It seems the Xmas cheer extended well into Jan this year, with retailers enjoying the extended festive season as purchasers cut loose.

Info latterly released made public shoppers parted with a record $18.6 billion in January. That sure is a statistic high enough to raise the eyebrows of each economic gurus around the country since it was well above expectations.

It shows that three interest rate rises are no match for the juggernaut of a posse of ecstatic spenders. Yet with much of the spending no doubt on cards, and for things that depreciate rather than appreciate, maybe it will take another hit or two from the IR stick before we’ll change our behavior.

Last week things looked better for speculators on the back of higher rental reports and lower vacancies. This week it is ratification of the trend of rates heading upwards.

While property could be a awfully lucrative and successful investment, it is not completely safe. It is becoming increasingly well-liked nowadays, especially after the recession and stock exchange investing still being relatively dodgy. Creating a successful property investment portfolio will always require a good understanding of the property investment, the location, and the current economic climate, so you should always find out as much as you can before purchasing a property.

With so much confusion, ensure you have a plan that seems sensible. I suggest you crutch your numbers with rates (at least) half a percent higher than they are now to find out how great the deal looks if the lending environment changes for the worse.

On another note, well done to those who scheduled a seat for the approaching Martin Ayles bus trip and bootcamp. I'll be seeing you in Adelaide in a couple of weeks for what is bound to be an enlightening and pleasurable event.

Ultimately - congratulations to my beautiful wife who enjoyed a birthday last week!

Accordingly to our traditional anthem, Australia is a nation that is graced with ‘golden soil’.

I do not believe our farmers agree at present though, as drought has stricken much of the land. Property speculators possibly are not seeing many golden real-estate returns for the time being either.

Up to date press articles quote leading financial consultants - the likes of Bill Evans. Mr. Evans is the ANZ Bank’s chief economic expert. In a lecture to the Australian Property Institute, he summarised info about the Queensland home market “very, very depressing”, and was doubtless alarmist with his thoughts on the booming WA market commending that a day of reckoning was coming.

Against this, other press articles suggest that buyer positivism is carefully returning to the homes market now that houses are way more affordable.

What shall we do and who shall we listen to?

Well, if we take basics, higher resource costs justify higher property prices to a level (in the west). Nonetheless after a bit the investors take over and the market becomes a frenzy. At this time great profits can be made with little effort and everything appears easy.

But as the eastern states know, all parties eventually end, explaining why it is important that you manage your debt and avoid being too geared and laden with negative cashflow.

For those investing in the east… Be patient and search for the good deals that exist. Be careful about purchasing for long-term buy and hold as the market may trend down further before it rebounds.

Do not forget that investing is always about handling your money to the best of your capability. Now is not the time to be passive, or to wish that everything will be fine by itself.

To borrow a phrase from the PM, the easiest way to describe the prevailing property market is to “be alert although not alarmed. “.

Smart property investment selections involve a forward-thinking methodology that account for a variety of industrial factors.

Projected supply and demand, industry prospects and commercial growth all influence the amount of success and potential returns of your investment choice.

A different aspect that's fast-becoming more important as we get more deeply into the 21st century is supportability.

Earth Hour is coming up this weekend (March 31) and it serves as a prompt that it is actually possible to make a contribution to the energy-saving effort by selecting green secrets in your investment projects.

Whether you choose to speculate in real estate that has existing eco friendly features over a property that doesn't - with all the other factors being equal - or you go for environmentally friendly technologies when you reconstruct your property, there is usually an opportunity to contribute.

And the better part is, these energy-saving methods frequently save you money in the end.

Starting on refurbishment projects like adding insulation, replacing windows and installing water-smart plumbing systems will likely pay themselves off quickly in the guise of lower monthly water and electricity charges.

Most major towns in Australia have made a commitment to supportable development and certain states even offer grants to encourage more people and firms to participate.

For example New South Wales for example established a $700 million Global Warming Fund in July 2007 to put toward energy-saving technologies in businesses, households, colleges, communities and administration.

A portion of $170 million is allotted to NSW Home Saver Repayments, which provide repayments for hot water systems, hot water circulators, rainwater tanks and twin flush toilets. The governing body alerts the public to when funds become available for application.

As thousands of towns across the world join together to turn off their lights for one hour this Saturday beginning at 20:30, Australian stockholders may need to think about how they can do their part in saving energy.

A fortnight ago, while enjoying a summer bbq, a pair sought my opinion about a property exchange they were considering.

In essence, they wished to make better use of a negatively geared block of land they had acquired with the view to potentially building on it.

After asking some light leading questions, it became clear that the home they lived in now was purchased on a rather flimsy basis. That is, they bought it at auction after one 20 minute property inspection and now, with two property money flow crocodiles to feed, and two children to dress, and on one income, it was becoming more difficult.

This side of the property investment is being debated first as it is the most important criteria. It is important that you're employed with right bunch of execs who will help you prepare the optimum mix of finances.

The first point I made was to show how the ‘easy come, simple go ‘ approach to investing often loses cash. Indeed, their home was bought three years back and had not increased in price since. Factoring in interest, possession and exchange costs, they have bled money.

In working through the chances, it looked the best choice might be to sell the prevailing home at a complete loss and build a new home on the land - possibily a duplex where one may be sold foe profit (to pay off the loan) and the other kept as the new home.

The conversation then went around in circles as the man and other half debated what they could do. In the final analysis they concluded that this was all a bit too hard so it might be better to do nothing.

Shrugging my shoulders, I wished them all the best and went to follow up some more salad. As I walked away I could not help thinking ‘nothing is the only path that leads to nowhere. ‘.

You could have just completed the regularly complicated and time-intensive process of buying a property investment, but do not celebrate yet!

Besides the job of making your real estate ready to live in, you have to begin your search for the ideal tenant - and smart financiers know that there is far more to selling than merely putting out an advert online.

Introducing a place or a unit that people can picture themselves living in for a specific period of time sometimes requires a little creativeness - especially if you're asking for a premium.

2 options for this particular approach include home staging and in some measure or absolutely furnishing the property.

Home staging

Presenting your property in the most attractive way needs careful thought and maybe even pro help.

There are many firms in Australia that offer their home staging services and will help you determine how to make room and produce the best layout.

Decorating your space may require you to hire key pieces of furniture and accessories to set the scene. Furniture, pillows, lamps, curtains and bed dressing all go a good distance towards creating a picture.

Flowers, plants and candles will add the final touches and create a friendly and snug atmosphere.

Furnishing

While it will cost more to furnish your property and you will probably attract shorter-term tenants, there are benefits to this approach.

You may be able to ask a higher rent for a furnished instead of unfurnished place just because of convenience and supply and demand.

Those that seek furnished places are typically not staying long enough to make the acquisition of furniture and such worth the cost and would thus always choose a furnished place first.

Additionally, the infrequently pricey damage of moving bulky items out of and into the house would be evaded altogether.

There are benefits to both strategies, so it would be a smart idea to weigh a list of benefits and disadvantages to determine the best method for you.

Property backers attempting to decide where to commit their resources in Australia might be intrigued for Northern Territory property investment.

A world survey of mining corporations released yesterday (Feb 28) ranked the state as the top jurisdiction in Australia for mining exploration and development.

The survey collected responses from over 800 companies about the exploration attractiveness of 93 worldwide areas.

Placing 11th on the Canadian-based Fraser Institute survey, the state scored 81.5 out of 100 on the index - the result of a pro-active approach to the industry, according to minister for resources Kon Vatskalis.

He said: “We are leading the country when it comes to captivating world investment and this result provides further proof of the successfulness of our Bringing Forward Discovery initiative.”

The statement comes on the heels of a large collection of publications regarding the inspiring commercial environment of the Northerly Territory.

Health, education and sub-structure have all received local government funding in support of - and preparation for - a burgeoning economy.

Giant projects continue to roll right in including the lucrative Ichthys LNG Project and the Sea Supply Base.

Additionally, state treasurer Delia Lawrie lately boasted the second lowest jobless rate in Australia, at 4.2 %.

Ms Lawrie, who is also minister for trade and minister for Asian relations, also said favorable links to the growing Philippines economy.

She said: “In this, the Asian century, the Territory stands placed to reap the benefits of our important position, business-friendly economy and resource wealth.”

The assorted departments seem to be putting in the work needed to benefit from the mining opportunities - it could be a great time to go into the market.

Mr Vatskalis appears assured in the future , stating: “The Territory govt has a commitment to working with industry, stakeholders and world stockholders to ensure the on-going success of our resource sectors. “.

A cut to the cash rate tomorrow may be followed by 2 further reductions in the initial half of 2012, according to economists at HSBC.

The bank’s global research publication, The RBA Observer, forecasts that the cash rate will be cut by 25 basis points when the Reserve Bank of Australia’s monetary policy board meets tomorrow (Feb 7) for the 1st time since the start of the year.

Slow worldwide expansion and lingering unease about the financial and economical position in Europe together with the easing labour market, set an ideal stage for a cut tomorrow that's in accordance with the 2 reductions manufactured by the panel in November and December last year.

Another 2 cuts to the cash rate are predicted to be made in the 1st half of 2012, HSBC forecasts.

New housing activity will be boosted by a slashed cash rate, according to the Housing Industry Association’s chief economic expert Harley Dale.

However , the full results of any cuts may simply be felt if they're passed on by the banks in full.

Rate cuts also must be supported by govt measures, Dr Dale declared, which should also provide stimulus to new home building.

This statement was also echoed by Peter Jones, chief financial consultant at Master Builders Australia, who called for lower interest rates in a move to raise confidence in the property market.

Speaking last Thursday (Feb 2), Jones said: “With the challenge to restore confidence and drive a personal sector recovery, the building industry is banking on further rate cuts to help raise confidence and stabilise a doubtful market.”

“Master Builders Australia believes the Nov and December rate cuts by themselves won?t be enough and calls on the Reserve Bank to lower rates the week after next to re-light activity in the building industry. “.

Every investor wants to acquire property at a low price and then lease or sell at a higher value.

The level of profit is related to what the unit has to offer vs its future potential.

What this implies is that when you're hunting for real estate, you shouldn't only look at what is there, but also visualise what there may be in days to come.

Would it be possible to remodel the loo for a reasonable price? Could you replace the carpet with hardwood flooring? Is there room for a washer/dryer?

Modern touches permit you to expand your tenant market and charge a higher price.

What starts out as a mediocre piece of property could be completely redone in 3 to six months - seriously climbing in value.

If renovations and upgrades are not in your experience, perhaps you might enlist a friend’s help in discovering methods to open a room, let in more light or expand kitchen space.

Researching figures will help you determine which refurbishments will be of benefit to you in the end and which will not pay off.

If you want to implement some changes, but do not have the budget to carry them out, there are many low-cost systems that will make a big impact.

A fresh coat of paint, as an example, adds a touch of lightness with very little effort and cost.

Replacing doorhandles, window trimmings and light fittings can also add modern appeal without cosingt a fortune.

The main thing is to be realistic about what you can accomplish and don't begin before you have made an in depth plan and budget for what you intend to attain.

While there is regularly potential in buildings that might use an upgrade, sometimes there is just no likelihood of making a good return on your property investment.

The 1 question I am being asked at the moment is: ‘how do I turn around an under performing property ‘? Here’s my answer…

There are 2 reasons that explain why folks go for property investment: to save tax, and to earn income. Many desire both, but as you must select one over theother, I recommend choosing ‘making money’.

This simple declaration is essential, because an under performing property meets the objective of ’saving tax ‘ since the loss can doubtless be used to cut back your income tax, whereas a profit will increase it.

Right then, having made the decision to make money, the following question is ‘how ‘?

An approach that might help is to look at your properties like staff working for you. If they are under performing then the 1st step is to talk to them about what is going wrong, then you'll offer re-training or maybe ‘re-structure ‘ their workplace environment. Eventually though, if you can’t get the required results, you must let them go.

The same approach works alongside property: begin by trying to ‘fixing the difficulty ‘, and if that does not work, you may have to ‘fire the problem’.

‘Fixing The Issue ‘

When it comes to ‘fixing the issue ‘, you want to spot the effect (what is going wrong?), and then identify the cause (why is this happening?).

For instance, if your property is under performing because it’s vacant and not bringing in any revenue, then the cause is simple: you don't have a tenant. The fix is to discover a renter by working out who (or what) best suits the property, what rent works for them, and then go find ‘em. Go door to door if you have to.

Here’s another example: If your property is not recording capital expansion (effect), then it could be it is not ‘wanted ‘ by the market (cause). The fix? Make it more desirable.

Is it really so simple? I disagree ‘yes ‘, but because there is ‘pain ‘ connected with handling the issue, the disposition is to put off taking positive action and this always makes things progressively worse.

Occasionally we look to others to solve the problem for us. My experience is that this seldom works. You got yourself into the mess, and you need to get yourself out of it, so roll up your sleeves and get to it!

‘Firing The Difficulty ‘

If you can't or don’t want to sort the problem, then the sole alternative (aside from denial) is to ‘fire it’. No, not literally setting fire to it, but instead deciding to sell and re-deploy your funds in more profit-making assets.

This sounds simple, but it's not. Psychologically, it is tough to confess that you have stuffed up, and it’s more common for folks to overlook the issue and hope that ‘time and trend ‘ will fix the mess.

‘What To Do? ‘

Here is what I’d do:

1. Do something. Wonderful stupidity isn't a solution if you continue to leak cash.

2. Revisit your method. What were you attempting to do, and why, when you bought the property?

3. Thinking about your strategy, work out ‘what went wrong ‘ so that you can avoid making the same gaffe in times to come. Figure out what, in a perfect world, would need to happen for your property to be back ‘in the cash ‘ and link that result to controllable and actionable tasks you (or your team) can perform.

4. Look over that list and decide what is the biggest impact item that is easiest to implement, and get to work.

1. Be clear on how much return you need to make the property positive!

The very first thing you need to outline is, what kind of return you've got to make a cash-flow positive property. This will depend on your revenue, your tax position, and your level of comfort with debt, but after you know, you can glance at the best finance for it and whether the likely rent will be sufficient.

2. Using debt to fund a positive money flow property

If debt is something you are comfy with, and can manage well, you may think about using equity to fund the short-fall in high expansion potential properties. Make sure you understand the benefits and disadvantages of this type of methodology well, before you choose this option. You may also use equity in funding the property. Be aware that most investors that fail have simply pushed themselves too near to the edge, and any changes in interest rates or lease - have them against the wall. Talk with a mortgage broker and good tax accountant to establish your best position.

3. Do your studies - for instance RP Information, investment mags etc

Between RP Data and investment mags you will have access to stats showing average rental returns, property values and sales history for most areas. If you find the highest average? On rental return and then research properties in that general location or simply outside of it, then you have at least a good place to begin to work from.

4. Do your analysis on-line first

The ability to find suitable properties online, in your own back garden and around the globe, are impressive. You have the capability to shop and research 24/7, which can allow access to a bunch of prospects. Doing your research for explicit property types, prices, locations, and fashions of housing this way, means very efficient usage of your time. Using alerts can provide access to new listings in your search factors delivered right to your inbox. Consider hunting for lower worth properties (regularly the best returns), blocks of units as well as motels, hostels, boarding houses and profitable student accommodation.

5. Check out a properties without leaving home (Google earth)

This is a superb free program which helps you survey an area using satellite technology. It’s superb for taking a look at properties which are not in your rear yard. It's possible to get a fair idea of the layout of the area and take a look at the properties you've found online.

6. Talk to as many local agents as feasible

Chatting to a considerable number of estate agents in an area can offer you an overall picture of the area, help you in understanding the expansion potentials associated with the local economy and what areas possibly to avoid. Nonetheless often the areas they tell you to avoid can still be good to make an investment in. This is done absolutely remotely by phone and e-mail. Many agents are fast to reply to emails, but a preliminary telefone call can be quite effective too. Sometimes it is more beneficial to have face-to-face conversations if you're close by, giving you a better basis to substantiate a great rapport with the agent. Remember, agents want to make sales, so as a potential investor, they are probably going to keep you posted on any appropriate properties on the market or that are coming up.

7. Get the low-down on the local rental market (property managers)

If you're looking to take a position in an area, speak to property managers, as they typically know the rental market better than the sales folks and have a great idea on rental demand and returns. They know where the renter demand is, what they are likely to pay for categorical style and positioning of housing.

8. Employment, transport, shopping and faculties

As a backer, look closely at existing employment centres like factories, shopping centers as well as quick access to public transport. Where there's work, there are folk. It is worth finding out about any sub-structure works in planning as this could make properties more tasty for renters and re-sale later. Additionally , look at shopping centres and faculties in walking distance to the property, which can generally make it more engaging for families and ensures better rentability.

9. Always start your offers low?

When you have found a potential property that has got a higher than normal return or potential for expansion, calculate what price you might pay to have it work for you then make your initial offer low. It could seem like a very low offer, but what do you risk? Remember it is a buyer's market and a rejection is an opening for further negotiation.

If a property has been for sale for. Some time, the vendor could be particularly incentivized to sell even at a better price. Investing is all about numbers the more offers you make, eventually you'll be successful in buying a property at a price that adds up.

10. Look for properties that are dissimilar or weird

Consider unusual properties where you can most likely get a better than even yield. For example:

Look at old Queenslanders or other properties that may be renovated; the possibilities of turning a block into 2 lots; or a simple creation of space eg. Separate living areas. Consider granny residences as a potential for double tenancies. In NSW there are new laws that allow for multiple rental properties on one title in order to meet the growing rental demand and the ever present housing shortage. Consider an old Motel that might be able to be remodeled to provide individual permanent rental for scholars. This will work especially well near training hospices and universities. Be creative, some properties may have a back-lane access holding opportunity to hire out sheds for storage to trades folk or to accommodate boats and RVs.