Do Changes to the Aussie Dollar Actually Mean Anything to the Property Market?

There is always speculation about whether fluctuations in the Australian Dollar are going to affect the property market. This is how many newspapers and forums get your attention. The headlines alone, whether the Aussie dollar is going up or down, are enough to create further speculation.

So what does it mean to the average home buyer looking to own property? The truth is, very little. There are always going to be surges and drops in the market and they are not all as a direct result or even have anything to do with the value of the dollar in ANY country.

There are so many variables that may affect the housing or industrial property markets that you cannot lay blame on what the currency value is alone.

So what other market variables should be considered?

Unemployment
High unemployment will definitely affect the market. This is due to an increase in foreclosures.

Oil and Commodities
An increase or decrease in the cost of these essential products can affect how much money people are spending at any one time and how much spare cash they have.

Tourism
When the Australian dollar is low, coming to this great country is way more attractive and certainly more affordable. The influx of overseas tourists, yes due to the low dollar, can change and affect property values should these tourists also be interested in buying property.

The Reserve Bank
The Reserve Bank controls the cost of lending money. We all wait with baited breath every time the Reserve Bank is going to release its findings.

Lower interest costs mean that consumers spend more. Higher interest costs would seem to mean less spending but not in all sections of the market.

What Does it All Mean?
If you have all of these factors in alignment, the moon is full and your tongue is hanging the right way, you may be able to predict and pinpoint the exact time to get in and out of the property market.

Time and time again, the economists have had it wrong and we have all survived.

What we say at Fountain Property Group is – go back to basics.

Do a budget to ascertain if you can afford to enter the property market.
Ensure you have enough capital (deposit) to invest in the deal.
Do your due diligence! – Research, research, research
If you do these three things, it does not matter what state the dollar is in when you enter the property market, you will be on a winning course.

Employer Funded Super – Helping It Work Harder

There is no doubt that investing in just about any kind of superfund is better than doing nothing. For some recently retiring baby boomers and the streams to follow them until 2028, there will be a vast number who will fall short of the dollar value required for them to retire comfortably with.

As this system was only introduced by the Keating Government in 1992, you can see how many of the early boomer births would not have created enough of a nest egg before they started retiring in 2011.
There is, however, absolutely no doubt though. If you get into your super early you are bound to make a huge dent in your retirement bill. How does setting the course to true freedom feel? Did you know that there are some real advantages in this system that not enough people are just not taking advantage of?

 

Tax Benefits

There are a few ways you can use your employer funded superannuation to your tax benefit.
You can make concessional payments into your spouse’s superannuation after tax is allocated. This may not seem attractive until you see note 2 below. You can salary sacrifice and pay up to $50,000 into your superannuation and only pay 15% tax. What a lovely nest egg. The Government will match your contributions dollar for dollar for any money paid into your account over and above the minimum your employer pays. This is also capped. That is to say, the amount you can contribute is capped. But wait for it, at $150,000! Whilst the Government only contributes a small amount you can see how the incentives stack up when you consider the whole lump sum compound interest that occurs when cash is invested long term.

Fountain Property Group are firm believers in ensuring your superannuation is progressing as well as if not better than CPI does. Visit it often to ensure its growth. It is important to keep that investment moving to gather as much investment momentum as possible. By adding to the fund yourself you add to the momentum to bring more energy to the investment.

Rome Wasn’t Built in a Day This form of investment is called delayed gratification. You sacrifice a little now for big returns at the end. This may seem a lot to some but just an extra $100 per month into your super and your money is doubled straight away!

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Do you need a Property Manager?

Property investors are often faced with the dilemma of choosing a property manager to maximise profit. Most people choose their property managers based on fees, but there are some considerations, because there is more to a property manager than just collecting rent.

You have to assess your personality and determine whether you have the ability to manage your tenants at a professional level. If a tenant falls behind in paying the rent, or damage is found during inspection, can you handle these issues professionally?

You, as the Property Manager should also be attuned to the legalities surrounding your property. Lease agreements, evictions and bond claims should follow legal procedures so that you can justify your claim. When seeking tenants for your property, do you have what it takes to advertise and gauge the right people for your property?

When you answer “no” to any of the questions above, it might be a good time to consider a Property Manager. These people are equipped with a marketing plan and will help you with your investment from start to finish. Property Managers have industry specific skills that will assist you in getting the most out of your property. When choosing a Property Manager, make sure your interest is their priority, after all – Investments should give you peace of mind and security.

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