Saturday Summary – the most interesting property investment articles I’ve read this week (2013/05/25)

There are more property investment articles, commentaries and analyst reports on the Web every week than anyone could read in a month. Each Saturday morning I like to share some of the interesting ones I’ve read during the week.

Enjoy your weekend…and please forward to your friends by clicking a social link buttons on the left.

Property investors face greater ATO scrutiny following $78 million data-matching budget handout

Property investors watch out!  The Tax Office is watching you carefully writes Larry Schlesinger in Property Observer…

Property investors who use questionable tax avoidance schemes will come under more sophisticated levels of scrutiny following the Australian Tax Office (ATO) receiving an additional $77.8 million in federal budget funding over the next four years.

The extra funds are aimed at improving compliance among taxpayers by “expanding data matching with third party information”.

The ATO will use the funds to undertake compliance activity to target “known tax scheme designers, promoters, individuals and businesses who participate in such arrangements”.

“This measure will tackle the use of abusive trust schemes in the wider community and encourage active compliance by taxpayers,” says Treasury in its federal budget papers.

The money will be used to strengthen existing reporting systems for:

  • taxable government grants and specified other government payments;
  • sales of real property, shares (including options and warrants), and units in managed funds;
  • sales through merchant debit and credit services;
  • managed investment trust and partnership distributions, company dividend and interest payments; and Centre transactions reported to the ATO by the Australian transaction reports and analysis

The ATO began using improved data-matching technology earlier this year to closely scrutinise residential and commercial property sales to ensure tax payers paid the correct amount of tax.

Treasury estimates this technology has resulted in an estimated increase in tax receipts of $431.7 million with a projected gain to revenue of $610.2 million over the coming financial year.

 

Top down approach to investing | will house prices rise or fall? | Is investing in super right for you? | Renovation lessons

Another great Real Estate Talk show  produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.

Details of this week’s show

Michael Yardney says that sometimes it is NOT a good time to invest
Louis Christopher from SQM Research says the markets are in equilibrium
Ken Raiss from Chan & Naylor details the questions you can ask to work out if it is right for you in your current situation
Barry Du Bois from the Living Room, about some of the worst renos he has seen
Michael Ryall from Archers Body Corporate who details a recent New South Wales case that went horribly wrong for the owners

You should definitely subscribe to this weekly audio program. Click Here It’s free and you can listen on the go on your smartphone, iPad etc.

 

Killer negotiation techniques

Monique Wakelin shares some great negotiation strategies to use if a property has been passed in at auction. She suggests:

…as the highest bidder, you made the last offer, so the onus is on the vendor to move off their reserve in order to begin negotiations. Don’t make any further offers. Wait for the agent to provide you the reserve. Once you receive the vendor’s reserve, do not feel you need to just accept it.  It is a counter-offer from the vendor and may be higher than the true reserve – the minimum the vendor is willing to accept.

[sam id=34 codes=’true’]

Another trick:

Ask the agent to justify the vendor’s reserve. Does the agent have examples of genuinely comparable properties that have sold around this price? Also remind the agent that no one else who attended the auction was willing to pay what you offered, let alone the reserve.

Should their reserve be tens of thousands above the quoted range, you can also ask why the quote was so low. This question may lead to a lower, revised reserve.

And…

This is also a good time to advise the agent that you wish to propose new terms and conditions, which sends the message that you are no longer bound by the rules set by the agent in the lead-up to the auction and that you are now on an equal footing. For example, you may propose a longer or shorter settlement period or, if you are an investor, request access to the property before settlement to show prospective tenants through the premises to minimise any loss of rent between settlement and securing a suitable tenant.

 

What does the typical Australian earn?

Economist Leith van Onselen summarized ATO data in MacroBusiness showing, the average wage for full-time workers is $72, 800 per year.  He says:

But remember – the average (ie. the mean) gives a misleading impression about what the typical worker earns. It is pushed upwards by the large salaries of a small number of very high income earners.

The median gives a more accurate sense of the typical worker’s wages. If you earn the median salary, your wage is in the middle of the distribution – it’s higher than 50% of workers and lower than the other 50%. Among full-time workers, the median was $57 400 in August 2011, which is the most recent figure.

Even this figure, though, is a little higher than the typical worker’s wage. That’s because it doesn’t include the 3.5 million people who work part time. When you bring them into the fold, the average wage drops to $56 300, and the median drops to $46 900.

What is the typical taxpayer’s income?

According to the tax data, the median taxpayer had a taxable income of $48 684 in 2010-11, the latest figures the ATO has made available.

Here’s a summary of the ATO’s data for 2010-11:

 If your 2010-11 taxable income was…  …then your income was
larger than this proportion of
taxpayers
$48 864  50%
$72 948  75%
$79 934  80%
$89 331  85%
$105 461  90%
$140 479  95%
$202 918  98%
$281 858  99%

[sam id=34 codes=’true’]

 

How the Rich Got Rich

Jeff Haden writes on Inc.com that happiness–in your business life and your personal life–is often a matter of subtraction, not addition.

Consider, for example, what happens when you stop doing the following 10 things:

1. Blaming.

People make mistakes. Employees don’t meet your expectations. Vendors don’t deliver on time.

Taking responsibility when things go wrong instead of blaming others isn’t masochistic, it’s empowering–because then you focus on doing things better or smarter next time.

And when you get better or smarter, you also get happier.

2. Impressing.

No one likes you for your clothes, your car, your possessions, your title, or your accomplishments. Those are all “things.” People may like your things–but that doesn’t mean they like you.

Genuine relationships make you happier, and you’ll only form genuine relationships when you stop trying to impress and start trying to just be yourself.

3. Clinging.

When you’re afraid or insecure, you hold on tightly to what you know, even if what you know isn’t particularly good for you.

An absence of fear or insecurity isn’t happiness: It’s just an absence of fear or insecurity.

4. Interrupting.

Interrupting isn’t just rude. When you interrupt someone, what you’re really saying is, “I’m not listening to you so I can understand what you’re saying; I’m listening to you so I can decide what I want to say.”

5. Whining.

Your words have power, especially over you. Whining about your problems makes you feel worse, not better.

6. Controlling.

Yeah, you’re the boss. Yeah, you’re the titan of industry. Yeah, you’re the small tail that wags a huge dog.

Still, the only thing you really control is you. If you find yourself trying hard to control other people, you’ve decided that you, your goals, your dreams, or even just your opinions are more important than theirs.

7. Criticizing.

Yeah, you’re more educated. Yeah, you’re more experienced. Yeah, you’ve been around more blocks and climbed more mountains and slayed more dragons.

That doesn’t make you smarter, or better, or more insightful.

Everyone is different: not better, not worse, just different. Appreciate the differences instead of the shortcomings and you’ll see people–and yourself–in a better light.

8. Preaching.

Criticizing has a brother. His name is Preaching. They share the same father: Judging.

9. Dwelling.

The past is valuable. Learn from your mistakes. Learn from the mistakes of others.

Then let it go.

10. Fearing.

We’re all afraid: of what might or might not happen, of what we can’t change, or what we won’t be able to do, or how other people might perceive us.

Don’t let your fears hold you back. Whatever you’ve been planning, whatever you’ve imagined, whatever you’ve dreamed of, get started on it today.

Today is the most precious asset you own–and is the one thing you should truly fear wasting.

 

Blogs you may have missed this week:

If you didn’t have a chance to read my daily blog, here’s a list of the blogs you missed this week:

This week’s property news video with Kevin Turner | 22nd May

What drives a real estate agent

So what exactly is happening with Australia’s housing finance?

8 Things You Should Not Do Every Day

3 Critical Property Negotiating Pressure Points

Why property investors are returning to the market

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About

Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been once agin been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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