Curb Appeal

First impressions are everything. When it comes to renovating with resale in mind, you want your home to have that ‘wow’ factor as soon as buyers see it. Consider the view from the street – the front façade, fence, garden, windows, roof and driveway. Spruce them up and make them work together to add charm.

Kitchen

Renovating the kitchen is one of the most effective ways to add value to a property. Many buyers like the idea of having the kitchen done for them, so that they can just move in and enjoy it. If you have a larger budget, you might like to opt for a custom-made kitchen that’s made-to-order to suit the home. Alternatively, there are some great modular kitchens available at reasonable prices. New cabinetry, appliances, benchtops, and a striking splashback will do wonders for your home’s sale price.

Bathroom

Renovating bathrooms with modern fixtures and fittings can also drive up the value of a property. If your bathroom is passable but just needs some love, you could simply respray the tiles, fixtures and fittings, rather than redoing the whole lot. Another idea is to redo the tiling yourself, and update only the fixtures that need replacing, whether it’s the bathtub and vanity, or basins and shower screen. If you only have one bathroom, consider adding extra bathrooms to your property, as this can boost a property’s value.

Flooring

Installing new flooring can make a big difference to the appeal of your home, and therefore its value. There are plenty of great budget flooring options out there that look attractive. Vinyl planks and laminate flooring for example, are both popular, durable, budget-friendly products that you can install yourself. When choosing your flooring, remember your target audience. If your market is a family or property investor, wall-to-wall carpets may not be the best option. Remember the golden rule, minimal expenditure, maximum return.

Paint

It’s amazing what a fresh coat of paint can do to transform a property! A 1960’s home with retro mustard wallpaper can look instantly modernised and refreshed with a new lick of paint. Best of all, a paint job can be relatively inexpensive, particularly if you do the painting yourself. If you want to give your property a lift and appeal to the majority of buyers, be sure to go for a neutral colour scheme that won’t date quickly.

Additional bedrooms

If the space allows, adding more bedrooms to your property is another way to increase its value. While you may be up for a sizeable outlay in the tens of thousands, the financial rewards come sale time can also be big (in some cases, several hundreds of thousands). Remember, properties are typically valued based on land size and the number of bedrooms – the first, you can’t change, but the second you can. If you need help with finance for major structural renovations, speak to us about your options.

If you’re looking to renovate to boost your property’s value, remember – careful budgeting and planning is key. We’re here to help with that, as well as to help you work out the right option to finance your renovations. You may be able to refinance your home loan to access equity to complete the project. Alternatively, we can walk you through the other finance options available to you, depending on your financial circumstances and goals. Please get in touch with your Element Finance mortgage broker in Joondalup and Fremantle and we’ll help you get the transformation under way!

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!

The pros of commercial property investment

Commercial property investing can offer significant cash flow benefits. Some commercial properties offer rental returns of more than 8 per cent, compared to the current median rental yield across the combined capital cities of 3.32 per cent (based on CoreLogic data). What’s more, commercial properties usually offer greater rental certainty due to the long-term nature of leases. Commercial leases often run for between three and 10 years, and agreements usually contain a term for set rental increases in line with inflation.

With commercial properties, there are also fewer ongoing expenses involved. Tenants usually cover most maintenance, rates, insurance and body corporate fees, unlike with a residential property, where the owner foots the bills. Another perk is that if the tenant puts in a new fit-out at their own expense, the improvements may increase the value of your property without it costing you a cent.

The cons of commercial property investment

It can sometimes be difficult to find new tenants for commercial properties, so as an owner, it’s important to be prepared to cover the expenses if the property is untenanted for an extended period.

Economic factors can also heavily impact on the health of a commercial property investment. For example, economic downturns, high unemployment or poor business confidence could affect demand. That being said, research and choosing the right commercial property in the right location can usually mitigate these risks, just like with residential property.

What should you research? As with any property purchase, research is key to finding the right investment opportunity. Be sure to research local prices and market conditions, any council restrictions or zoning regulations that could affect your investment, and upcoming infrastructure developments.

In terms of location, think about the property attributes your tenant might desire. Is it in close proximity to transport hubs? Car parking? Perhaps it’s close to other complimentary businesses? Always remember the rules of supply and demand – it’s best to make sure there isn’t an oversupply of similar properties in the neighbourhood.

What are the benefits of choosing an office for first-time commercial property investors?

Office buildings may offer a less daunting entry point into commercial property investing for first-timers because of the strong demand at present. According to the Colliers International Office Demand Index (Quarter Four, 2017), Australia’s major office markets are set for a strong start to 2018, on the back of increased demand and activity in 2017.

Colliers measures demand in terms of demand and supply per square meter. In the final quarter of last year, office property markets nationally recorded a 19 per cent year-on-year increase in enquiries (demand), from 415,737sqm in the last quarter of 2016, to 492,947sqm in the final quarter of 2017. Increases were seen across all segments of the market and overall, there were 942 deals for 785,252sqm of office space in 2017. Ask us for a copy of the report if you are interested!

For some investors, buying commercial property such as an office can be a sound investment strategy. If you already own residential investments, expanding into commercial property investment may allow you to diversify your portfolio and generate an attractive income. If you’d like to find out more about your finance options, please speak to us. Commercial property finance can be more complex than residential finance, but we can walk you through the process and find a commercial property loan that ties in with your unique financial circumstances and goals. Contact your Element Finance mortgage broker in Joondalup and Fremantle if you need support. We’d love to hear from you.