary software that accurately demonstrates what you can reasonably expect to end up with following our buy & hold strategy in different areas offering different average capital growth rates. Please request a Personalised Retirement Options Plan (PROP) if you would like to see this done over the internet and onto your computer screen in the comfort of your own home. We can demonstrate the futility in chasing short term price spikes at the expense of long term consistent price growth. After all… the goal ought to be the outcome, the destination… achieving what it is that you set out to achieve!

I call investment strategies speculative when you are banking on an industry or change in government policy to get a result. Again, there is nothing wrong with doing your research and capitalising on such things but to have the opening of a new mine as the primary force behind your decision is silly, in my opinion. As quickly as a mine opens it can close and wreak devastation on a community.

Mines That Closed

• Tennant Creek; NT: Closed due to an exhaustion of economic reserves at all mines and an inability to access promising exploration targets; due in part to the implications and ramifications of Native Title Legislation
• Mt Todd Gold Mine, NT: Economies of scale to reduce unit costs to an acceptable level could not be achieved due to depressed gold prices, a lower than expected head grade, unexpectedly hard metallurgic ally complex ore and environmental issues, all leading to an exhaustion of further operating capital
• Woodcutters Mine; NT: The official reasons for closures were the exhaustion of economically recovered reserves, unattractive commodity prices and production difficulties.

Other examples include:

• Oakdale Colliery, NSW
• Alluvial Sapphire Mines, Inverell, NSW
• And in Broken Hill, Kalgoorlie and Mount Isa

Ford’s Geelong Plant Close In July 2007

Three years ago next month, The Ford Motor Company confirmed its plans to close its engine assembly plant at Geelong in Victoria, costing 600 jobs.

CSIRO’s Rendel Laboratories In Rockhampton Closed

On Mar 31st 2010 the Federal Opposition said the cattle industry will be the loser when the CSIRO’s Rendel Laboratories in Rockhampton closed that day.

In Summary

If you want to trade, renovate or speculate in property you can. Just go in with your eyes open and do your research. To reiterate again my earlier comment… if you are following a buy & hold strategy… beware of commentary promoting areas that are tipped to have a short term spike in price growth for one reason or another.

With responsible consideration for those areas you can reasonably afford to buy into and hold property in, my strong suggestion is that you should seek out those places where there is strong evidence to support an expectation of healthy and consistent capital growth over the medium to long term. Even within each investment strategy type… one size does not fit all. There is a need to tailor your approach to your situation, budget, commitments and so on. An understanding of supply & demand, population movements, infrastructure as well as future demographics and trends are just some of the things that will assist you to make fully informed decisions that are right for you. See also “Stupid Things To Avoid In Property Market Cycles”

Support From Competent And Ethical People

While the luxury of complimentary and no obligation support from competent and ethical people may be rare in this industry… that’s exactly what mrd offers. Our point of difference is not just in the range of services we offer but in the way we will treat you.

If you have not yet been exposed to what we call a Personalised Retirement Options Plan (PROP) and experienced the power of mrd’s “Retire On Your Equity” (ROYE) software to chart a workable plan forward for you; I recommend you ask today. The word has obviously got out in recent weeks and months as (literally) hundreds of people have taken (or are taking) up this offer.

Personalised Retirement Options Plan (PROP)

While we will not offer you financial advice, we are happy to share our experiences, strategies and why we do what we do in an online meeting (i.e. over the internet).

We call this meeting a “Personalised Retirement Options Plan” (PROP) and offer it to you without cost or obligation.

As these appointments are over the internet it doesn’t matter where you live. Of course if you prefer and it is convenient you can come to our office; but for many the privacy of their own home works best.

NB: A PROP is not aimed at those planning to retire soon. If you have not already worked a plan it may be too late for you; sorry.

Our complimentary, no obligation offer is for those who still have time to avoid ending up broke.

Who Is A PROP For?

• Are you working?
• Do you have equity in an existing property (yours or someone else’s) and/or a cash deposit?
• Are you serious about taking charge of your tomorrow by doing something today?

If so, let us powerfully demonstrate (using our proprietary ROYE software) how possible it is for you to build your own workable plan.

We understand that your desire to explore possibilities and options is because you want to learn… and we will never interpret that as a license to sell; that’s our promise!

NB: The take up to this complimentary offer has been so popular that we have a backlog of clients in a queue waiting for a PROP. Requesting a PROP today will involve a wait of a couple of weeks, sorry.

Yes please:

• I would like to speak with an mrd Property Mentor to determine if I qualify for a complimentary, no obligation PROP >>>here
• Detailed explanation of what a PROP is >>>here
• So as to personalise and accurately complete a PROP on your behalf we will first need to assess your borrowing capacity. You can complete this online (secure and encrypted) >>>here

What others are saying about mrd

Happy Investing,

Nick Lockhart
mrd Customer Care Program… because investing is personal

AAMI invited auditions for their next TV advertisement and our third child (second daughter entered).

The competition was pretty lame and today we heard today that she was the winner of round 3 (final round) and will be receiving a debit card charged with $2,000 for her efforts – she’s so excited.

At the time of writing this she has not yet been posted as the winner but that is supposed to happen sometime today.

In the meantime, Natasha’s entry can be viewed by going to the AAMI competition website and then clicking “View All Videos”.

You can view Natasha’s entry on the 4th last page (of 14). She’s the girl 2nd from the top on the left hand side holding the guitar.

You can also view a collection of cover songs she has posted onto YouTube by typing Natasha Lockhart into the search section… Or just follow this link. Natasha has been asking me to give her a YouTube plug for some time and want as many followers as she can get.

When referring to Blue Chip investments most of us think of shares in big solid and stable companies that consistently perform well, delivering strong dividends back to shareholders along with steady capital growth.

So How’s That Working For You?

We keep hearing in the media that the debate around the whole Resource Super Profit Tax (RSPT), along with the challenges in Europe have resulted in the resource sector taking a massive hit as share prices have tumbled.

The top US lawmaker Nancy Pelosi on Thursday turned up the heat on BP, saying the company should first compensate victims of the Gulf of Mexico disaster before awarding a shareholder dividend. She went on to say they should be paying small businesses first and that “BP must be held accountable.”

“People in line for a dividend payment from BP, which has yet to be scheduled, might be better able to absorb a loss than fishermen and workers in small businesses on the Gulf Coast”; said Pelosi.

Who would have imagined a couple of months ago that the value of shares in BP and BHP Billiton would have free-fallen, like we have recently witnessed? The resources sector was among the “bluest” of blue chip.

On the 7th of May, the biggest intraday point drop ever for the Dow Jones Industrial Average may have been caused by an erroneous trade entered by a person at a big Wall Street bank (now known as a “fat finger” error ) – one that in turn triggered widespread panic-selling that wiped about $US1 trillion ($AU1.1 trillion) from the collective value of US stocks. The trade apparently was put in on the Nasdaq Stock Market, and is believed to have involved the entry of a ‘b’ for billion instead of an ‘m’ for million.

The housing market is not affected by anything like these errors where a mistake by one person or one company effects the whole market dramatically.

What About The Banking Sector?

Again, another strong sector. Australian banks are certainly considered blue chip. That said, we don’t know what we don’t know… just like pigs don’t know that pigs stink. I am certainly not taking aim or bagging other investment classes, but I am pointing out that decisions taken by company directors and governments can change the fate and/or fortunes of a company.

Yes it can be argued that the property market too is subject to the effects of outside influences and I suppose this all adds up to why 95% of Australians will live their lives paralysed by fear, confusion and uncertainty… and simply do nothing!

Doing Nothing IS NOT The Answer

Doing Nothing IS NOT The Answer as that course of action virtually guarantees long-term financial failure. With few exceptions, I believe we have but three ways to fund our retirements:

1. Inherit it
2. Steal it
3. Learn to manage (the right kind of) debt responsibly

Are you are afraid of debt? If so, let me ask “do you have an inheritance coming your way or do you intend to steal what you will need”? To hear how my warnings and recommendations on responsible debt management, please view the recording of my recent live event national tour… “How To Prosper In The Slipstream Of Population Growth” >>>here.

Glenn Stevens, Governor of the Reserve Bank of Australia (RBA) has come out this week and warned Australian householders against over indebtedness. I agree with his comment as debt needs to be responsibly managed as well as understood. Generally speaking I find that people are too quick and too willing to embrace horrible debt; the kind of debt that only hurts. Equally they are too slow and unsure of utilising productive debt; the kind that can deliver great prosperity.

I will not elaborate on these thoughts today, you can click on the various hyper links to read what I have said previously… suffice to say that regardless of the times, my opinion is that we should always be looking to ways of responsibly and safely moving forward. Thus why I am more convinced than ever that a blue chip property investment strategy is the way to go!

What Is A Blue Chip Property Investment Strategy

• Residential only - Not rural, industrial, commercial or retail. Everybody needs a roof over their heads, in good times and bad.
• Areas of limited supply and growing demand - ensuring a long-term demand for your property
• As close to infrastructure as your financial situation allows - Our proprietary ‘Retire On Your Equity’ (ROYE) software demonstrates better than anything I have ever seen, the cashflow vs. capital growth equilibrium of holding property in different areas. Upon request we will demonstrate this for you; without cost or obligation
• Permanently let - Not student accommodation, retirement villages, holiday let or serviced apartments
• Median priced - The median price differs from area to area, but not low socio-economic or executive rentals
• Buy & hold - Not speculating, trading or renovating
• New or near new - For maximum depreciation, certainty of costs & outgoings, most attractive to tenants and new equity preceding (and therefore covering) renovation/replacements costs

For a comprehensive understanding of the types of property mrd looks at… and why please, view see the these previously written articles:

• Invest In Retirement Villages
• Property – Type Or Outcome
• How To Profit From Residential Real Estate
• The Long Term Impact Of Negative Vs. Positive Geared Property
• Why I Only Invest In Residential Real Estate
• It’s Not What (You Buy) But Where
• mrd’s Property Selection Bias

Support From Competent And Ethical People

While the luxury of complimentary and no obligation support from competent and ethical people may be rare in this industry… that’s exactly what mrd offers. Our point of difference is not just in the range of services we offer but in the way we will treat you.

If you have not yet been exposed to what we call a Personalised Retirement Options Plan (PROP) and experienced the power of mrd’s “Retire On Your Equity” (ROYE) software to chart a workable plan forward for you; I recommend you ask today. The word has obviously got out in recent weeks and months as (literally) hundreds of people have taken (or are taking) up this offer.

Personalised Retirement Options Plan (PROP)

While we will not offer you financial advice, we are happy to share our experiences, strategies and why we do what we do in an online meeting (i.e. over the internet).

We call this meeting a “Personalised Retirement Options Plan” (PROP) and offer it to you without cost or obligation.

As these appointments are over the internet it doesn’t matter where you live. Of course if you prefer and it is convenient you can come to our office; but for many the privacy of their own home works best.

NB: A PROP is not aimed at those planning to retire soon. If you have not already worked a plan it may be too late for you; sorry.

Our complimentary, no obligation offer is for those who still have time to avoid ending up broke.

Who Is A PROP For?

• Are you working?
• Do you have equity in an existing property (yours or someone else’s) and/or a cash deposit?
• Are you serious about taking charge of your tomorrow by doing something today?

If so, let us powerfully demonstrate (using our proprietary ROYE software) how possible it is for you to build your own workable plan.

We understand that your desire to explore possibilities and options is because you want to learn… and we will never interpret that as a license to sell; that’s our promise!

NB: The take up to this complimentary offer has been so popular that we have a backlog of clients in a queue waiting for a PROP. Requesting a PROP today will involve a wait of a couple of weeks, sorry.

Yes please:

• I would like to speak with an mrd Property Mentor to determine if I qualify for a complimentary, no obligation PROP >>>here
• Detailed explanation of what a PROP is >>>here
• We will need to assess your borrowing capacity before we can do a PROP. Completing this online (secure and encrypted) can be done >>>here

Happy Investing,

Nick Lockhart
mrd Customer Care Program… because investing is personal