secret weapon
Investing in property is a big decision that can keep even the most seasoned property investor awake at night. How do you know if you’ve got your investment strategy right? How can you make sure you’re choosing the right property? Where can you find the time to do the necessary research? What is the right price to pay?

A good buyer’s agent is the property investor’s secret weapon. They provide professional guidance on every aspect of your property investment journey, with the objective of saving you time, money and many sleepless nights. A buyer’s agent can help you take a more professional, balanced approach to your property investment activities, removing the emotional aspects of the process and saving you from the natural human tendency to make unwise, impulsive decisions under pressure.

What does a buyer’s agent do?
Buyer’s agents specialise in representing a buyer’s interests during a property purchase. Whilst they are most commonly used by property investors, buyer’s agents are also frequently used by families searching for exactly the right home, and people moving interstate or overseas, making the process much easier by doing all the leg-work and narrowing down the options.

Buyer’s agents usually offer differing levels of service, depending on your requirements. The full service covers every aspect of the property investment journey including:

  • Formulating an investment strategy that maximises your funds
  • Searching for suitable properties to fit your buying strategy
  • Researching every aspect of a property to ensure profitability
  • Arranging inspections with vendors and real estate agents
  • Negotiating a price and terms of sale
  • Bidding at auctions on your behalf
  • Co-ordinating your professional team – solicitors, mortgage brokers etc.
  • Ongoing service to help you establish a complete portfolio.

Getting the property research and selection process right is arguably the most important part of your property investment journey. It certainly takes the most amount of time and getting the right information requires a certain amount of know-how too. A professional buyer’s agent knows which questions to ask and where to look for the answers. They can often access information from developers, councils and other relevant bodies that is not readily available to the ordinary consumer.

However, you don’t necessarily need to engage the full services of a buyer’s agent. You can also engage a buyer’s agent just to do research for you, to negotiate a price for you, or to bid for you at an auction if you would rather not do it yourself. This can be a good idea if you are nervous, inexperienced, you can’t attend the auction yourself, or you feel you may get carried away by the auction process and pay too much.

How much does a buyer’s agent cost?
There are many buyer’s agents and the cost will vary according to the agent you choose, your location and your requirements. Qualified, professional buyer’s agents generally charge between 1.5  – 3% + GST of the purchase price of the property for their full services, however this can often be negotiated in favour of a flat fee and savings may be obtained if you are planning on purchasing multiple properties.

When providing a research service only, a negotiating service only, or a bidding service only, your buyer’s agent will usually charge a fee for their time. Again this will vary according to the agent, the location and your requirements. You can generally expect these services to cost around $1,000 + GST depending on how much of their time you require.

If you are purchasing a property for investment purposes, the cost of a buyer’s agent is generally tax deductible as are most of the professional services you will require as part of the process.

How do you find a good buyer’s agent?
A good way to locate a great buyer’s agent is by word of mouth – there’s nothing like a recommendation from a friend, colleague or trusted business advisor (like your mortgage broker) to make you feel confident about someone’s credentials. However, you can also find some reputable buyer’s agents through the Real Estate Buyers Agents Association of Australia (REBAA) website.

Sometimes, outsourcing is the sensible option
Engaging a buyer’s agent can save you hours of time and loads of stress. If you’re new to property investment, then a buyer’s agent can also be invaluable in helping you to avoid costly mistakes. When you do find a property you want to buy, all the hard work in locating it can easily be lost in the final hurdle – the purchasing process. Having an expert on your side to negotiate the price you need, or to bid for you at the auction, can reduce the risks and make all the difference. Using a buyer’s agent is one case where outsourcing can take a lot of the frustration out of the process!

For more information, or to get your property investment finance in place, give us a call. We’ll be happy to help.

Did you know that termites damage more than 180,000 homes and buildings around Australia every year?

That the high prevalence of rats and mice in Australian homes is a major factor in the distribution of food poisoning organisms like salmonella? Clearly, if you’re thinking about buying a property, the value of an independent building and pest inspection report can’t be understated!

Reduce your financial risks.

Buying a property can be a very emotional decision and it’s easy to forget about looking for defects when you finally find a property you love. But the reality is that all property buyers should obtain an independent building and pest inspection report in order to remain sensible and objective about the property they’re purchasing and reduce the risk of incurring expensive repair bills down the track.

A building and pest inspection report will provide you with a professional’s evaluation of the condition of the property you are purchasing. They will provide you with a visual review of all elements of the property including structural inspections of the exterior roof, interior roof spaces and eaves, foundations, subfloor, wiring, interior plumbing, sheds and pergolas, fireplaces, electrical and air conditioning systems. Your report can also cover things like windows, doors, flooring, ceilings and other temporary fittings and so on. If you have any particular concerns about a property you are looking to buy, you can mention them to your inspector and they will take special care to put your concerns to rest.

There are three good financial reasons why you should get a building and pest inspection report:

  1. To check for structural and pest issues, so you are able to budget for rectifying them.
  2. To use the information to negotiate a lower price, or for repairs to be completed before you purchase the property.
  3. To find out if the problems are so severe that they may adversely affect the property’s future resale value, or be so expensive to repair that you may be put off purchasing the property entirely.

Ideally, a building inspection should be performed before you sign a Contract of Sale, or prior to auction if that is going to be the method of sale. When you’re not buying at auction, it is standard practice to insert a clause into the Contract of Sale stating that the purchase is subject to building and pest inspection reports.

Even new build homes can have problems.

Whilst it’s true that structural defects, termite damage and pest infestations tend to be more common in older homes, unfortunately even new-build properties can come with issues. If the property is new, paying for a fully comprehensive building inspection report is still a good idea because it will ensure that the building has been finished correctly according to the building plans and help you identify any problems the builder has overlooked or any issues that may not be covered under the building warranty.

When it comes to pest problems, these tend to be endemic to areas and their prevalence will have as much to do with where the property is located, as the property’s age. In many areas, homes under construction are extremely vulnerable to termite attack and other pest issues such as rats and mice.

A few hundred dollars could save you thousands.

Depending on the location and size of your home, a building and pest inspection report can cost anywhere from $300 for your average suburban home to $600 or more for larger properties or ones located in a rural location. However taking the precaution of getting a building and pest inspection report before you buy could save you a great deal of money and hassle.

When a professional building and pest inspector comes across a problem that may be significant, they will recommend you seek further advice from an appropriate professional before proceeding with the purchase. Depending on the nature of the defect and the extent of the damage, you can get quotes to make repairs or simply walk away from the deal if it is too hard.

For more information about locating a reputable company or qualified building industry professional to perform your building and pest inspections, please give us a call. We maintain relationships with many professional companies relating to the purchase of your home, so please don’t hesitate to get in touch for a referral if you require any assistance.

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Rentvesting. It’s a whole new word in today’s popular culture, but it also represents a revolution in home buying strategy, particularly for first home buyers and those struggling to move up the property ladder. But what is it? And what are the benefits?

What is ‘rentvesting’?

Everyone agrees that buying your first home is becoming increasingly difficult. The struggle to save up a deposit for your first property purchase is getting harder every year, with home values increasing by as much as 13% or more per year in major markets such as Melbourne and Sydney. The reality is that the longer you wait to buy a property, the more difficult it may become to save a deposit or borrow enough money to be able to afford to buy it.

For many people, being able to afford to buy a home in a location where they actually want to live is making the challenge more difficult still. With the most affordable homes often located in new suburbs or outer suburbs, finding a place you can afford to buy near to your place of work, family or required lifestyle amenities can be completely out of the question.

‘Rentvesting’ is a new buying strategy that’s recently emerged in response to these issues. It entails purchasing your first property as an investment rather than a place to live. Rentvestors typically purchase a property that meets their budget in a location they can afford, then rent a home in a location where they would prefer to live and work. It is frequently more affordable to rent a home in a popular location than it is to buy it, and this basic financial fundamental is what’s behind the rentvesting revolution.

Technically, you don’t actually have to be renting somewhere to be a ‘rentvestor’. The term also applies to many Gen Y first home buyers. This class of ‘rentvestor’ is typically living at home with mum and dad to reduce their living expenses whilst they save up a deposit for a property purchase. These savvy property buyers may continue to live at home with mum and dad even after they’ve purchased their first property, and perhaps even after they’ve purchased their second.

What are the benefits of ‘rentvesting’?

The primary benefit of the rentvesting strategy is that it allows you to get into the property market sooner. As every successful property investor will tell you, the sooner you get into the market, the sooner your property can start generating capital gains and the sooner you can start to build wealth.

The beauty of this strategy is that in a rising market, you may soon have equity you can use to purchase a second property that’s also in an affordable location. Again it probably won’t be a property you want to live in, but you’ll have two properties gaining equity as home values rise (potentially), two sets of tenants paying down your mortgages for you, and greater tax advantages as well.

Research is the key to a successful rentvesting strategy

Buying an investment property first means that you won’t have to compromise on the location when you make your purchase. This can also mean you can make investments that may return you the greatest capital gains. You can literally restrict your property searches to properties that meet your buying criteria of price, affordability and capital growth potential – a luxury that most owner-occupier first home buyers simply don’t have.

Careful and thorough research is the key to success with a rentvesting strategy. The property needs to deliver a very consistent income and at the same time, achieve steady capital growth. To succeed, you first need to identify a location that provides capital growth potential, then carefully consider the housing stock available within that location and choose one that will best meet your needs.

Call us to get started

As your professional mortgage broker, we’re here to help you assess your financial position and work out what you can afford to invest. We can also help you with up-to-the-minute property market data that could give you the edge when selecting the right property for your means.

For more information about rentvesting, or for an informal chat about your plans with no obligation, please give us a call today. We’ll be happy to help you start rentvesting if it’s the right solution for you.

Please welcome Matt Lyons to Element Finance Joondalup!

Matt has recently joined Element Finance Joondalup bringing with him 9 years of experience garnered from two large banks and a small Perth broker. More recently, Matt has built several houses and knows first hand the hurdles a home buyer or investor can experience, and he has the ability to break down this process into simple concepts that make the whole process easy to understand.

After migrating here from England with his parents back in 1993, Matt has adapted to the Australian way of life and enjoys finance, property and investment. It was during his time at The Banks he realised he enjoyed discussing property and creating relationships to deliver a product for the Client that they both understand and meets their needs.

We are really excited Matt has chosen to join us. If you or any of your friends or family would like to chat with Matt to see how he can help improve your situation, you can contact him directly on or 0401 089 524

Here’s some great end of financial year budget ideas for home buyers.

Getting your budget under control and your finances in order is absolutely essential to anyone looking to apply for a home loan, but it’s particularly important for first home buyers about to take the first step on the property ladder. Now the end of financial year has arrived and you’re getting all your paperwork together for your tax return, why not take stock of your financial situation and plan your budget for the year ahead at the same time? Here’s a few things to consider if you’re looking to get financially fit for a home loan application in the new financial year.

Reassess your budget and get serious about your savings.

When you apply for a home loan, particularly as a first home buyer, it is important to have a thorough understanding of your financial situation and good savings habits. Lenders will want to see an established history of regular savings before they will give you their best rate on a home loan and for this reason, you should take a realistic look at your spending habits and create yourself a budget to ensure your savings will grow at a steady rate.

Work out how much deposit you’ll need and set yourself a savings target.

If you set yourself a savings target, you may find it will be much easier to stick to your budget. To set your target, first you’ll need to work out how much you need for your deposit. The amount of deposit you will need will depend on the cost of the property you want to buy, but if you have an idea of the kind of property you want to purchase you’ll be able to set a goal. It’s recommended that you have a deposit of at least 5% of the purchase price, however if you can possibly save 20% of the purchase price you’ll avoid paying Lenders Mortgage Insurance.

Make an accurate assessment of any debts and ongoing expenses.

Lenders assess your creditworthiness on the amount of money you already owe, your ability to repay your debts and your capacity to take on more debt. Paying down any credit card debts or personal loans prior to applying for your home loan will improve your borrowing capacity and give you the best chance of loan approval when you apply.

Even if you don’t have any debt on your credit cards, lenders take into consideration the credit limit on your credit cards and count this as potential debt. So if you have several credit cards, it may be a good idea to cancel some of them now if you are planning on applying for a home loan in the next financial year.

If you have a lot of debts, think about consolidating them.

If you take stock of your debts and realise you won’t be able to pay them all off anytime soon, it’s a good idea to look at ways to reduce your interest liability. Credit cards, store cards, short-term personal loans and cash advances all carry high interest rates and this can make them quite difficult to pay down. Getting your finances in order may mean it’s time to consolidate your debts.

Consolidating your debts means rolling all your debts into one, usually using a loan that has a lower interest rate. If you have quite a few expensive debts it may be possible to roll these into your home loan if you have one, or perhaps a personal loan that carries a lower interest rate overall. This may save you a great deal of money on interest payments, which is money you could use to pay off your debts faster. It could also allow you to spread your repayments over time, making them more affordable. If you want to be eligible to apply for a home loan in the next financial year, consolidating your debts sooner rather than later may be a good idea.

The end of financial year is a great time to get your finances in order and you never know, you may get a tax refund that could really give a boost to your savings efforts for a deposit for your home! Remember, we’re here to help you get your finances under control so you can save your deposit and get into your new home sooner. If you’re planning on applying for a home loan in the next financial year, don’t hesitate to give us a call today.

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