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Last week the Reserve Bank of Australia (RBA) made the decision at it’s monthly board meeting to leave the official cash rate on hold. That means no adjustment to interest rates this month.

But Did The RBA Get It Wrong?

It will be interesting to watch what they do with interest rates in the months ahead. Their actions will be an indication of whether this months decision to leave rates on hold was the right one or not.

At the beginning of 2008 the RBA put interest rates up twice. At the time the opposition argued that the decision to do so was wrong and a reaction to Kevin Rudd & Wayne Swan talking up inflation; citing it as the # 1 enemy to go after. What they failed to recognise was that the negative economic impact coming out of the USA had already begun to work its way through the system and here in Australia the economic slowdown was just about to bite.

The numerous interest rate cuts later in the year is clear evidence that monetary policy in the early part of 2008 was wrong.

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As part of mrd‘s Customer Care Program and our ongoing commitment to you… we are making available the following special offer to anyone who has ever settled an investment property through mrd.

We have the software to prepare a complete financial analysis of the investment properties you have purchased through mrd to reveal what  the shortfall or surplus is each week; that is… what is it costing you to hold the property or how much is being put back into your pocket each week?

The changes in interest rates have changed most peoples cash flow situation significantly.  Many are now positively geared.

We will also give you an indication of what we believe your property is currently worth.

In order to complete this accurately for you we will need you to supply the following information:

• Taxable incomes before deductions allowed by your properties (this would be your gross taxable from your wages income or business distribution, after any salary sacrificing but before any property deductions.)
• Ownership percentages
• Loan amounts used for each property and the interest rates
• Property Purchase Cost
• Estimate of Current Value
• Body Corporate
• Rates
• Weekly rental
• Depreciation estimates (these are available from your depreciation schedule)

If you are an existing mrd property purchaser and would like to take advantage of our offer to prepare for you an up to date “Cash Flow Analysis Report” on your existing investment property; please click here.

Happy Investing,

Nick Lockhart
mrd Customer Care Program… because investing is personal

“There has never been a better time to buy property.” How many times have you heard this catch phrase from property spruikers and slick sales people? Well this time, it is true! You can take it from me, as a person who doesn’t sell property but lectures in property and most importantly, personally invests in property “There has never been a better time to buy property.”

Read Entire Article >> 2009 – not all doom and gloom – market comment from property professor Peter Koulizos – realestate.com.au.

Over the past 8 years or so speaking with all types of people on the subject of investing in property, many, generally new to investing, ask me the “what if” questions. My broad base of experience has meant my answers have generally put their minds at ease. Two questions, however, that I lacked a good solid answer for were:

1. How good will your portfolio be if we have another world war?
2. How good will your portfolio be if we have a worldwide recession or depression?

Well, with regards to Q 1, I still have no concrete answer for, and hopefully never will. With respect to Q 2, however, I can now (i.e. only now) say from experience… “It’s all ok”!

Read more…

Each year hundreds of thousands of homebuyers nationwide debate the merits of fixed versus variable rates when it comes to getting their home loan.

The current global market volatility and recent interest rate hikes have heightened interest in the debate leading to even more rate scrutiny.

Homebuyers are now more aware that loan finance decisions should be thoroughly explored. As a result, they are seeking the advice of home loan specialists who can help prioritise goals, examine financial circumstances, assess need for security and, ultimately, decide which side to take in the Great Rate Debate.

Commonwealth Banks Head of Retail Products, Michael Cant, takes the role of adjudicator to mediate the case between fixed and variable rates.

What is the difference between fixed and variable?

>>>> The Great Rate Debate – Yahoo7 Money Matters.

It was said recently that (when the chips are down) there is ‘no greater motivator than winds of disaster blowing up your butt’.

It may be a little descriptive… yet nevertheless so true! You see, it’s not what happens to us in life that determines our future, but rather how we respond (not react) to that which happens. Of course each of us are affected in some way by circumstances, but how we respond is our own choice! We should never allow ‘circumstances’ to control us… or deter us from our focus in life!

Consider the story of Colonel (Harland) Sanders…

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The Reserve Bank of Australia (RBA) will meet for the first time this year, next Tuesday. While it’s difficult to know exactly what they will do with official interest rates, I expect another generous reduction to be handed out; probably 1%; but certainly at least 0.75%.

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People of integrity expect to be believed; and when they are not, they let time prove them right! It’s exactly the same with wisdom.

Parents expect (or at least hope) their teenagers would listen to and act on their advice. When they don’t, they allow time and experience be the child’s tutor and settle the matter.

Driving to inspect a property the other day, a friend lamented: “The frustrating thing is that you warn your kids against making unwise decisions. They ignore your advice and when everything comes apart, you are left bailing them out”.

From time to time I experience this same frustration in my role as a Property Mentor; except I don’t have to bail anyone out afterwards. I set out to steer individuals away from potential (and sometimes certain) financial peril, to a life of prosperity, possibility and options. BUT when people are not open to hearing anything that differs from that which they have already concluded… sadly, and all too often, I have no option but to stand back and watch the results of their poor decisions unfold.

IMPORTANT Reality Check!!!

As tempting as they may be, “I told you so” are unproductive and unnecessary words. That aside, I’d be lying if I said I haven’t been tempted to use them more than once.

We are currently in a global downturn and while fear and ignorance drive most people to react… my very strong suggestion is that you do not react, but rather respond! How you respond… especially during these uncertain times, will have a major bearing on your quality of life… five, ten and twenty years from now!!!

Read more…

VISITORS and overseas businesses will soon be able to buy residential property more easily in Australia thanks to a lifting of restrictions.

The Federal Government has relaxed rules over foreign investment and it should benefit more than 7500 overseas buyers.

Market flexibility will be enhanced, while compliance costs for temporary residents and the construction industry will be reduced, Assistant Treasurer Chris Bowen said.

The definition of temporary residents will also be aligned with contemporary visa categories.

Under the present structure, all temporary residents and non-residents, including foreign businesses, must notify the Federal Government if they wish to buy a property.

They must also comply with post-purchase conditions, including rules surrounding its use, development and resale.

Residential real estate makes up more than 92 per cent of applications received by the Foreign Investment Review Board.

The changes, to be implemented early 2009, will update regulations that are almost two decades old.

>>> Buying Australian property to be made easier for foreigners | The Courier-Mail.