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Whether you are looking at a managed fund for shares or wanting to explore a full range of investment options, such as property, resorts or new business ventures, Australia is rated internationally as a desirable investment destination.
One of the local concerns is that when new immigrants arrive in Australia with more than $500,000 at first they can feel rich. An exaggerated confidence and a fierce independent streak like anywhere can lead to poor investment choices and even loss of capital, rather than a continuation of accumulating wealth.
New to investing or experienced, it is still worth having a general chat to a local financial advisor. When you’re calculating the cost of living and are comfortable with the idea of a move to Australia it’s the good time to sort out the details of your current investments in advance to departure. Will your house be rented or sold? how will this effect your tax bill here and in your country of origin? Will you leave your investment portfolio set up overseas? Will you add Australian investments to what you are already building? Ask questions in advance of your departure/arrival and start a financial plan.
Investing in The Tourism Boom
ImageWhether looking to invest in a principal home, a unit or second property to lease out or a commercial property it is worth looking at smaller locations around the state as well as Surfers Paradise, The Sunshine Coast, Noosa and Byron Bay.
Take Port Douglas as an example of an investors paradise. The original Port for the northern gold fields in Queensland, in 1980 took on a new identity. Once it was a sleepy fishing village surrounded by sugar cane, now is Resort Paradise, has a thriving costal community and is considered Queenslands answer to St Tropez (French Riviera).
This town in the tropical north, started with one resort The Sheraton Mirage Hotel. Now there is a range of accommodation from the deluxe resorts to the very affordable cabins. Having a reputation as a chic and sophisticated well designed and preserved holiday destination it attracts investors as well as tourists and it is easy to see why.
According to the National Visitors Survey, the tropical north has the highest growth in the state for attracting domestic travellers, in the past two years. This is in addition to the 2 million international visitors. Numerous undiscovered tropical locations still sit beside the Daintree rainforests and along the coast of the Great Barrier Reef.
Developers flock to the town and surrounding areas seeking to discover a new site for a new resort or housing estate. Alongside the luxury leisure development sites, farmers are selling up land surrounding their depleting sugar cane crops assisting in giving Port Douglas a property and land boom. From holiday units to family homes, whether to build in known locations or areas on their way up and still yet to peak, there are possibilities and potential to cash in on the tourism boom and residential growth.
Researching an Investment
There are many opportunities to purchase an apartment which is part of a resort complex for you to use as a holiday home yourself and then lease it out the rest of the year. There are many more investment opportunities throughout Australia.
With this there are often detailed contracts and many clauses. For example, some companies will allow you to use your holiday apartment when you choose, others prefer to limit access to out of season. Allowing them to lease in peak times may financially be to your advantage, it may not be what you had in mind. Not all companies will allow you to lease at reduced rates to friends and family and all have their own margins relating to the size of the site and standards and this s reflected in their fees, how they lease your apartment and what they aim to gain for you over a year.
When investing in an apartment in a resort or larger complex (from basic to boutique), there are purchasing package deals. These packages assist the developers in achieving the vision for the resort or complex and you, the investor with the purchasing and getting the unit ready for leasing.
The package deals often include the overseeing the completing of the building as well as providing the co-ordination of the furnishings of the unit. Furnishings are done to a set budget and reflect the desired standard and taste of the resort. The alternative is to take this on board and do it independently. This involves more work on your behalf as you will need to shop and organise the delivery of furniture within a set time frame. It is worth baring in mind even if you do the décor yourself, it has to be done to a set standard and style. Specifications such as: modern and minimalist and paintings must be original ark work only, will be written in the agreement and an example give at the display unit.
Alternatively to purchasing an apartment or unit there is the simple land deal option. What you will need to ascertain amongst many details is whether you will need to build within a set time and if the property has to be built to a set value or not. Many purchase sites have to be built on as part of a development area and carry a style and standard specification.
Getting Help with Your Investments
What you don’t want to do is invest in a shonky deal, where you’re persuaded to pay into a development that doesn’t get completed or was never planned in the first place. It is worth taking on advice when adding to your investment portfolio. Given that you are new to the area, this is a new economy for you and possibly a new style of industry, there is a greater risk to not know the given prices and be taken advantage of.
In addition to the complex contracts relating to investments in various areas, there are strict development guidelines to protect the region’s natural beauty, alongside careful town planning.
To choose between the options and be sure of sound strategies linking up with professional people on side, a team of qualified financial advisors to assess, listen to your objectives and steer you toward them drawing on their local knowledge. Working with an advisor or buyers agent who will read over the contracts and research into the legitimacy of a specific investment deal will give you peace of mind.
New or experienced Investors?
ImageThere are four main asset classes that you can invest in: Property, Shares, Cash, fixed interest or bonds. A diversified portfolio including investments from all asset classes will reduce your risk and smooth out returns over time.
A starting point is to think about what you want to achieve and when you want to achieve it by. Both long and short term goals can be quite simple. A house in the first two years, an investment property or stocks in five to ten years after that. The type of investment mix you choose will depend on your goals, time horizon and risk profile. Much will also depend on your salary here, capital overseas or a lump sum you bring in.
When talking directly to Financial planners it is a good idea to go along with a list of questions. Ask your prospective planner questions about their experience in you area of interest but be open to listen to alternatives. Ask about their qualifications and professional Membership of associations for your peace of mind. Aim to have a rapport with them were you feel you can develop a level of trust and confidence in your financial planner. Ideally you will stay with the same individual for several years.
It is important that your financial planner has experience with clients in circumstances similar to yours. This can mean with your overseas investments. If this is the first time that you now have overseas investments (a house you left behind) and now you have local investments, you’ll need advisors who know about international taxation and social security regulations.
Ask about their fees. This is an on going relationship more than a one off consultation. Do they have an initial flat fee for preparing the financial plan? What ongoing fees will you be charged? Do these fees include GST?
How often will you meet to review your ‘Plan’ and investments to ensure they continue to provide you with the income, growth and financial security you require
The return on investing in Australia? Prime sites on the main street in Port Douglas town were worth 150 000$AU in 1985 and are now being sold at over 2 million $AU. There is still more opportunities yet to come.
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