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GUEST OBSERVATION
No doubt this is one of the toughest federal government budgets we have seen in a long time. It would appear that the Liberal government have been true to their calling and were happy to make sacrifices across the economy in order to balance the books at some point in the future. 
But just how does this budget affect property investors?
Well it’s with relief that no changes have been made to capital gains tax, depreciation or negative gearing. Now, I'm not a fan of negative gearing all that often, the purpose of investing in anything is to achieve good growth and income for the future.
However, I do like the little incentive us property investors are given when it comes to the all to controversial depreciation. Absolutely I'm biased. I benefit from depreciation so I'm not going to argue it shouldn't be in place.
Ultimately, I think it is a great way for the everyday Australian without a business to take advantage of some form of taxation benefit that the big guys get all the time. Currently $6 billion dollars a year is lost in tax revenue due to negative gearing.
However there was one sector in the property industry that got dealt the wooden spoon, and that’s the NRAS scheme. <a href="/expert-insights/finance/is-this-the-end-of-nras-frozen-fifth-round-of-applications">Round 5 of the National Rental Affordability Scheme will be frozen</a> pending a review. In my opinion this is a good move as it was lining the pockets of savvy developers and good property marketers while the everyday investor lined up to buy overpriced property to simply get some money from the government. Now I know there’s a lot more to it than that, however the scheme has been flawed in many ways. 
The property industries push for ASIC regulation of the industry is seemingly unlikely in the near future as large budget cuts to the ASIC budget are handed down forcing large scale job cuts within the organisation. It doesn't look promising that the team at ASIC will want to take on more work with less staff and money. 
Home owners or investors are generally a pretty small deal when it comes to federal budgets. It’s often the state budgets that can make big differences including stamp duty concessions and rates plus the ever tinkering of first home buyers grants. 
Outside of investing, first home buyers taking advantage of the Labor government's First Home Savers Account (FHSA) <a href="/expert-insights/investing/first-home-saver-accounts-scrapped-what-now">will no longer be able to get tax breaks and co-contributions</a> as the scheme will be closed starting 1 July.
I think if anything, this budget should send a reminder to Australians of why investing in assets (not just property) is a necessity to gain financial freedom and retirement when you want it. With the pension age pushed out even further, serious holes in the future funding for pensioners, its clear we need to invest.
JOSH ATHERTON is managing director of <a href="https://www.linkedin.com/profile/view?id=123928559&amp;locale=en_US&amp;trk=tyah" target="_blank">Portfolio Property Investments</a>.
You can connect with Josh on <a href="https://www.linkedin.com/profile/view?id=123928559&amp;locale=en_US&amp;trk=tyah" target="_blank">LinkedIn</a>.
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jatherton-AZUXX8vQA7

How does the budget affect property investors?

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Just this week a property investor contacted me, she wished to discuss our buyers agency service arm of our business. The conversation started with this statement: "I just want someone to tell me where to buy, can you do that."
I had not met this investor before, nor had they had anything to do with our financial planning services. So, initially I went to take the client back a few steps and obtain some more information before I had to tell her, unfortunately, I cannot tell you exactly where to buy with a simple phone call.
If you would like to know where I am personally buying I can give you that; however, none of us have any idea at this point if what I buy, or where I buy, is at all appropriate for you or your strategy.
The client pushed even further and mentioned some competitors who have told her where to buy and was frustrated I too could not give her my opinion. Chances are she was going to make a very large financial decision based on the opinion of the best salesman she talks too.
You see, I rate my sales skills, but there are certainly better salespeople in the industry. I guess this particular client will follow the person that instils the most confidence into her situation.
For too long we have been hearing about unlicenced people providing advice to investors. I get that many people put on the shiny suit and hit the road to convince people that the opportunities they present are the best the market has seen for years, but lets be honest, this is the minority of property buyers that accumulate property this way. Whilst I’m not for it, you have to take a moment to understand why sellers would choose this path to make commissions; there are far too many investors that will trust anyone and make financial decisions from a vulnerable and uneducated position.
I would like to see consumers smarten up a bit, which could change a few aspects of the industry. Financial advice has been strictly governed for years. However, we all too often see businesses take advantage of consumers in many ways; including unrequired insurances, excessive hidden trails on products, SMSFs when they are not suitable for the client, and the list goes on.  
We put too much trust in other people too easily when it comes to investing. Financial literacy is not taught in our educational system and we often rely on anyone that can make us feel good when investing. Thus, it is often the greatest salesman that wins, not the greatest product or service.
The industry plays on fear when people are investing, it's human nature. When we're fighting for our financial future we don’t want to miss out. Our emotions are running wild at this point.
If anyone wants to take investment advice from a real estate agent, I say go for it. It would appear that there might only be one way for that person to become smart at their investing and that’s by learning the hard way. If a silly person is going to ask for advice from someone who isn’t even clearly qualified to give it, they’re going to get the answer they deserve, full of nonsense.
Josh Atherton is managing director of <a href="https://www.linkedin.com/profile/view?id=123928559&amp;locale=en_US&amp;trk=tyah" target="_blank">Portfolio Property Investments</a>.
You can connect with Josh on <a href="https://www.linkedin.com/profile/view?id=123928559&amp;locale=en_US&amp;trk=tyah" target="_blank">LinkedIn</a>.
          
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Josh Atherton

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