Australians are a nation of investors. Over 60% of us hold additional investments outside of compulsory superannuation and increasingly, property is one of our most popular investment choices. But why? And is it the right form of investment for you?

If you’re not sure, the sooner you talk to a qualified Financial Planner the better! And if you don’t have one, ask us for a referral to a reliable professional who can help you come up with an investment plan that’s right for your personal circumstances and goals. To get you started, here are six reasons why an ever increasing number of Australians are considering a property investment.

1. Supply & demand.

The value of any given commodity is subject to the law of supply and demand. When demand is greater than supply, the value goes up. Therefore, investing in something people need or really want is generally considered a good idea. Everyone needs somewhere to live, and most of us want to own our own home, which is why many Australians consider property to be a good investment type.

It may seem a bit over-simplistic, but the statistics tend to support this popular opinion. For example, 2016 figures from the Victorian Department of Environment, Land, Water and Planning estimated that Melbourne’s population will double by 2031 and hit 10 million people by 2050.

2. You have greater control over managing your investment.

When you invest in a property, you are in charge of that asset. You can do things to affect the property’s ongoing capital growth potential, like keeping it in good repair and up to date, and you can choose the right tenants to maximise your rental income. You may also have some potential to affect the end value of the asset – by getting it rezoned for development purposes, or performing extensions or renovations, for example. You can also take out insurance on the asset, which can help to insulate you against some of the financial risks of property ownership.

By comparison, with stocks and shares, value growth is subject to the success of the company and a variety of other external factors which are usually beyond your control. These uncertainties may influence some people to prefer a ‘solid’ asset like bricks and mortar.

3. You can easily assess capital growth potential and invest accordingly.

When investing in property, careful research will help you to choose a suburb or area that has capital growth and rental income potential. This information is relatively easy for the average person to acquire. (For example, we can provide you with a variety of reliable reports, as will most banks, and there is a variety of other property data suppliers online.) By contrast, assessing the capital growth potential of other kinds of assets is much more complex and often requires expert analysis, or access to information that isn’t as easy to obtain.

With property, some areas have more potential than others, so smart investors spend time locating and investigating opportunities that could align with their investment strategy. For example, you can research future population and employment growth in an area, transportation links and future infrastructure development, lifestyle amenities, schools and other factors that are likely to make the area popular with buyers and tenants down the track.

4. You can access the equity to continue growing your wealth.

Property investment can be like an “investment money tree” because it is possible to access the equity (or capital gains) as you go along by refinancing, without being liable to pay tax until you actually sell the property. With an investment property, equity is created as soon as it increases in value or your tenants pay down your mortgage somewhat, so you can often plan to access your equity (subject to refinance approval from a lender) for your next investment. You could use that money to buy any kind of investment, not just property, which is why property is often considered a good way to start an investment portfolio. If you’re interested in refinancing a property to access your equity, just give us a call.

5. The opportunity to diversify your portfolio.

When investing, a good Financial Planner will probably tell you that it pays not to keep all of your eggs in one basket. Including property in your investment portfolio could potentially provide an opportunity to spread your risk. And in itself, property investment provides opportunities to diversify your investments. For example, you could invest in a variety of locations and in different types of properties – vacant land, apartments, units, houses, rural or perhaps commercial properties. Talk to your Financial Planner for suggestions on how to create a diversified investment portfolio that takes your personal appetite for risk into consideration.

6. You can take advantage of tax breaks and super.

Another advantage of property investment is that it is supported by a variety of tax breaks and government incentives to help people grow wealth. There are many different ways you could potentially benefit, depending on your personal situation, tax obligations and other financial circumstances. Talking to your Mortgage Broker and Tax Accountant to find out more is a great idea, because the benefits are different for everyone and no-one wants to give their money to the tax man when they could be using it to fund a better retirement.

What to invest in is an age-old debate and property investment may not be the right choice for everyone. But if you’re keen to join around 1.7 million Australians who choose to invest in property, we’re here to help! We’re happy to work with you, your Financial Planner and your Accountant, and then arrange the appropriate financing to meet your financial circumstances, needs and investment goals. Please get in touch, we’d love to hear from you!

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. All loans are subject to lenders terms and conditions – fees, charges and eligibility criteria apply.6 Reasons why property investment is more popular than ever

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?

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As Sex and the City’s Carrie Bradshaw could tell you, there are many perks to apartment living, which makes them a fantastic investment option.

They offer people the ability to live close to work and exciting entertainment hubs, where many a social drink can be had within walking distance of home. After all, who wants to live out in the burbs when you can be in the heart of the action? Sure, you might not have your own patch of dirt to toil over, but unless you’re over the age of 60, gardening is overrated.

Indeed, apartments offer attractive rental yields and an entry point into the market in locations that might otherwise be unaffordable for investors. Last May, CoreLogic anticipated there would be 231,129 new units set for completion across the combined capital cities by April 2018. And with such a large supply of apartments, price drops seem likely, so you may very well be able afford your own version of Carrie and Big’s “heaven on 5th”. Here are some tips for choosing the right investment apartment, and when you do, we would love to help you find the right loan!

Location, location, location!

Location is king when choosing an investment apartment – nobody wants to live in a box in the boonies! Proximity to amenities such as public transport, healthcare, recreational facilities, childcare and schools will impact on the rental appeal of your investment and the rent you can get away with charging tenants. Apartments and units with great tenant appeal also tend to experience more reliable capital growth, so choosing the right apartment can help you profit both ways.

Do your homework

Knowledge is power! We recommend you thoroughly research an area before buying. Consider supply and demand for apartment living in the area and find out what are other apartments are renting and selling for. That way, you’ll have a sound understanding of what a given property is worth and the potential rental yield.

Consider your future tenants

Think about who your future tenants might be and what they are looking for in a home. Will they be like Carrie, and require a massive built-in wardrobe to house their Imelda Marcos-style shoe collection? Perhaps features like a parking spot in the CBD may be in particularly high demand. If you can anticipate your tenants’ needs, your apartment is more likely to be highly sought after.

Consider the ongoing fees

As Samantha would say, sky-high strata fees are “painful and unnecessary”. Before buying, calculate your net rental yield to estimate your likely return, factoring in the strata fees, interest repayments, insurance, taxes, rates and water charges. Lastly, before you sign on the dotted line, don’t forget to organise a strata inspection report, which will raise any red flags about the accounts and records of the property.

When you do find an investment apartment that ticks all your boxes, we can help you find you a home loan that fits like a glove. As your mortgage broker, we’ll help you get a competitive rate from one of Australia’s leading lenders and structure your investment property loan so that you get the most out of it – now and in the future. Happy apartment hunting!

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As we head into the Easter long weekend, activity in the national housing market continues to ramp up. Home prices in Australia’s biggest cities have jumped 3.7 per cent since the start of the year and Melbourne and Sydney continue to lead the way, with strong property price growth and high auction clearance rates.

Last month saw notable growth in home values in Darwin and Hobart, and while we continue to see a two-speed market across the country, there are some great investment opportunities out there.

Interest Rate News

This month, the Reserve Bank of Australia (RBA) decided to keep the official cash rate on hold again at 1.5 per cent. The decision follows an announcement by the Australian Prudential Regulation Authority on Friday 31 March that financial institutions restrict new interest-only property lending to 30 per cent of their total residential mortgage lending, in a bid to manage heightened risks in the property market.

Many lenders adjusted rates outside of RBA movements this month and raised rates on both owner-occupier and investment loans. They increased rates on both variable and fixed-rate products. That makes it more important than ever to stay on top of your home loan interest rate. Check in with us and we’ll compare hundreds of different home loan products to find the right one for you.

Property Market News

Bidders are continuing to snap up properties at auction, with high clearance rates last week in Victoria, NSW, South Australia and the ACT. For the week ending April 2, Victoria had 1231 auctions, with a clearance rate of 80 per cent, while NSW held 1284 auctions, with a clearance rate of 78 per cent. South Australia and the ACT both had clearance rates of 76 per cent, while things were quieter on the auction front elsewhere.

In March, home values increased in all capital cities, with the biggest percentage changes month-on-month in Darwin (3.07%) and Hobart (3.06%). Darwin’s year-on-year home values dropped 4.41%, while Hobart’s increased 10.24%. Melbourne home values increased 1.92% month-on-month and 15.93% annually, while Sydney’s home values were up 1.41% month-on-month, and a massive 18.88% year-on-year.

Meanwhile, the proportion of total housing finance commitments to owner-occupier first home buyers is at an historic low. Talk to us to see how you can take advantage of recent improvements to the First Home Buyer Grant to get into the market sooner.

With interest rates remaining low, now is a great time to buy your first home, invest or consider refinancing. We’ll find you the right home loan to suit your personal needs and goals, potentially saving you thousands in the long-run. Call us today!

Whether you are buying your first home, your next home, refinancing, investing, purchasing assets or commercial property, entering the property market is exciting.

However, it can also be daunting, with so many elements at play and your life savings on the line. Now more than ever, borrowers are relying on the professional expertise of mortgage and finance brokers to help them navigate through the home loan application and settlement process.

A recent survey by Deloitte of more than 1000 Aussies who took out a home loan in the past two years found customers who used mortgage brokers were more satisfied with their experience than direct-to-lender customers. In fact, some 32% of broker customers rated their experience of using a broker a 9 or 10 out of 10 (with 10 being ‘exceeding expectations’), compared to only 20% of direct-to-lender customers giving such a ranking.

More than 53% of all home loans are now being originated by brokers and this figure is on the rise. It’s clear that using the services of a mortgage and finance professional is increasing in popularity amongst consumers. But why? What are the benefits of using a mortgage broker?

It’s that personal touch

The number one reason why you should use a mortgage broker is because we have your best interests at heart and will help you find the right product for you. A lender, on the other hand, is only interested in selling their own products and does not know whether there might be better options for you with a different provider. As your mortgage broker, we can offer you invaluable support and be with you each step of the way, from pre-approval right through to settlement and beyond.

We save you time and money

Finding the right home loan to suit your personal needs, financial circumstances and goals can potentially save you thousands of dollars in the long-run. Only a mortgage broker will take the time to research which home loan products will marry up best with your objectives. Deciding what types of features you would like attached to your home loan can be tricky, and you don’t want to end up paying for add-ons you don’t need. Whether you require a mortgage with all the bells and whistles, like redraw facilities and offset accounts, or something straightforward, a broker will structure your loan accordingly. Moreover, we keep abreast of the latest deals, and know the merits and requirements of each individual lender, so that you can feel confident about the suitability of the home loan you are using.

We do all the grunt work

Mortgage brokers undertake the tedious process of comparing hundreds of home loans on your behalf, taking on one of the most unpleasant tasks in the home loan process. Loan product comparisons can be very confusing to the average home buyer and loan comparison websites don’t explain the features and benefits of a loan and how you can use them to your advantage.

Because we already understand the intricacies of all of the products on offer, we take away the complexity and simplify the application process. That means you can spend your time focusing on the fun stuff, like choosing your dream home! We offer expert advice about all aspects of purchasing your home or investment property and can tailor a home loan to your exact needs and financial aspirations.

You don’t know what you don’t know

There may be much more you can do with your money than you imagine. Nowadays, many mortgage brokers have diversified their offerings to include more than just home loans. Mortgage brokers are experts about credit and finance and can help you be smart about your financial decisions. We can provide expert advice about your borrowing capacity, how to use property to build your wealth in the long-run, and how to make the most of your income and assets. You’ll find our support invaluable, whether you need advice about finance for a renovation, building wealth through property in your self-managed super fund, consolidating debt, accessing a commercial property loan and more.

The icing on the cake is that we don’t charge anything for our services – the lenders pay us a commission. The commission amount is about the same across all lenders and home loan products, so you can rest assured we are not biased towards one provider. To find out more about how we can help you, or to chat with us about your finance and home loan options, please call us today.


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