A small property could potentially make a great investment, provided you choose the right one. The key to success with any investment property is thorough research. In this article, we take a look at how to research and choose the right small space property to give you the investment returns you’re looking for.
Pros – why choose a small space apartment or unit?

There are lots of benefits to buying a smaller property such as an apartment or a unit. Houses often have a higher entry price point due to land value, so you could potentially buy an apartment or unit with a smaller deposit. Ongoing costs for apartments and units can be a lot less too – council rates are usually higher on a house and in many states, you’re also required to pay land tax on an ongoing basis. With a unit or apartment, costs are limited to strata and body corporate fees.

Maintenance is also a cost that must be taken into consideration. If you purchase a house, all maintenance issues are your responsibility, whereas with an apartment or unit, many of these costs are covered by the body corporate.

These factors mean that a unit or apartment may be more favourable from a cash flow perspective – which is great, particularly for first time investors. Additionally, if you do your research carefully, you could potentially locate an apartment or unit in a location set to make both great capital gains and solid rental returns.

Cons – how small is too small?

Some developments offer studio and one-bedroom apartments of less than 50sqm. Many lenders are reluctant to finance these properties, and also some small space properties in high rise, high density developments, so it pays to discuss any property you may be considering with your mortgage broker before you sign a contract or put down your deposit.

Research is the key to success.

So how do you know for sure that a location will be in high demand for small space renters in the long term? Small space apartments and units are often in high demand in locations that are close to the action for singles! These may include the city centre and other busy employment hubs, universities, areas with vibrant nightlife, or excellent public transport facilities that provide fast and easy access to these amenities.

To find out what you need to know about a particular location, start by talking with local real estate agents and property managers. Essentially, you’ll want to find the answers to these questions about your chosen location:

  • How is the local economy doing? Is there employment growth?
  • What is happening that will affect supply and demand of small space property in the area in future? Are there many new developments in the pipeline?
  • What is the historical growth of property prices in the area?
  • What are the current rental yields on properties similar to the one you are considering?
  • What is the median price of properties in the area?

We can also provide you with a comprehensive report on any location or suburb of interest. We have access to specialised data from Australia’s leading property market data supplier, CoreLogic that specifically targets small space apartments and units.

How to analyse the market data.

You’ll want to analyse the data you collect to find a location with positive capital growth and solid rental yields to maximise the profit potential of your investment. (If you need help, please ask us as we have a great deal of experience!) Some other good indicators of these include:

  • Days on the market. How quickly do properties sell in the area?
  • Vacancy rate/demand to supply ratio. Is there much competition amongst renters?
  • Rental yield. What percentage of the price of the property can you collect in rent?
  • Auction clearance rates. Do sellers need to reduce the price to get a sale?
  • Limited available property. This could suggest that demand exceeds supply and this is likely to drive future capital growth.

Ask us to help you crunch the numbers!

There are always reasons for and against investing in any type of investment property. The right investment choice for you will depend on your financial position and investment strategy. If you’re considering in investing in property for the first time, a small unit or apartment could be a good way to start, so talk to us and we’ll help you crunch the numbers to see if they add up!

Remember, a good mortgage broker can be an invaluable resource when investing in property. We’ll help you choose the right loan that will not only serve your needs now, but set you up for further investments in the future. Talk with us at Element Finance Joondalup and Fremantle – we’d love to help you get started with a little property investment today!

It’s hard to believe it’s already Easter, but by now you would have noticed all the chocolate eggs appearing around the supermarket. Easter is a special time for families, and in this article, we share some great ideas for your celebrations this year! Remember, if you have any plans to purchase a new property during the busy Autumn property purchasing season, we’re here to help with all your home loan needs!

Dye your own eggs

Dyeing and decorating eggs is a great way to get into the spirit of Easter, particularly if you have children. It’s super easy and fun! Simply boil up some eggs then make the colouring. Mix 1 teaspoon of vinegar and 20 drops of food colouring in 1 cup of hot water. For different colouring effects, leave the eggs submerged for different amounts of time. Get creative with glitter, stickers and multiple colours, and let the good times roll!

Easter egg hunt

Easter egg hunts conjure up fond childhood memories for many of us, so why not celebrate this year with an egg hunt in your backyard? You could even go all out and make it a clue-based Easter egg hunt if your players are a little older. If you’re looking for an egg hunt on a bigger scale, check out your local entertainment guides or newspapers. There may be community events such as this Easter egg hunt and family picnic in Melbourne.

Easter brunch for the adults

Another idea is to host a lavish Easter brunch and invite your nearest and dearest. There are plenty of great Easter recipes online, for example, this lamb recipe with caramelised onion and carrots sounds divine. If you’re looking for a dessert to ‘wow’ your guests, try making this hot cross bun and rhubarb cheesecake. It’s positively decadent!

Volunteer

Taking part in a feel-good activity like volunteering is be a wonderful way to celebrate Easter. You could help in a soup kitchen or lend a hand at your local opportunity shop. Retirement villages often need volunteers to chat to the elderly and keep them company. For inspiration, check out the volunteer opportunities on GoVolunteer. There are heaps of options, from becoming a volunteer tutor to refugee high school students to doing some light gardening in an aged care facility. You may even be able to find a volunteer activity for the whole family!

Real story of Easter

If Easter has religious significance for you, you may like to share the story of Easter with the kids. You could curl up on the couch as a family and watch biblical moves, or check whether your local church has any special Easter services or displays.

Host an Easter hat parade

New clothes, or a new hat at Easter is an ancient tradition, but these days it’s the realm of little kids who love getting crafty and dressing up. Celebrate both tradition old and new, by hosting an Easter hat parade! Invite all your kids’ friends to put their creative thinking caps on and bring their Easter hats to the party. Prizes for originality are a must.

Bake an Easter bunny cake

If you love seeing the ubiquitous Easter bunny at this time of year, why not bring him into your home as well? You could bake an Easter bunny cake and enlist the help of your kids. If cooking isn’t your strong point, here’s a great recipe for an Easter bunny cake, complete with a how-to video.

Make Easter basket gifts

Making an Easter basket is another fun activity to do with the kids. Why not move away from traditional baskets and go for a non-conventional design? You could use a glass jar and turn it into a terrarium filled with Easter eggs and decorations. Alternatively, transform an old watering can into an eye-catching Easter “basket” by getting creative with some ribbon. Check out this slide show for inspiration.

Make Easter cards

Put the kids to work making Easter cards for family and friends. It’ll keep them busy and the recipients will love receiving a handmade gift from a child in the mail. Cut up last year’s cards or collect Easter-themed cut-outs from junk mail advertisements. Discount stores usually stock a treasure trove of creative bits and pieces for this kind of activity.

Have a toy exchange

Recycle and spoil the kids at the same time by hosting a toy exchange or swap party! Go through your little one’s belongings and purge any unwanted items (you may have to do this when they’re not around). Invite other mums to do the same. You could make it fun by giving the kids “tokens” to redeem for new toys. Anything that’s left over at the end could go to your local charity shop.

We hope you find these Easter celebration ideas handy! We’d like to wish you and your family all the best for the Easter Holidays. Remember to give your Element Finance mortgage broker in Joondalup and Fremantle a call if you need support for your Autumn property purchasing plans, once the break is over. We’d love to hear from you.

Did you know that your mortgage broker can help you with a lot more than a home loan? Mortgage brokers are qualified as ‘credit advisors’, so we can be of great benefit to you in a variety of different ways when it comes to your finances. To start you thinking about maximising your financial goals this year, here’s 6 questions you might like to ask us in 2018!
1. How can I clear my debts faster?

According to the Australian Bureau of Statistics, about 29% of Australian households are classified as ‘over-indebted’. The most common form of debt is credit card debt, which is currently a real bother to about 55% of us!

If you want to clear your debts faster, particularly credit card debts, the trick is finding ways to save on interest, so your money goes towards paying down your debt rather than maintaining it. This could mean rolling all your debts into one loan with a lower interest rate. We could help you do this with a personal loan, or perhaps by refinancing your home loan to pay off your debts. Call us if you want to talk turkey on debt consolidation!

2. What’s the best way to save for my child’s education?

Dreaming of your child becoming a Nobel Prize winner one day? Then a great education is key. Paying for something like a four year university degree twenty years from now is not so much a question of saving your extra pennies, but putting your money to work for you so it generates money for the future. Ideas? Use your home as a money tree – put any extra money you’ve got into your home loan now, then access the equity to invest as soon as you can. Or if you already have plenty of equity, talk to us about refinancing now to get a deposit for an investment property or some other form of investment.

3. How can I take a year off work to travel when I’ve got a mortgage?

Ah-ha! A tricky one, but talk with us because there are a number of things we could do to help, depending on your personal financial situation and how much equity you have in your home. For example, we could crunch the numbers for you to see if renting out your property would cover your repayments while you’re away. Or to make that strategy work for you, potentially negotiate with your lender so you could switch to interest-only for a while to reduce the size of your loan repayments. We may even be able to refinance your loan to help you cover some of your travel costs, and at the same time, extend your loan period to reduce your repayments so a renter could cover them.

4. My car loan repayments are a killer! What can I do about it?

Refinancing your car loan is not out of the question. If you got your car loan from a car dealership, chances are you’re paying a whopping interest rate – we recently heard of a client who was paying as much as 14.5% pa. If this is the case for you, we could potentially find you a loan with a lower interest rate, or extend your loan terms to reduce your repayments. It may even be possible to roll your car loan into your home loan. Talk to us and we’ll see what options are available for you, or if you want to purchase a car this year – we are here to help set you up for success.

5. I’ve always wanted a jet-ski. Is it possible to get a loan for that?

Yes! Even though we usually specialise in home loans, we can also access great loan options for other large purchases. We call these ‘lifestyle assets’ – which covers everything from jet-skis and boats, to other items you may need like cars, caravans, campervans and even horse trailers! Give us a call – you’ll be surprised how quickly we can get it organised.

6. I work for myself. Would I still be able to get a loan?

If you are self-employed, there is no reason why you can’t get a home loan if you have a steady income. We can also help you with finance for commercial vehicles, equipment you may need for your business, or insurance to cover your business and personal needs. Why not talk to us now? The right way forward for you depends on your current personal financial situation and future goals.

Got a twisty one? Go ahead and ask us!

We’re always available to help you with managing your finances and credit facilities. We at Element Finance Joondalup and Fremantle are very much looking forward to helping you get ahead in 2018, so if you have a question, please give us a call. We’re happy to help.

Wish you could take longer holidays and spend more of the summer in the great outdoors? Caravanning is a great way to make the most of your holiday budget and is increasing in popularity. Last year, we Australians made more than 11 million trips and spent more than 51 million nights in our caravans and campervans! If you’ve just bought a caravan, or you’re in the market for one, here are some great tips to make the most of your trips!
1. Plan ahead.

One of the biggest mistakes first-timers make is not booking a site in advance in the camping hot spots. The most popular locations can be booked out months ahead, so secure your site in each place you want to visit before you set off. If you’re on a budget, there are a number of free camping sites around Australia – check them out at www.freecampingaustralia.com.au

2. Allow enough time to get there in daylight.

Towing a caravan takes practice. You have to reduce your speed, allow for the wind factor and avoid creating a traffic jam that goes on for miles. It pays to start early to avoid heavy traffic and so you can arrive at your destination and set up whilst it is still light.

3. Practice reversing.

Reversing the caravan is a difficult skill to master so we recommend you practice at home. It helps if you have a partner to give you directions – walkie talkies can be a big help and will save you yelling and attracting an audience.

4. Get caravan insurance.

When you’re towing your own accommodation, it pays to get an insurance policy. Check out insurance that covers you for loss or damage anywhere in Australia due to accidents, storms, impact, vandalism, fire and theft. It’s also a good idea to ensure it covers your caravan contents.

5. Don’t leave the Esky outside.

Don’t make this newbie mistake! The interior space in a caravan is limited, so when bedtime rolls around, you might be tempted to put the Esky outside the door. This attracts the local wildlife and in the morning, there is no food left or your campsite is destroyed. If there is no room for you and all of your foodstuffs inside the van, put them in the car at night.

6. Laundry facilities may be limited.

There will come a time when you have to do some washing. Most good caravan parks provide laundry facilities, but it’s Murphy’s Law that everyone will want to use them at the same time. Consider doing your laundry at night. Remember to bring your own pegs.

7. Don’t rely on the kids for company.

Caravan parks offer great amenities for the kids. You can usually let them do their own thing without worry, but you’ll probably only see them when they’re hungry. Bring a good book.

8. Plan your meals.

If you’re going somewhere off the beaten track, there may be no local shop if you run out of essentials. Always bring plenty of fresh drinking water – the local water may not be drinkable.

9. Don’t depend on a campfire.

Don’t count on using a campfire to cook with. In many locations, campfires are prohibited or there may be fire bans. If it rains, you may not be able to light a fire. If your van doesn’t have cooking facilities, bring a BBQ.

10. Bring a first-aid kit.

It should include band-aids, bandages, antiseptic, sterile wipes, sunburn ointment, insect repellent, insect sting lotion, and burn cream. You should also include tweezers, scissors, safety pins and a knife.

In the market for a new caravan?

This is a great time of year to buy a new caravan. And if you need finance, talk to us! We can help you with a suitable loan for all kinds of large purchases – not just home loans. There’s still plenty of time to take advantage of the great summer weather and you’ll be surprised how quickly we can get a loan organised for you. Give us a call at Element Finance Joondalup and Fremantle!

If you’re buying a property or considering refinancing your home loan in 2018, you may be asking yourself whether to fix your interest rate or not. Many people think about switching to a fixed interest rate mortgage when interest rates are low, in the belief that it will insulate them from future interest rate rises. In some instances, this approach could prove worthwhile, but not always and perhaps not for your situation. In this article, we explore the pros and cons of fixed, variable and split rate home loans to help you make an informed decision in 2018. If you’d like to explore your home loan options, please get in touch.

Are interest rates at their lowest and will they go up?

The official cash rate, as set by the Reserve Bank of Australia (RBA), is what traditionally determines the base rate lenders use to set their home or investment loan interest rates. It has been at an historic low of 1.5 per cent since August 2016 and many experts are predicting it to remain steady throughout 2018. Tim Lawless, the head of research at property data analytics group CoreLogic, said the RBA would likely keep interest rates on hold during 2018, with an interest rate drop unlikely.

At this point, it would seem interest rates are indeed at their lowest. So, does this mean a fixed rate product would be a better option than a variable home loan? It could be, but not necessarily!

Pros and cons of fixed interest rates

With a fixed rate home loan, you can lock your interest rate in for a set period (usually 1 to 5 years). The advantages are that you can anticipate exactly what your repayments will be, and budget accordingly. Refinancing to a fixed rate mortgage may also be worthwhile if you are on a tight budget and need certainty about the cost of your repayments. You may pay a bit more in interest in the long run, but it could be worth it for the peace of mind.

The disadvantages of fixing your home loan? Fixed rate loans usually, but not always, have a higher interest rate and cost more than variable rate home loans. So, unless interest rates go up beyond what you’re paying at your fixed rate during your fixed period, you won’t make any savings compared to a variable rate loan. If there are interest rate drops, you won’t get the additional savings as you would if you had a variable rate loan.

There may also be limitations on making extra repayments on a fixed rate loan. In some instances, you may still be able to make extra repayments to pay the loan down quicker, but they may be capped at a low amount or there could be fees involved. Sometimes, redraw facilities may not be permitted on fixed rate loans, and there could be break fees if you refinance or pay off the loan within the fixed rate period.

Pros and cons of variable interest rates

Variable rate home loans usually have slightly lower interest rates than fixed rate home loans (but again, not always – it pays to ask us to shop around). If interest rates fall, your rate will usually fall too, as they tend to move with changes to market interest rates. Often, you can make extra repayments with variable rate home loans, allowing you to pay down your mortgage faster and potentially save money on interest. You can also access a range of handy features with variable loans, such as offset accounts or redraw facilities.

The disadvantage of variable rate home loans is that if interest rates rise, yours will too – but as Tim Lawless from CoreLogic says, that’s unlikely to happen in 2018. Budgeting can also be trickier, as your repayments will fluctuate if interest rates do change.

Another option – split your home loan

If you want to hedge your bets, you could consider a split rate mortgage. This is where you fix part of the home loan, while the rest is variable. In this way, you can mitigate some of the risks of interest rate rises while benefiting from useful features and extra repayment options. If you’d like to know more, talk to us and we’ll explain whether a split mortgage could be beneficial to you.

Call us before you decide

“Should I switch to a fixed rate home loan?” is one of the most common questions we receive from customers. It all comes down to your personal financial circumstances and what works for you – it’s not just about beating interest rate rises. If you’ve had the same home loan for a while or your fixed term is coming to an end, refinancing to a different loan product or lender may be worthwhile in any case. Speak to us and we’ll explain your options. We may be able to find you a better interest rate, or different loan features that could help you save money. Talk to us at Element Finance Joondalup and Fremantle about your financial situation and we’ll help you decide what move is right for you!


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