The clever investor knows that assessing your investments regularly is key to identifying opportunities to build wealth. Knowing when to refinance an investment property could be vital to a successful strategy. So is now the time for you to refinance?

Talk to us and we’ll help you to decide! Despite recent tightening around investor lending, there are still some very competitive interest rates available from a variety of lenders. In this article, we cover some of the common questions we get from our property investor customers – and if you do decide you’re ready to refinance, you can rely on us to make it easy!

Why should I refinance my investment property?

There are generally two main reasons why you may want to refinance your investment property. These are to access your equity, or to change to a different loan.

If you’d like to expand your investment portfolio, refinancing to access your equity could be a good move. You could potentially use your equity as a deposit to buy another property, or to take advantage of some other kind of investment opportunity – talk to your financial planner to see what strategy is right for you.

Accessing your equity to renovate could also be a good move. It could help you add value to your investment property, fast-track its capital growth and perhaps improve the rental value to increase cash-flow.

What kinds of fees are involved?

The good news is that when you refinance an investment property, the costs involved in exiting your existing loan and setting up another are usually tax-deductable. That includes the borrowing expenses and any exit fees or penalties. In the first five years of owning your investment property, you can usually claim borrowing expenses back incrementally, and if you refinance within that timeframe, you can claim the remaining tax deductions immediately. Talk to your tax accountant about the benefits appropriate to your situation. If you don’t have one, we’ll be happy to help you with a referral.

Should I use one lender or multiple lenders?

Professional investors often prefer to use multiple lenders to avoid cross-collateralisation. Cross-collateralisation is where you secure a loan against two or more properties instead of one – which can be inconvenient when the time comes to sell, and risky if property prices should fall. If you use one lender, your properties may be cross-collateralised by default. Having said that, some investors may prefer to use one lender. Overall, it depends on your individual financial situation, goals and the size of your investment portfolio, whether you may choose to go with one lender or several. Talk to us and we’ll help you decide which loan structure is right for you.

Should I refinance all my investments at the same time?

If you’re reviewing one mortgage, you might as well ask us to assess all of your investment loans to make sure they are up to scratch. You may decide you are happy with the deal you are receiving for some of the loans, and only proceed with refinancing others. Or you may decide it’s time to change the way all your loans are structured and if so, we’re here to help.

Talking to your financial planner or tax accountant is also a good idea, to make sure refinancing is the right strategy for you financially. If you’d like to chat or explore the kinds of investment loan options out there, please get in touch today. We’d love to help you find the right finance to fulfill your needs!Investment property refinance made easy!

In Australia, the national past-time seems to be to save, save, save for a house deposit! People are making all sorts of sacrifices to get that all-important deposit together – from living with mum and dad into their thirties, to sacrificing life’s little luxuries. But why are so many Australians so very focused on owning their own property?

Besides providing a cosy nest of your very own, buying a property can potentially open up a world of wealth building opportunities – for your long term benefit! Whether you’re buying your own home or an investment property, home ownership could be a good move to help you get ahead financially. So get ready to start feathering your nest! Here’s a few reasons why real estate can be used as a powerful wealth generator.

Capital growth potential

Real estate has real potential to increase in value over time – this is called capital growth. That’s because the supply of housing is often insufficient to meet demand, supporting growth in values.

Whether you’re buying your home to live in yourself, or you’re buying a property as an investment to rent out to tenants, capital growth is going to be very beneficial to your financial situation. If the value of your property increases, you could potentially make a nice profit when you sell, particularly if it’s your own home. Alternatively, you could access the capital gains (known as equity) as you go along by refinancing your loan – effectively using the property as a money tree.

Make more investments

Money tree you say! We all know that money doesn’t grow on trees, so how does that work?

If you refinance your home loan you can access your equity, which gives you funds that you can spend how you like. If you’re focused on building wealth, you may wish to use it as a deposit for an investment property. Once some time passes and your equity builds in that property too, you could refinance your loan again and use those funds as a deposit for your next investment, and so on. In this way, your nest egg could potentially keep growing and growing.

This is just a broad outline of how property investment works. We recommend that you talk to a professional financial planner to help you formulate an investment strategy that’s right for you. Just ask us if you’d like a recommendation.

Tax perks

As mortgage brokers, we’re not tax advisors or financial planners. But generally speaking, property investment is a very popular form of investment, mainly because the Australian Taxation Office supports it with tax benefits.

One popular strategy is to ‘negatively gear’ your investment property to reduce your taxable income. Negative gearing is when the expenses associated with owning the property (including interest on the loan borrowed to finance the property) are greater than the income it generates. You can claim any net losses against your taxable income and in this way, reduce the tax you’ll have to pay on the money you earn in your job or by other means – all whilst your property investment makes capital gains. Once again, talk to your accountant and financial planner to be sure that a negative gearing strategy is right for you.

Speak with us about your property plans!

Buying real estate could be a smart move for you financially, whether you’re buying a home to live in or are investing in property to rent out to tenants. We’re here to help you maximise your financial position and obtain a loan that’s suitable for your purposes and goals. Talk to us about how buying a property could benefit you – we’ll help you to determine your borrowing capacity, get pre-approval on your loan and can even help you with insightful property data to assist you with locating and purchasing the right place. Just give us a call and we’ll be happy to chat with you about your plans.3 ways to start growing your nest-egg using real estate.

Spring has sprung and isn’t it a glorious time of year? It’s traditionally the time for change and new beginnings! If you’ve been considering a property purchase, now could be the time to get out there, enjoy the sunshine and start your property hunt.
Perhaps you’ve been considering refinancing to a fresh new mortgage that’s tailored specifically to your needs? Or perhaps you’re thinking of renovating your existing home? If so, we’d love to help you out. As the property market heats up, we are seeing plenty of competitive lender deals, so be sure to speak to us about your loan options before you start on your spring property plans!

Interest Rate News

This month, the Reserve Bank of Australia decided to keep the official cash rate on hold at 1.5%. Lenders continue to cut rates for owner-occupiers on principal and interest home loans, and at the same time, try to ensure the proportion of their loan books for investment purposes and interest-only loans meet APRA’s lending guidelines. Despite these restrictions, some lenders have cut interest rates for investors on principal and interest loans in recent weeks. Overall, interest rates remain low and there are competitive deals for both home owners and property investors.

Property Market News

Last month, dwelling values increased by 0.11% overall across the combined capital cities. Sydney’s growth was flat during August, while Hobart led the way for growth in dwelling values, at 0.61%. Hobart was also the strongest capital city performer for the past 12 months (13.61% growth). Canberra experienced 0.57% growth in August, while Melbourne remained resilient, with property values increasing 0.54%. Brisbane and the Gold Coast saw an increase of 0.18% for the month, and in Adelaide property values edged 0.03% higher. Perth’s dwelling values slipped -0.83%, while in Darwin they fell -2.17%.

Auction volumes remained high in Victoria and New South Wales, with 1987 combined scheduled auctions in the week ending September 3. Both had relatively strong clearance rates of 73% and 70% respectively. Across the other auction markets, clearance rates were varied. Tasmania had 10 scheduled auctions, with an impressive 100% clearance rate. The ACT had a 68% clearance rate for 69 scheduled auctions, while South Australia’s clearance rate was 62% for 80 scheduled auctions. In Western Australia, 28 properties went to auction, but only 58% sold, while in Queensland there were 292 scheduled auctions, with a clearance rate of 36%.

If you have property plans this spring, talk to us about a competitive home loan, investment loan, or renovation loan that works to your advantage. We’ll compare the market and line you up with a mortgage that ties in with your personal financial circumstances and goals. Please get in touch today – we’d love to help!Welcome to our September Newsletter

If you’re a first-time buyer and new to inspecting properties, it can be difficult to know what to look out for, especially when you’re excited about your first home purchase!

Well, first-timers, we’ve got you covered. In this article, we’ve put together a 101 guide of things to be mindful of during your home inspections – all the big issues which may be costly to fix down the track. When you do find a property that ticks your boxes, you’ll want to be ready to move fast, so remember to talk to us about getting pre-approval on your home loan before you start inspecting. But first, here’s our checklist to help you avoid buying a lemon!

It’s all about your budget

If you’re a first time buyer and looking for a home, you’ll probably be inspecting properties that need money spent on them for a variety of different reasons. This checklist is designed to help you inspect properties effectively so you can rule out the lemons and save money on multiple building and pest inspections. But remember, it won’t rule out the need for a professional inspection on the place you decide to buy!

Structural issues: These are generally the most expensive and difficult problems to repair. During the inspection, keep your eyes peeled for signs of subsidence, uneven floors, cracks in the walls or brickwork, or doors that don’t close properly.

Plumbing issues: You don’t want to be knock, knock, knocking on heaven’s door when you take a shower, so don’t be shy about turning on the taps to check for hammer issues. Make sure the water pressure is good and the drains are operating well.

Dampness: Stains, water marks and damaged or peeling paint may indicate the property has issues with dampness. Sometimes, vendors try to paint over problems, so channel your inner canine and use your sense of smell during the inspection.

Mould: This may be an indication of a bigger, more expensive problem, such as a leaky roof, plumbing issues, inadequate ventilation, or rising damp. All of these can be expensive to fix, so check bathrooms, ceilings, window frames and walls meticulously.

Termites: When you’re inspecting properties, look for the tell-tale signs – sagging or buckling floors, hollow-sounding beams and “mud leads”. A bad termite problem may produce a sweet, sugary smell. No matter where you live in Australia, always get a pest inspection, because termites are everywhere and they can be costly to evict!

Wiring: If the property is sporting a 1970s chandelier, or antiquated switches and sockets, the electrical wiring may be outdated and it could end up costing you to rewire. Check the electrical box as this will tell you when the system was last updated. If it does not have a residual current circuit breaker, then it has probably not been brought up to modern standards.

Appliances: It’s always a good idea to take a good look at the fixed appliances such as the oven, stove, air-conditioner, dishwasher and heating system. If they look like they are on their last legs, you’ll need to factor in the cost of getting them replaced.

Renovations: Homes at the less pricey end of the market often have outdated kitchens and bathrooms. Many first home buyers think they can live with the situation until they save up to do a renovation, however you need to be realistic – these can be expensive to replace so get a quote so you can factor it into your budget! If renovations have already been done, check the quality.

Asbestos: Properties built before 1990 may contain asbestos. During the inspection, find out when the property was built and ask about the construction materials. If the property is of ‘fibro construction’ it probably has asbestos – which is not dangerous if it is in good condition, but get your building inspector to check carefully before you move ahead with a purchase.

Roof: Stand back in the street and cast your eye over the roof. What is it made of – tin or tiles? Is it rusty? Are there any missing or damaged tiles? Does the pointing between the tiles look crumbly? These can all indicate the roof needs work, so if it looks at all suspicious, be sure to get it checked out properly as a new roof can be costly.

We hope you’ll find our inspection guide handy! But remember, even if you’ve developed an eagle eye and a nose for trouble, protect yourself by getting professional building and pest inspections before you buy anything! If you need a referral to a reliable inspector, just let us know. Before you set out on your buying journey, it’s a good idea to talk to us so you can determine your budget and get pre-approval on your home loan. Then once you find the right place and it’s been given the all-clear, we can help you move quickly. We’d love to help with your first home buying journey, so please get in touch!First home buyers, what to look out for when inspecting properties

If you’re looking to buy your next home, downsizing might be the way to go. After all, sometimes less is more and it could work wonders for your finances!

In this article, we explore some of the benefits of downsizing – from cutting back on maintenance and energy costs, to having more money in your pocket to invest. And remember, when you are ready to purchase your next home, we’d love to help you find a loan that meets your financial needs and future aspirations. Here are some of the key reasons to consider downsizing.

More funds to invest

Downsizing allows you to unlock the equity in your current home to use for investment purposes. If you are lucky, you may be at a point where you’ll be able to pay off your new home with cash, then use any leftover funds to expand your property portfolio and start generating income from an investment property. You could also use the money on a new car or other lifestyle pursuits. If you’re interested in investing in property, just give us a call, we can help you in many different ways.

Fewer expenses

Downsizing can drastically reduce your expenses, from cutting your mortgage repayments, to slashing your living costs. Energy is one area you are likely to notice real savings when you move to a smaller property. What’s more, downsizing may encourage you to stop blowing money on furniture, appliances, electronics and “stuff” you don’t actually need. It will also encourage you to get rid of unnecessary clutter – there’s only so much you can squeeze into a smaller home, after all.

Lifestyle benefits

Looking for a sea change or a tree change? Downsizing could provide a great opportunity for you to live in a more desirable location, in housing that is more suitable for your needs. There are many great locations to consider – from the coast to the hills, you can find great value properties in communities where you can indulge your personal interests. Sailing, hiking, exciting adventures in your caravan – you name it! If you’re ready to retire, an empty-nester, or are recently single, downsizing could be the fantastic new chapter you’ve been looking for!

Let’s face it – bigger properties can be hard work. Not everyone wants to spend their life maintaining a larger property or garden. Just think of what you could do with the time it takes to clean and maintain that great big house. Golf-course here you come!

New tax breaks

In the 2017-18 Federal Budget, the Government announced plans to encourage older property owners to downsize. This is intended to help free up larger homes for younger, growing families. From July 2018, retirees may be able to inject up to $300,000 into superannuation if they sell their home after they reach the age of 65. The existing voluntary contribution rules for people aged 65 and older (work test for 65-74 year olds, no contributions for those aged 75 and over) and restrictions on non-concessional contributions for people with balances above $1.6 million do not apply to contributions made under the new downsizing cap.

To qualify, you must have owned your property for 10 years. What’s great about this new initiative is that both members of a couple can take advantage of the measure for the same home – that means as much as $600,000 per couple can be put into super! However, keep in mind that the proceeds contributed to superannuation will be included in the assets test for the age pension. For more details ask your tax accountant – if you don’t have one, ask us for a referral, we’ll be happy to help.

While it’s tempting to hold onto the family home because of the sentimental value, the reality is that it may be holding you back from a better lifestyle and a more comfortable financial situation. Downsizing could allow you to find a home that’s more appropriate to your lifestyle, while also freeing up time and money to use elsewhere. If you’re looking to purchase your next home and would like to explore your home loan options, please don’t hesitate to get in touch! We would love to find you a competitive home loan that works to your advantage.4 benefits of downsizing


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