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.

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

You know when you decide to go on holidays and you start researching all of the fun things you’re in store for?

The excitement begins to consume you. You may find yourself sneakily looking up extreme adventure activities when you’re meant to be working, Googling accommodation options on your commute home or browsing Instagram travel photos at midnight. Well, buying property requires that same level of enthusiasm and commitment towards research – after all, it is an adventure you’ll never forget. And guess what – the eventual purchase will feel even better than the holiday. In this article, we’ve put together your essential property research checklist so you have the perfect home adventure!

Research your borrowing power

For this first point, you don’t actually have to do too much. All that’s required of you is to pick up the phone and chat with us! As your mortgage broker, we’ll determine your borrowing power and give you a clear understanding of how much you can realistically afford to spend. We’ll ask you about your income, expenses and get to know you financially, so we can give you an accurate indication of your borrowing power and ensure you’re looking in the right price range from the very start.

Research the suburb

Now that you’ve got an idea of how much you can borrow, it’s time to start researching where to buy. Whether you’re a homebuyer or an investor, the aim is to purchase in a suburb with solid capital growth potential, and to buy at the early stages of an upturn, not at the peak of a growth cycle.

There are plenty of great online resources to access market reports on specific areas. These contain details about everything from median prices and growth rates to rental yields and demographic trends. RP Data CoreLogic, realestate.com.au, Residex and domain.com.au are just a few examples, and you can also ask us for a property report.

It’s a good idea to consider the average rental yield of the area and of a particular property. The rental yield is the rental income expressed as a percentage of the property’s value. If there is strong demand in an area, the rental yields may be higher, but if there is a high vacancy rate, the rental yields may stagnate or decline.

Research the property

During inspections, you should go through the property with a fine-toothed comb. Inside the property, check the ceilings for water stains and the cornices for waviness, which may indicate water leaks in the roof. If the property is carpeted and you want to pull it up, find out whether there’s cement or floorboards underneath. As you stroll through the property, be mindful about the evenness of the floor. Before you buy, it’s always a good idea to get building and pest inspections. The peace of mind of knowing your property won’t collapse or be eaten up by termites is worth the fees.

Outside, look at the condition of the gutters, check for cracks in the brickwork and for mildew in the eaves, which may indicate issues with run-off. Keep an eye out for cracks in the driveway, which may mean there’s a lot of ground movement on the property.

Research the price

The best way to research the price you may end up paying is to compare other recent sales prices for similar properties in the same location. You can find recent sales via websites like realestate.com.au. Make sure the land size is similar and the condition of the property is comparable. Regularly attending inspections will also help you to formulate a clearer picture of the going rate for similar properties. Lastly, it’s important to research additional ongoing costs such as the council rates, strata fees, and water costs. Most of these outgoings should be included in the contract of sale.

Research the professionals you’ll need

During the buying process, you’ll need professional support you can depend on, including us as your mortgage broker, a solicitor, and building and pest inspectors. When researching who to use, it’s a good idea to ask friends and family for recommendations. Also, check each service provider’s online reviews. And if you do need a referral to a professional we can vouch for, please don’t hesitate to ask!

We can’t stress enough the importance of doing plenty of research before buying property, but we guarantee the effort will be well worth it in the long-run. You may even find it becomes as addictive as planning a holiday! And remember, we are here to help you with everything from calculating your borrowing capacity, to organising pre-approval and finding you a home loan that works. Please get in touch.Property Research Checklist

Out with the old and in with the new! What better way to start 2017 than with a make-over for your most valuable asset?

Whether you’re ready for a complete home renovation or simply want to bring your house up-to-date with a few cosmetic changes, you’ll want to get on top of the latest trends so you can make some wise choices on where to invest your budget. Here are 7 top renovation and décor ideas that could help you make sure your money is well spent.

  1. Get eco-friendly.
    People want more sustainable homes and as eco-friendly renovations genuinely help to make older homes more sustainable, they’re on trend in 2017. Essential considerations are sustainably produced ceiling and wall insulation, the general use of sustainable building materials, built-in waste management systems, rainwater tanks and water recycling systems, solar energy panels, green walls and leafy facades. Roof gardens and passive design elements that provide natural light and reduce heating and cooling costs are also popular. You probably won’t want to go as far as foregoing the dishwasher or air conditioner entirely, but you should invest in energy saving appliances wherever possible.
  2. Create more space and make it more interesting.
    More spacious homes (or homes that appear to be more spacious) are ever popular with home buyers today, so renovations that include extending or adding extra rooms to your home are still great ways to add value in 2017. However, rather than just focusing on knocking all the smaller rooms into one big open plan communal space, the new trend is to also provide options for privacy, with spaces that offer interesting nooks and crannies where people can escape with their personal technological devices and do their own thing.

    Roof rooms and attic renovations are going to be popular in 2017, because they provide opportunities to add a point of interest and difference. The open, spacious look is still the fashion, however finding ways to add character and uniqueness are trendy too.

  3. More efficient storage spaces.
    Investing in upgrading your laundry to create and maximise storage space was a very popular option for home renovations last year, and this is all set to continue into 2017. Maximising your storage areas means you can keep all of your untidy clutter out of sight, which will make your home appear much more spacious and help you keep the look up-to-date, with clean crisp lines. Adding clever storage that utilises any dead space in your home is an easy way to add value, particularly important if your property is a family home.
  4. Terracotta Tiles.
    If you’ve been around long enough to have survived the ‘80’s, you may be very surprised to learn that terracotta is back in fashion for home renovations in 2017. Interior trends are now moving away from the cool tones that have been popular for the last decade and designers are returning to warm colours and natural materials that add character.

    Today’s fashion in terracotta calls for a smooth matte finish with crisp edges and a more finished look. The idea is to add warmth and depth with natural colours and materials, so consider using your terracotta tiles on feature walls or for cladding fireplaces.

  5. Darker Wood Tones.
    If you are tired of the blonde wood look of the world’s recent ‘Scandi’ obsession, you’ll be happy to know that darker wood tones are finally back for homes in 2017. Remembering the current trend is for warm, natural materials that add character, you can now go ahead and use darker wood and natural timbers as feature walls and flooring. Consider adding texture by using it in herringbone tiling on floors, or by choosing interesting darker wood furniture pieces as focal items.
  6. Go natural in the bathroom.
    Updating the kitchen and bathroom in your home is one of the tried and tested ways of adding value and is one of the main motivations for choosing to renovate for many home owners. Bathroom makeovers in 2017 will also follow the new interior design trend that combines modern, clean lines with natural materials and organic warmth. Functionality is also an important consideration to home buyers today, so try and choose materials that are easy to clean and maintain to generate the most value.

    Remember that sinks and baths with classic, elegant, clean lines are always timeless favourites. Add that natural touch by using wood in warm tones for accents and furniture or accessories. Don’t forget the terracotta in the bathroom too – add some extra organic depth with a fern in a terracotta pot or consider a small terracotta sculpture.

  7. Create more curb appeal.
    A garden makeover that creates more curb appeal for your home is still one of the best investments you can make in terms of adding value this year. Garden design is now moving away from that harsh, minimalistic look that has been popular of late and following the new interior design trend of a warmer, more welcoming look that incorporates natural materials.

    Create a more natural style by staying away from geometric design layouts. You can achieve a more authentic, organic feeling in your garden by using recycled materials, free-form decks, stepping stones or meandering pebble paths. Locally sourced is the buzz word of the year, with native plants and shrubs planted in abundance adding charm.

Talk to us about renovation finance and budgeting.

Over capitalising is one of the greatest dangers when making home renovations, so be careful to set a practical budget and resist the temptation to splurge on too many designer or big brand items. They may make you feel good about what you’ve created, but they won’t add more value and you risk losing money if you decide to sell. If you need help working out how much money you can afford to invest in your renovation project, please give us a call and we’ll be happy to help.

Once you’ve set a practical budget, forward planning for how you intend to finance your renovation project is also a wise idea. Depending on how much you plan to spend, there are a variety of finance options that you can choose from, so talk to us before you start your renovation project so we can help you get it organised. Financing your renovations could mean refinancing your home loan to access some of the equity, taking out a line of credit, or perhaps a personal loan. To find out which option is the right one for you, just give us a call for a chat today.

With another Christmas celebrated and already showing up on our waistlines, a common topic of conversation for many of us in January is our New Year resolutions.

Whether it’s a pledge to give up smoking, get to the gym more often, or start (yet another) healthy eating regime, New Year resolutions usually have a self-improvement or healthy living focus. But what about your finances? A healthy financial situation is just as important to your well-being as a healthy diet and exercise regime. Here are a few New Year resolution suggestions for your finances that could make a big difference to your financial health in 2017 and beyond. If one of these appeals to you, please give us a call as we’d love to help you achieve your financial New Year resolutions this year.

“I will make a proper budget and stick to it.”

Did your credit card debt go up or down in 2016? Spending more than you earn is surprisingly easy to do and having to pay exorbitant credit card interest on all of your purchases just makes matters worse. The secret to turning this situation around is to create a proper budget for yourself and stick to it. It’s also a good idea to include repayments on your credit card as a weekly expense in your budget outgoings, so you can work on getting your debts paid off as well.

To create a realistic budget, list all of the things you need to spend money on and how much they cost. The amount you have left over each week is the amount you can afford to spend on the things you want, put into your savings account, or use to pay off your debts sooner. It’s also important to review your budget regularly to see how you are tracking.

If you have multiple credit card debts, or a variety of debts, you may find managing your budget a challenge as a large part of your income may be lost on interest payments. This kind of situation is frequently referred to as a ‘debt trap’. Talk to us about consolidating your debts to reduce your interest payments and make your financial situation more manageable.

 “I will make an effort to achieve my saving goals.”

The ability to save money consistently is a talent that everyone should cultivate. It’s particularly important if you’re saving a deposit for your first home, as a lender will take your savings history into consideration when deciding if you are eligible for a home loan.

If you are the kind of person who finds it hard to stick to a budget, can’t resist impulse purchases, or indulges in ‘retail therapy’, then you may like to consider installing an app on your mobile phone that supports your efforts to save. ASIC’s MoneySmart website offers a variety of excellent free apps designed to help you manage your finances:

  • TrackMyGOALS integrates techniques that are proven to work for successful savers.
  • TrackMySPEND helps you see where your money is really going so you can adjust your spending habits to save more. Even just committing to reducing the number of take away coffees you buy each week can make a big difference over a full year!

“I will stop wasting my money on rent.”

For many people, choosing to rent a property instead of buying one boils down to a lifestyle choice. It may be more affordable to rent a property in a location where you enjoy living, than it is to buy one. But the consequence of this choice is that when property prices rise, you are potentially missing out on some significant capital gains that could be important to your financial well-being later on in life.

What’s more, the money you spend on rent is wasted – you are potentially paying off someone else’s investment when you could be paying off a property of your own. So the question is: do you have enough money for a deposit?

If you have been saving regularly and have some money in the bank, now is a great time to take stock of what kind of property you may be able to afford this year. Just give us a call and we’ll be happy to sit down with you and help you work it out!

Getting on the property ladder may mean that you have to consider a location where you can afford to buy, rather than a location where you prefer to live. It may mean giving up your short commute home from work, or easy access to your friends and family, favourite bars, shopping venues and cinemas. But with property prices rising steadily, the long-term benefits could have a significant impact on your future financial security and retirement lifestyle, so it could be worth it to act now.

“I will review all of my financial accounts, including my home loan”

When was the last time you stopped to think about how much money you are paying on fees every year for your mortgage, bank accounts, credit cards and superannuation plans? Most people would be horrified to discover exactly how much money they lose every year in fees and charges across their financial accounts – so it definitely pays to review them regularly and cancel any unnecessary accounts you hardly ever use and don’t really need.

For example, the fees and charges you pay on your superannuation accounts can be quite high and they often go unnoticed. Over the years, these fees and charges may add up to make a big difference to the balance of your super on retirement. The fact is, if you have more than one superannuation account, you are paying double the fees you need to pay! Consider consolidating all your super accounts into one as soon as you can.

The same rule applies to your credit cards. How many do you really need? What are you using them for? If you have more than one, it may be a good idea to transfer all of the balances to one card using a free balance transfer offer. This not only has the potential to save you a significant amount of money on fees, it could also save you some money on interest and perhaps, help you to pay off your credit card balances sooner. Don’t be tempted to keep all of the old cards though, remember to cancel them as soon as you make the balance transfer.

If you have a mortgage, now is a good time to look at which features and benefits it provides, and if you are using them. Do you really need them? Is your home loan the most suitable for your current financial goals? If not, talk to us so we can see if you could be saving on fees, getting a more favourable interest rate or accessing the loan features you need!

We can help you achieve your financial New Year resolutions

Our role as your mortgage broker is to help you arrange your credit and finance to maximise the money you have. We’re here to help you save on interest wherever possible. Whether it’s time for a home-loan-health check on your existing mortgage, or you would like to find out how much you can afford to spend on buying a property, you’ll find our expertise and support invaluable in helping you to achieve your goals. We are even willing to help you find better ways to manage your debt and plan to build wealth for your future.

Financial success means setting some financial goals and making a step-by-step plan to reach them. With a credit and finance professional on your team, you are much more likely to get where you want to be. If you would like to buy a property in 2017, then we can help you achieve your goal by assisting with everything from setting your purchasing budget and getting pre-approval on your home loan, to supplying you with insightful property market data so you can locate the right home to buy more quickly.

Make sure your New Year is a happy one by talking to us about getting on top of your finances. It is one New Year resolution you’ll find very easy to keep! Call us to make a time today.

 


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