Expert Advice by Tyron Hyde
We talk property with Tyron Hyde, CEO of quantity surveying firm, Washington Brown.
Q. 2014 has been an interesting year for property. What do you predict for 2015?
A. I run a nationwide firm, so from where I sit, I think it has been a contrasting year, tough in places, but still providing plenty of bright spots for the smart investor.
What will happen in 2015? I wish I knew. But with the current volatility in the share market property is still my preferred investment. Here’s why:
Reason # 1 – You can Add-value
You can buy a rundown old property and increase its value by getting your hands dirty (or paying someone else to)! It’s hard to add-value to my Commonwealth Bank shares. Sure I bank with them but I don’t think my savings account is going to affect the share price!
Reason # 2 – Limited Supply
Property takes a while to plan and build. The demand and supply equation has lots to do with the price of property. With shares, the company can do a capital raising at any time or issue options, this may dilute your shareholding and its value.
Reason # 3 - Capital Gains Exemption
Unlike any shares I currently own, the home I live in does not attract capital gains tax. This has been lucrative for many Australians and I can't see the law changing in this regard any time soon.
Reason # 4 - Keep it Simple Stupid (KISS)
Property is easier for me to understand in comparison to shares. Granted I work in property, but I know if I buy a property for $500,000, I can get $500 a week rent and comfortably work out other expenses. Share prospectuses and annual reports are usually not as straightforward.
Reason # 5 - Master of my Domain
I’m the CFO of my property investment and answerable to the board directors that I care about, my wife. I don’t know about you, but I’m pretty sick of golden handshakes to CEO’s and directors that pretend they have shareholder value at heart. Really?
Reason # 6 – Don’t remind me
I like property because I’m not reminded of how much I have lost or made every day. I don’t want to wake up and wonder what the NASDAQ did overnight and what my share portfolio might look like at market open.
Reason # 7 – Margin Calls Stink!
Even if my property has gone down in value, which it hasn’t, it's very unlikely a bank will make a “margin call” and force you to sell. Margin calls can be unsettling, as it may force you to either come up with cash quickly or sell stocks at a time when you don’t want to.
Give me property any day!
Tyron Hyde is the CEO of Washington Brown and is considered one of Australia’s leading experts in property tax depreciation. He is also a registered tax agent. Washington Brown manages construction costs worth over $2 billion and completes 10,000 schedules annually. For a depreciation schedule quote CLICK HERE and follow the 3 simple steps or estimate your depreciation cost for Washington Brown’s online calculator CLICK HERE.
Read more Expert Advice articles by Tyron
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.
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