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

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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