2011 Winter

Depreciation Allow ances, as they pay a considerable
amount of tax.
2. They make decisions based on sound economic
sense, some might like to buy investment property
because they like it, or they might leave it to their
children, but most w ill listen to good advice and
make a considered judgement.
3. They don’t have time to w ant to know about small
repairs or worry about not enough rent, because
they have not borrowed to the kilt, and therefore
they can easily maintain their investment, relying
on professional advice.
4. Because they are practical business minded individuals,
they understand the limitation of the law s
governing tenancies and can logically and fruitfully
negotiate good outcomes.
5. Because they are mostly in business or managing
a business or a practice; they tend to lean tow ards
quality property managers and property professionals,
their aim is not get the low est rates but to
get the best service at competitive rates.
Finally: Property Syndicates, this is rare group of
people that put their resources together, purchasing
and managing good residential property. They
often include a Real Estate Agent, a law yer and
an accountant. These structures are less common
these days as do-it-yourself super schemes, have
largely taken over.
The residential market is very poorly served by the
various levels of Government and their inadequate
policies; here are some reasons w hy these bodies
are the cause of the falling standards of this sector:
Government policies and practices:
1. Registration of Property Managers are not recognised,
the Registration Certificate states the
person, regardless of gender, is a “Real Estate
Sales man”. A young w oman can w ithin w eeks
be registered as a Real Estate Salesman, be
working in a Real Estate office making important
decision and advising clients on various
aspects of their investment. There are of
course various coursed and Professional
5
Development Points they need to earn in order
to renew their registration, but these courses
are offered by many institutions and can be
anything from learning how list a property to
how to sell one. Nothing to do w ith Property
Management. The Real Estate Institute of
NSW is a w onderful institution: it offers relevant
courses to property managers on regular
bases given by true professionals and passionate
people w orking in the industry.
2. Tenancy Law s: This is the largest problem area
to property investors in NSW, recently
these tenancy laws w ere updated and
drastically altered the balance of fairness to
the tenant’s favour. Backed up by a Tribunal
system that resembles a Kangaroo Court,
where the law of evidence comes w ell behind
tenants’ 'hard-luck stories. The Tribunal members
sometimes make ridiculous decisions
based in intuition and emotion.
3. Tax Policies: There are good reasons for high
income individuals to invest in residential property;
these tax incentives include: negative
gearing and depreciation allow ances; however,
Capital Gains Tax, although halved in recent
years, it remains an obstacle w hen a decision
is made to sell the property. This tax should be
completely abolished in order to attract good
long-term residential property investors.
Other radical area of change is needed of the State
Taxes is Stamp Duty on purchase. Instead of discounting
or eliminating stamp duty on purchase for
first home buyers, the Sate Government should
consider reducing Stamp Duty to residential property
investors, this will surely attract real investors,
not those that fooling the Government, pretending
they w ill live in the property. In the end it w ill be
good for tenants, most of all, as w hen better informed
and financed professional investors are in
the market place buying residential property, the
supply naturally increases, placing less stress on
tenants and reducing the pressure on rent increases,
especially to young tenants saving to buy their
first home.