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Catherine's Chat

Wholistic Financial Solutions provides information and updates regarding the property investment industry. Learn more from Catherine's chat here.

WFS In the News

Wednesday, February 03, 2016

Catherine Smith from Wholistic Financial Solutions comments on the Canberra Property Market

Property Hotspot

Thursday, October 01, 2015
South East Queensland



• Strong population growth
• Nation’s 10th largest city
• $2 billion University Hospital
• $5.3 billion Oceanside Kawana
• $350 million expansion of
Sunshine Plaza
• $2 billion light rail
• $150 million private hospital
• Caloundra South development
• Economy based on tourism,
retail, healthcare, construction
and education 


The Sunshine Coast market in 2014 returned to growth for the first time in six years.


Having previously been hampered by a struggling tourism economy, an over-­‐supply of dwellings and poor affordability, the coast has now moved into a strong growth phase.


(Source: Terry Ryder - Hotspotting)

Is a Real Estate Agent your Friend or Foe when Purchasing Property?

Tuesday, September 09, 2014

Most of you will have heard horror stories about real estate agents, their dirty tricks and the ways in which they attempt to trick buyers on a daily basis.

Real Estate Agents have often being likened to Sharks and Shonks and regarded as more honest than only car dealers. 

But there are also some very trustworthy agents in the market also and there are a few tips and tricks to help you find them.

The first trick is to deal only with the most experienced agent in from reputable firm. If possible, deal with the senior principal.

This agent knows their business inside out and has a wealth of experience that you can utilise. Real estate agents are a necessary evil in your real estate dream team so make sure you find one you can trust.

Agents are after the best commission they can gather on a sale so they work to maximise the price for the seller.  This is great if you are a seller but not so great if you are a buyer.  On the other hand real estate agents know that a ‘sale in the hand’ is better than a sale in the bush. So utilise this to your advantage if you are a buyer and make it clear to the agent that if they don’t get you a good price you will not buy.

Also, there are no agents who charge a fixed commission regardless of the sale price.  These types of agents are fast becoming the favourites of the selling public who like to know their costs upfront and same too for the buying public who enjoy the fact that the agent is looking for turning over as many sales as possible in the shortest amount of time, and therefore won’t be wasting time chasing the highest sales price.

What to look for in an agent?

  • Ensure they are fully licensed
  • Check out their experience
  • Find out the details of their commission
  • Monitor their negotiation skills
  • Determine if can trust them
  • Determine whether you like the way in which they operate

When dealing with an agent.

  • Be friendly
  • But never reveal the amount you can afford to spend
  • Remain confidential on the dollars until you make your offer
  • Sick to your ceiling price and do not budge from it
  • Never let an agent know that you are overly keen on the purchase
  • Remember, real estate agents are trained in advanced persuasion techniques - keep your wits about you at all times.

Things you should consider using when Purchasing Investment Properties

Tuesday, September 09, 2014

The sale of a property within Australia will be conditional upon the execution of a building and pest report.

Not only does this protect the investor by making sure the property is structurally sound, but it also protects the lending institution, ensuring they do not loan money on a home that is possibly in structurally defected.

Even new properties can have serious building and pest issues, especially if the materials used were inappropriate for the construction, but used as a cost cutting mechanism by a shady developer.

Older properties inevitably have several possible problems that the buyer should be aware of from the outset.

Before you make an offer on a property, you need to have appointed a trusted and qualified building and pest inspector.


Because once you sign a contract on a home you usually only have 14 days before you are expected to go unconditional with the sale.

The building and pest inspector will report on the quality and condition of the property in question if the property is found to be extremely poor quality or perhaps has an invasion of white ants you will be glad, as a buyer, that your purchase was conditional upon a satisfying report from your building inspection.

A poor report can basically get you out of a sale that would be a poor investment decision within your portfolio.

Insurance will be one of your best pieces of ammunition in managing risk and protecting your assets.
An insurance broker will assist real estate investors to find the best-suited insurance product to cover them for liability.

There are literally hundreds of different insurance packages out there, and finding the right one at the right price to suit your requirements takes more effort than its worth.

If you let an insurance broker do the ground work for you, not only will they have a better understanding of your insurance needs and the players within the industry that can provide them, they will also save you time and will not cost you a cent.

The commission fees charged by insurance brokers come from the insurance underwriters, not the insurance customers this is very good news!

An insurance broker will be an incredibly useful member of your real estate expert team.

The Importance of a Property Coach in Property Investing

Friday, August 22, 2014

property coach

Investment Property Coach

“Discover why most property investors fail – and what to do about it”

Why Do I need an Investment Property Coach?

This is very simple.

Most ‘wanna-be’ property investors fail because they fail to ‘act’. They really, really want to do something but they just don’t know where to begin. They start researching and get even more overwhelmed – there is so much out there! Many people then suffer from ‘paralysis of analyses’.

They get so caught up trying to pin-point the best time to buy, the best location to buy in, and the best type of property to buy. In the end they simply DON’T buy.

investment propety coach

Many people want to research and research until they are absolutely, 100%, without-any-doubt sure that they are entirely correct and certain of their decision. If they wait till then they will simply never buy. As an experienced property investor I know you can never be 100% sure you have got it right. Even the most experienced investors get the 'D-Day’ (exchange and settlement day) jitters. It is human nature to have fear and doubts.

Other people want to do it but just can’t work out how to put aside that extra $2 a day. And I am serious, that’s all it costs at the moment to buy a property (depending on your tax bracket and the type of property you buy).

Others are just not sure whether they should invest first or buy their ‘white picket-fenced’ house for the Golden Retriever and the kids and invest later. Others simply think, “I can’t do it. It would be too hard for me.”

So what’s the answer?

Get a coach!

“What?” you say, “What’s therapy have to do with investing?” Well, a lot actually.

What is a property coach?

An investment property coach can help you determine things like:

What is your definition of success?

1.           Are you there yet?

2.            What do you really want to achieve in life?

A coach can give you the support and encouragement you need to achieve your goals. They are someone who is on your side, objective and ready to assist with any blocks or challenges you may face along the way. A coach will provide guidance and help inspire you to design your financial and life journey. They will celebrate the good times with you and provide encouragement during the challenges. They can teach you to how to examine your financial beliefs and values, trust your instincts and build your excitement to be the best that you know you can be.

A coach will help you:

•       find out where you are at right now

•       look at alternative options should anything not be working for you

•       put into place the new actions to help you reach your desired destination


Subscribe to investment property coach Catherine Smith:

For More Investment Propety Advice check out the video below

Real Estate and Superannuation is the most Powerful Wealth Creation tool of all

Monday, July 14, 2014

Since time immemorial it has been argued by numerous opponents as to whether the benefits of investing in property outweigh the tax concessional environment of superannuation. 

From a cynic’s point of view, one could say that the opponent’s opinion’s debate varied considerably depending on their own bias.  And this bias seems to be greatly influenced by the advisor’s commission structure. 

Funnily enough, analysis provided financial advisors proved, without a doubt, that superannuation and shares is the way to go whereas just as convincing arguments, raised by property spruikers, real estate agents and mortgage brokers, suggested that property was by far the superior investment.

Who should you believe? 

A new battalion – property and superannuation join forces?

The battlefield has changed and changed dramatically. 

Why would you choose Property over Super OR Super over Property, when you can have the best of both worlds instead!

So Why has the front line shifted?

New laws introduced in September 2007 allow Self Managed Superannuation Funds (SMSF’s) to, for the first time, buy geared property in a simple and uncomplicated manner. 

SMSF’s can now select a property of their choice, be it;

  • residential
  • commercial,
  • or rural

and borrow up to 75% of the value of the property. 

Previously an investor had to choose between;

  • using his spare funds to invest in a negative geared property,
  • OR contribute the funds to superannuation.  Let’s have a look at an example comparing the two alternatives.

Comparing the two – Option 1:

Take Johnny who is 35 and purchases an investment property.

Presuming average capital growth of 7% and rental yield of 5% (both very achievable) the following scenario occurs at age 60.

Value of Property:  $1,775,328

Mortgage owing: $350,000

Net Value: $1,425,328

Plus, the property has been cash flow positive since year 7 netting a cash flow of $584,480 which Johnny could use for further property investing.

Taking tax out of this amount will bring the returns down to:

                        Net Capital Gain: $1,211,529

Net Cash flow: $409,136

Overall Outcome: $1,620,665


(*Presuming a 30% tax rate,8.5% IO Mortgage rate,rent yield grows at 6% in line with property growth, excess cash flow taxed)

Comparing the two – Option 2:

Compare this to Sally who invests the same amount as Johnny into superannuation. Presuming the same growth and yield (if his superannuation was invested in a well diversified growth portfolio) he would achieve a superannuation balance of $432,658 by age 60.  This is well short of the gains made by Johnny.

(*Presuming a 15% tax rate, contributions include the initial deposit and the cash flow shortfall and cease in year 7 when property cash flow positive, no CGT as investment held until after age 60)

Comparing the two - An un-biased opinion

As any professional advisor and serious investor should know there is more to consider than the pure numerical outcome.  Whether considering property or superannuation other important factors need to be considered. 

One of the most important factors is the stage of the investor’s lifecycle. 

In the working years of an investor’s life a strong cash flow allows the possibility of using gearing strategies to maximize returns thus making property a preferential option. 

Once the investor reaches the pre-retirement phase, it may be unwise to take on the risk of gearing.  Therefore, this may be the preferential time to consider locking away as much as possible into super.

The most common investment strategy seen in the baby boomer era was to invest all surplus funds into accessible investments including property and shares and then cashing these in and contributing the funds into super just prior to retirement.  The only disadvantage of this strategy was a potentially very large Capital Gains Tax bill.

Why would you buy property in a SMSF instead of personally?

For many reasons including;

  • you get the benefit of ‘leverage’,
  • a maximum of 15% tax on any rental income in excess of costs,
  • you receive a tax deduction for the loan repayments of principal (which is normally impossible) via salary sacrificing the amount required to cover the shortfall,
  • asset protection – the asset is protected from creditors in the event of a lawsuit or bankruptcy (some conditions apply),
  • the property can still be sold and the loan repaid at any stage,
  • any capital gains on the property when sold will be taxed at a maximum rate of 10% (if asset held for more than 12 months)


But the biggest incentive of all – if you keep the properties until age 60 and commence a pension from the fund;

  • any capital gain on the property will be TAX FREE,
  • any rent on the property will be TAX FREE,
  • any income paid out to you will also be TAX FREE.


The laws are only new and law complying products are now being introduced and marketed.  It is envisaged that these products will hit the market like a storm once investors realize the potential.  There are already over 350,000 SMSF’s operating in Australia and it is likely that this figure will increase exponentially once knowledge of the loan products becomes widespread. 

In fact, as at May 2010, SMSF’s are growing at a rate of 2500 per month.

It is also interesting to note that this may be the first time in history that all advisors (financial planners, accountants, auditors, property advisors and mortgage brokers) have a common ground for advising clients.  All advisors have something to gain by assisting clients into these products. It’s not only a busy time ahead for advisors but a time to join forces and put a cease fire on the battle.

Will Australia Crash like America did?

Friday, May 30, 2014


Comparing Australia to America is like comparing Chalk and Cheese’.

As explained in earlier chapters Australia has a

  • Massive undersupply of houses
  • Record Population growth
  • Vacancy rates are at a record low.
  • Demand > Supply

In contrast America has a

  • HUGE oversupply of houses – empty streets, empty suburbs – where no-one wants to rent or buy
  • Very low population growth – if fact, American’s are deserting their own country
  • Horrendous vacancy rates
  • Supply far exceeds Demand

Australia also has different lending policies including 

  • No NINJA loans – Ninja loans are known as ‘No Income, No Job, No Assets’ No problems – here’s your loan.
  • The Amercian banks were also lending up to 110% of the value of the property. So it didn’t matter if the applicant had no deposit  - No problem – here’s your loan.
  • They gave out loans at 0% interest rate then hiked the rate up to 5% and wondered why the owners could no longer afford the loans.
  • They also have ‘Jingle Key Lending’  also known as ‘non-recourse’.  If you couldn’t afford the loan anymore, No problems, send the keys back to the bank and all will be OK.  The bank won’t chase you for anything

In Australia, on the other hand, bank requirements are much more onerous. ‘Lodoc’ loans only make up a very small % of overall lending in Australia and the banks are very careful to not go over 80% of the value of a property to a lodoc applicant.  Loan servicing ability is assessed at 2% above the current standard variable rate.  And all Australian loans (other than for SMSF’s which will be explained in later chapters) are full recourse loans.  If you default on the loan the bank will come after all of your other properties, other assets, your cars, your cash and even your husband or wife if you are lucky (just jokes).

Simply put, comparing Australia to America is like comparing chalk and cheese.

It is worth pointing out though, that America now, may be a fantastic investment opportunity for Australian’s.  You will need to read our later chapter on this issue.  It is not for the faint hearted but a great opportunity for those willing to take the plunge.

Do you want to know more? Click here to watch five free webinars on - ‘Proven, Must Know, Property Investment Advice’

Property Utilises the Power of Leverage

Friday, May 23, 2014


Leverage is one reason why real estate investment makes so much sense to so many of the wealthy.

Leverage = using other people’s money to make more money

Leverage is also described as making ‘more’ with ‘less’

In the example below – if you have $30,000 and you invest it in the bank you will make a 5% return (based on today’s rates) so $1,500.

But if you take the same $30,000 and invest it in a $300,000 property and lets say it only goes up by 5% (to compare apples with apples) then you have now made $15,000 – 100% more than simply putting the money in the bank.

How good is that?

And, if instead, the property went up by 10% (closer to the average) then you have made $30,000 or 20 times the amount you would have made by putting the money in the bank.


And you don’t have to feel bad about using other people’s money.  Institutions called ‘banks’ WANT you to use their money – they make money too. 

Leverage has been a tool used by mankind since cave man ages.  The first spear was invented to catch more prey than the bare hand could.  Then horses were used to pull carts to get us places faster.  The greatest form of leverage in today’s world is the power of the internet.

Property is unique for its ability to be leveraged as you as you can borrow up to 95% of the value of the property.  In contrast to shares where you are lucky if you can raise 60% of the value of the share.

This really means your property investment is working hard for you.

There is a multitude of ways to leverage property in your favour and these include;

  • Leverage the banks money to buy property to make you rental income as an investment;
  • Use rental yield collected from tenant to help pay the mortgage;
  • Improve the property to increase the value of the property
  • Improve the property to gain a higher rental yield.


Do you want to know more? Click here to watch five free webinars on - ‘Proven, Must Know, Property Investment Advice’

Property Provides Opportunities to Add Value

Monday, May 19, 2014


Very little effort can bring about substantial gains by adding value to your real estate investment.

Something as simple as clearing up the garden, a coat of paint, new carpets, modern bench tops or a new bath room can easily add value to a property.

Investors who are able to add value to their property may also do so while enjoying the benefits of tax deductions – either outright in the year incurred or depreciated over a number of years (more about this later on the ongoing costs and tax effect chapters).

Value-adding can also increase the property's cash flow potential - for every $10 extra rental income you get you can usually add an extra $5,200 to the valuation of your property.  This extra equity may be all that is required to get you over the line for your next purchase.

Deciding how to add value to the property is the biggest hurdle and you do not want to over-capitalize on the investment or its capital growth potential.

The simplest rule to follow when value adding to your real estate investment is to keep it simple.

If the kitchen is old and run down and potential tenants are deterred by its state it's probably worthwhile investing in a kitchen renovation. This can be done simply; maybe all you need to do it replace the bench top, splash back and repaint.

Similarly, re-painting the main rooms of the house can be cheap (particularly if you are able to do it yourself) and it can make the house far more appealing to renters (and valuers). 

Every little bit counts when it comes to adding value to your real estate investment -- and it's usually little changes which come at low costs that are most worth your while.

The more equity you have as capital leverage when re-borrowing the better.


Do you want to know more? Click here to watch five free webinars on - ‘Proven, Must Know, Property Investment Advice’

Rent Continues to Rise

Friday, May 16, 2014


You can buy some shares in a company with just a few hundred dollars. And you can start a bank account with just a few cents.  How much do you need to invest in real estate?

Real estate investment requires a far greater initial outlay than other investment options.

So how much do you need?

Generally, you will need at least a 5% deposit and you should also allow 5% for stamp duty, fees and charges (unless you are a First Home Buyer which will be discussed later). So allow at least 10% of the value of the property as your required contribution.

For example to buy a house for $350,000 you will generally need 10% = $35,000.

Ouch – there are ingenious ways to raise the 10% required which will be discussed in later chapters.

You then take a mortgage to pay for the balance of the property.

For example the $350,000 house above – you have paid a 5% deposit of $17,500 and spend the rest of your funds on fees.  You will then need to borrow the remaining $332,500.  This will be a 95% LVR (Loan to Value Ratio) loan.  Not all banks are comfortable with 95% loans.

In order to be granted a mortgage loan in the first place, particularly a 95% LVR loan, you usually have to present a deposit and proof of income information to convince the lender you will meet your mortgage repayments.

More detail on types of loans and the loan application process will be provided in later chapters

The good news for most Australians is that these days you can make the repayments on many mortgages for the same price you would fork out to rent a similar property.  Some banks will take the rent you have been paying consistently as evidence that you can afford the mortgage.

The initial outlay to buy your first property will sometimes deter the nervous investor from taking the plunge into property.

The hardest part of breaking into property investment is buying your first property. As long buy a good property in a good location (issues this book will help you with in later chapters), then you can generally move onto your next purchase, and the next purchase, quite smoothly from here. This is because of the combination of two powerful factors – Equity and Leverage.

Equity = the difference between the Value of the property and what you Owe the bank 

Leverage is explained in the following chapter.

If the first property you buy is a "bargain", or there is a surge in the market, or you manage to add value (see later chapters) may see you earn equity quickly.

Equity in one property can be used as leverage for your next buy, and so on and so forth.

Breaking through the initial capital requirement barrier will be your toughest problem, but once you utilise your friends Equity & Leverage, you will be able to move forward as a real estate investor with ease.


Do you want to know more? Click here to watch five free webinars on - ‘Proven, Must Know, Property Investment Advice’

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