Making a fresh start in a new family home is an exhilarating experience. Maybe you’ve just welcomed a new addition to the family (congratulations!)? Perhaps your kids have moved out, so it’s time to downsize?

Maybe you’re craving a change of scenery, or you’ve scored a fantastic new job and now’s the time to upgrade your home too. Whatever the reasoning, buying your next family home is an adventure, and we’re here to help make the journey as smooth as possible. Here’s a quick rundown on common mistakes to avoid when buying your next family home.

Mistake # 1: Going it alone

When you decide to buy a new family home, one of the biggest decisions you’ll face is what to do with your old home. Do you sell the property and put the money towards your new digs, or do you turn it into an investment and rent it out? Do you get two mortgages, or refinance your current mortgage to buy the second property? What can you afford and what is best for your future? The questions can seem endless, but don’t worry, you don’t have to solve them all alone – we’re here to help!

Having a professional mortgage broker on your team will make the decision making process much easier. Remember, we have years of experience and access to hundreds of different loan products from Australia’s leading lenders. We can help you assess your financial situation and borrowing capacity to inform your decisions, and then find you a loan that’s exactly the right fit for your current personal financial circumstances and future goals

Mistake #2: Being short-sighted about the future

When the time comes to buy a new family home, it’s important to plan for your family’s future and to think about the kind of living arrangements you may require in the long-run. Often people try to fulfil their current needs, without giving too much thought to where they’ll be down the track. So, for example, if you plan to have three kids in six years, there’s little point buying a new home with just one extra room, as you’re likely to need four! Perhaps you’re a few years off retirement and won’t be needing a huge family home that requires a lot of effort to maintain? Whatever stage you’re at in life, it’s important to plan for what’s on the horizon and to make sure your new home marries with your actual needs.

Mistake # 3: Buying without doing your research first

You’ve bought before, so it’s easy to believe that you have a handle on the property market and don’t need to do any extensive research. But things change rapidly in the real estate world and it always pays to do some thorough research about where and what to buy next.

The goal is to buy a home that will appreciate in value over time and potentially be attractive to tenants if you ever decide to rent it out. You also have to make sure the property and neighbourhood meet your family’s needs, whether that be good schools for the kids, dog-friendly parks for young Fido, great access to public transport for your partner’s work commute, or catering for your needs in retirement. Before buying, make sure you get to know the neighbourhood intimately – research the crime levels, the quality of nearby schools, the transport options and proposed nearby developments, or other facilities you may need like hospitals or treatment centres. Ask us for a property report to help you get started.

Don’t forget to meticulously inspect the property, and to get building and pest inspections done before you put in an offer or bid at auction. We can often help you with referrals to reliable professionals, so please ask us.

Mistake # 4: Letting emotion cloud your judgement

It’s hard not to let your feelings overtake your better judgement when you do find a home that ticks all your boxes, but it’s important not to pay more than the property is actually worth. Compare recent sale prices of similar properties in the area to determine the correct price, and don’t be fooled for a second by clever home staging tactics designed to make you fall in love with the property and sign the contract on the spot!

Lastly, try not to be too sentimental about buying where you currently live. Another neighbourhood could provide you with a property with greater capital growth potential, or more home for your budget to better meet your future requirements and lifestyle.

Remember, we’re here to help!

If you’re ready to buy your next home, please get in touch. We’ll find you a personalised home loan solution, tailored to meet your particular financial circumstances and goals. As your mortgage broker, we can provide advice about everything from maximising your credit facilities to potentially keeping your current home as an investment property. Here’s to new beginnings! We’ll look forward to hearing from you soon. 

Whether you’re a seasoned investor looking for a new opportunity, or you’re after other ways to get your foot on the property ladder, a commercial property investment may be worth considering.

In this article, we explore the reasons why people venture into commercial property investing, and some of the areas to be aware of. And if you do decide to go down the commercial route, we can hook you up with an investment loan that suits your situation and objectives!

What is commercial property?

“Commercial property” tends to conjure up images of dusty industrial warehouses, but it’s a general term that covers all kinds of property that isn’t residential, or is used for some kind of business purpose. That includes everything from offices and retail outlets, to industrial sites and doctor’s surgeries. It can even include car parks!

The benefits of investing in commercial property

Attractive yields

If your focus is on generating income from rents, investing in commercial property may be the way to go. Commercial properties typically return a much higher rental yield than residential properties – usually upwards of 7% return. In comparison, the average residential rental yield across Australia’s capital cities fell to 3.2% in February 2017. (Rental yield percentages are calculated on the amount of rent compared to the cost of the property).

Additionally, the costs of owning and managing a commercial property are usually lower, because most of these costs are covered by the tenant.

Potential to target growth areas

Commercial property investment often provides the opportunity to capitalise on growth areas, both in terms of location and the business economy. For example, a recent report by Deloitte identified that our future business economy is likely to expand rapidly in the areas of communications technology, hospitals and a wide variety of other health industries, food processing, private schooling and education. Hospitality and tourism are other areas that traditionally enjoy steady growth.

What to watch when investing in commercial property

Potentially lower rates of capital growth

While commercial property often provides more attractive rental yields than residential property, the capital growth potential is often not as strong because the land value of commercial premises is usually not as high. This is not always the case, so if you do your research carefully, you may be able to locate a commercial property investment in a growth location. Often it’s the popular shopping and holiday destinations that provide good capital growth potential for commercial property purchases, but these locations can be expensive and difficult to secure, so do your homework.

Associated costs

Goods and services tax (GST) applies when you buy a commercial property, so you need to factor in an extra 10% of the purchase price when you buy. Often investors have to pay more stamp duty for commercial properties than residential properties, too. Properties used in the running of a business are also subject to capital gains tax when you sell.

Additionally, some lenders require a higher deposit for a commercial property investment – 30% instead of the usual 20% recommended for a residential property purchase. But this requirement differs from lender to lender and often depends on the value of the property you want to purchase. To find out more about how much deposit you may require, call us for a chat and we’ll be happy to help you crunch the numbers.

How we can help

If you decide to invest in commercial property, it’s important to have professional advice from your mortgage and finance broker and check with your accountant about the tax implications before you begin. We’re here to help you structure your loan the right way and do all the legwork to help you obtain finance to suit your current financial circumstances and future goals. There’s so much more to know and understand if you’re interested in buying a commercial property, so please get in touch today!Why invest in commercial property?

It’s been an interesting month for the housing market, with most capital cities experiencing softer growth in April than in the first three months of 2017.

Hobart is leading the way as the strongest housing market, with home values increasing 5.1% over the past three months. In Melbourne and Sydney home value growth slowed in April, but the upside is that this may bring some relief on the horizon for first home buyers!

The Federal Budget was released on Tuesday this week, introducing changes which may affect property prices and buying conditions. Of late, the news has also been dominated by discussions that may impact property buyers and owners – such as the housing affordability debate, negative gearing, capital gains tax discounts, interest-only lending, borrowing through Self-Managed Super Funds and proposed changes to first-home-buyer grants and stamp duty. Please call us if you have any concerns or questions about how any of these points they may affect you, we’re here to help!

Interest Rate News

This month, the Reserve Bank of Australia (RBA) decided to keep the official cash rate on hold at 1.5 per cent. Meanwhile, some lenders have raised their interest rates marginally on both owner-occupier and investment loans outside of RBA movements in recent months.

The Australian Prudential Regulation Authority has introduced new caps on lending for interest-only home loans, which may make them more difficult to obtain for some property investors. But there are still plenty of lenders prepared to give interest-only loans to solid borrowers.

Property Market News

Auction activity has picked up, following the Easter lull. The last week of April saw high clearance rates of 79% in Victoria, with 1335 scheduled auctions, and 75% in New South Wales from 1007 scheduled auctions. The Northern Territory had a 100% clearance rate, but there were only four scheduled auctions. The ACT had a clearance rate of 68% for 62 scheduled auctions, while Tasmania’s clearance rate was 67% for 10 scheduled auctions. The clearance rates were lower for South Australia (65%), Western Australia (50%) and Queensland (45%).

Home values only increased by 0.1% across the combined capital cities in April – the lowest month-on-month rise since December, 2015. Home value growth cooled in both Sydney (0% growth in home values for the month) and Melbourne (0.5% growth over the month). In contrast, Hobart’s home values grew 1%, while Adelaide’s increased 0.8% and Brisbane’s rose by 0.6%. Darwin’s property values rose by 0.5% in April, while Perth’s and Canberra’s fell 1% and 2.8% respectively.

If you’re considering refinancing, purchasing your first home, your next home, an investment property, commercial property, or even a car at the end-of-financial-year sales, we can organise the right finance for your individual needs and financial goals. Set yourself up for a bright financial future by speaking to us about your options today!

Welcome to our May Newsletter

When you decide to sell your home or investment property, it’s natural to want it to fetch the highest sale price possible, but it’s also important to be realistic when setting your price or you risk scaring the buyers away.

Here are some pointers to help improve your chances of selling above market value, whilst not overpricing your property. And remember, when you do decide to move on and buy your next property, we can help you find the right home loan to meet your current and future financial needs.

1) Find a reputable real estate agent

Selecting the right real estate agent is an important part of achieving a desirable sale price, as they provide the necessary advice throughout the sales process to help you reach your goals. You’ll also need someone you can count on to attract the right buyers and secure a sale price that’s on the higher end of the spectrum.

The easiest way to narrow down your search for the right real estate agent is to pose as a buyer yourself. Put the agent’s knowledge and people skills to the test, and research how they are performing in the local area. Their knowledge of the local property market is key. To get the maximum price, they need to have a very sharp understanding of where the local home values are headed and have the skills to persuade prospective buyers that your property is still a bargain, even though you are asking maximum price. The right candidate should be a good communicator, efficient and adaptable.

2) Clean, de-clutter and repair

Prior to selling, it’s imperative to go through your property with a fine-tooth comb. Clean meticulously, de-clutter ruthlessly and repair anything that needs fixing. Buyers will be more likely to pay your price if they know it will be years before they have to spend any more money on maintenance. This is particularly true of property investors – who also don’t want the hassle. Ensuring the property is looking its absolute best will make the next step easier.

3) Style to sell

The goal is to make the buyer fall in love and for your property to be so irresistible, they simply have to accept the price tag. The more attractive a home looks, the more likely a buyer will pay top dollar for it. The key is to showcase your property’s strong points and to make it ‘pop’ in the eyes of prospective buyers.

When it comes to décor, tastes vary widely, so it’s a good idea to stick to neutral or popular choices. Knowing your buyer profile will help you style the property appropriately, but if in doubt, hire a professional stylist. Subtle touches can help drive up the final price.

4) Invest in marketing

Your marketing efforts can make all the difference to your sale price. The more people interested in the property, the higher the competition and the more likely the property will sell above market value.

The quality of the photography is essential to getting a higher price. If you use a professional stylist to set up the property, they often have their own professional photographer. If your real estate agent is taking care of the photos, check the quality of the photography they’ve used with past clients. If they take unacceptable photos of your property, then insist on doing another photoshoot with a better photographer, until you reach a better result. Lastly, use enticing copy to hook buyers and advertise through several avenues to increase your property’s exposure. A good real estate agent will help you with all this!

5) Choose your timing wisely

Timing is everything and choosing when to sell, based on the property market in general, the wider economy, and even the season, is important. It’s all about supply and demand, and if you want to sell your home above market value, you need to wait until the supply is low but the demand is high locally for properties similar to yours. Keep an eye out for your competitors and avoid putting your house on the market at the same time as others in your suburb offering the same features. Your home will get a greater price if it seen as a rare commodity.

Along with timing, deciding whether to do a private sale or an auction can impact what price you fetch. Your real estate agent will be able to provide insights about which sales technique would suit your property and location best, and recommend a starting price that will lure the right buyers.

In order to sell your home or investment property above market value, your property must be beautifully presented and effectively marketed. When you are ready to move on from your current home, we can help you find the right home loan product for your next property. As your mortgage and finance broker, we will guide you through the transition period, and locate a home loan that’s right up your street. Happy selling and good luck!How to sell your home above market value

If you have already purchased your first home, congratulations! The next step in building wealth for your future could be to plan for the purchase of a second property as an investment.

Owning two properties is a great financial ambition and with Australian house prices on the rise, doing so has great potential to improve your financial situation in the long term. But please don’t be fooled – just because you have done it once before doesn’t mean it will be easy! Buying a second property also requires hard work, discipline and effort. Here are some financial pointers to help with the process of buying your second property.

    1. Property purchase purpose
      The first thing you need to understand is why you want to buy a second property. Are you planning to rent out your original property and buy something else to move into? Are you buying a ‘renovators dream’ to knock down and develop? Are you buying because you want a beach house and you will spend half your time in each location?

      Really understanding why you want a second property before you set out will help to inform all your other decisions in the property purchasing process. For example, if you are buying as an investment property, decisions around location, capital gain potential and rental yield will influence you in a different way than when you are buying something for yourself to live in.

    2. Your cash flow and budget
      There are no two ways around it – having a second mortgage is going to have a significant impact on your monthly cash flow! Ask yourself: can you easily service both mortgages? Do you have a stable income?

      Better still, keep a budget so you know what you can reasonably handle so you won’t over-extend yourself. The key here, and this is what a lender will look for, is your ability to earn enough to service both your first and second mortgage effectively, on top of the cost of living.

      It is important to fully assess and understand your borrowing capacity. (We can help you with this – just give us a call). As with any other home loan application, your second mortgage will be assessed on your income versus expenses. Lenders will look at your overall position of asset and liabilities, which means if you have any existing debts such another mortgage (which you do have), personal loans or credit cards, your borrowing capacity is going to be less, compared to if you were debt-free.

      When considering your cash flow and budget, it is also well worth including a ‘safety buffer’ contingency plan. This could be three to six months’ worth of repayments and living expenses, or similar, depending on your savings ability. It is important to have a safety buffer if you are hoping to use your owner-occupied property as security to fund the deposit for the second home.

    3. Will you be renting out one of your two properties?
      If the answer is yes, and for most of you we imagine that you are buying a second property for investment purposes, it’s essential to get a rental estimate for your second property before you make your purchase.

      If you are just in the research stage, having a rough estimate of rental income will help with setting your budget and understanding your cash flow (see point 2), but if you have chosen ‘the’ property to buy, most lenders will require a rental estimate letter from the real estate agent currently handling the property at the application stage.

      Lenders will factor in any possible rental income (if applicable) when determining your borrowing capacity, ensuring it is set at a safe limit – reducing your risk and theirs!

      When choosing a property for rental income, it’s important that the property is well located and will be easily tenanted so that it continues to generate income and support itself.

    4. Loan type & loan structure
      Interest rates have been very low for some time, which makes it a great time to consider buying a second property. And right now there are literally thousands of home loan options out there for you to consider. However, there are many variables to take into account when financing your second property purchase – so it’s a good idea to give us a call. Finding the right home loan product for your financing needs depends entirely on your current financial position and your short and long term goals. This is why the right advice is imperative when taking on a higher amount of debt across two different properties. It is best to speak to us about these options and the best way to structure your finances, before you even choose a property to buy, so you don’t get stung later on in the process. A few scenarios we could discuss include:

      Using your existing equity
      If you’ve lived in your first home for some time, there’s a good chance you have grown your equity. Equity is the difference between what your home is worth and how much you owe on it. For example, if your home is worth $550,000 and you owe $200,000 then you have $350,000 in equity.

      Tapping into this equity could give you a larger deposit for your second property purchase, which could be beneficial for your borrowing capacity and your overall budget. If you’re looking to do this, you will need to have your home revalued. In order to determine how much equity you have in your home, a lender will perform a valuation using an independent valuer before determining how much you can borrow and approving your loan.

Refinancing or staying with your current mortgage lender
Buying a second property offers the perfect opportunity to give your existing mortgage a health check. Use the opportunity to consider your home loan needs in relation to your future goals and ask yourself how well your current loan is performing for you. If you’re satisfied with the service your lender is providing and you have determined that the interest rate and fees you’re paying are competitive, there may be no need to refinance to another lender. However, there are some record low rates on offer at the moment and if you have had your mortgage for some time, it would be worth talking to us about what other home loan products are suitable for you and your goals.

Buying your second property is by no means a small task. We are here to help you with your financial goals, so please chat to us about how we can structure your loan so your second property purchase can really set you up for the future.What you need to consider when buying your second property


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