“Safe as Houses”
There are many alternatives that may produce larger returns but have a much larger risk value and require a very solid knowledge base in order to be successful. Property investing has always been the way most Australians have created the majority of their wealth even if it was by purchasing their family home.
Strong historical performance - Property has performed strongly against various other asset classes over any period. Residential property outperformed the other investment types. Control - One major benefit of property investment is that the investor determines how to manage the asset Understanding - Another big advantage of property investment, and one which makes it so popular, is that people understand how residential property operates.
Safety - Most people feel safe investing in residential property as it is an asset that is tangible (something they can see and feel) and is relatively free from uncontrollable external forces. People will always need somewhere to live.- Asset performance - Residential properties have the ability to produce income as well as providing capital growth. A negatively-geared property can be cash-flow positive, based on the original purchase price, over a certain amount of time via rental increases.
Leverage - Financial institutions offer attractive loan-to-valuation ratios (LVRs) for residential properties. This means that "other people's money" can be used to leverage an investment thus yielding a higher return.
Tax advantages - It almost goes without saying that there are significant monetary benefits available through negative gearing or depreciating property.
Choosing the right property
“You don't want to get it wrong”
Property investment has been one of the most consistent investment performers in Australia for more than 60 years and continues to be the investment of choice for those looking for a safety and security with high growth. This safety and security are enhanced by excellent tax minimisations provisions and high capital growth of an appreciating asset. Why would you invest in anything else?
Property is the investment option that makes sense and there are certain criteria we must follow to ensure a successful investment. At Compass we take care of this for you.
These are:
• Location – Must be in a good location. A good location is directly linked to capital growth and occupancy
• Value for Money – Bank Valuations must back up the contract price.
• Rental returns – Min. 4.5% rental return.
• Infrastructure – Both current and future developments in the area affect growth.
• Design and Finishes – Does it meet investor and tenant needs?
• Quality and integrity of the developer – The developer must have a good
__track record and must have the financial capacity to finish the project.
How confident are we?
The Compass Group undertakes to pay the median rent quoted in the rental feasibility undertaken by Compass (usually a gross 4.25%.) We will pay this rental for 50 weeks in the first year and 50 weeks in subsequent years (i.e. after the first year the landlord covers a vacancy factor of 2 weeks in any one year).
The Rental Assurance commences at the date of handover of the property and such date shall be the anniversary date for a market rental review every two years. Rental Assurance comprises a let fee of one weeks rent payable with each new tenancy plus ten percent rental management fee. The assurance amount is a minimum rental. Any amount in excess of this is remitted to the landlord. If a Rental Assurance agreement is not required the let fee remains the first weeks rent from any incoming tenant and rental management fee is reduced to 8%. This offer is only available when Landlord Insurance is in force and Compass Property Services or a professional rental agent nominated by Compass manages the rental property.