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Are you in the market for your first home? Perhaps you’ve been dreaming the classic home buyer’s dream of a little house with a garden and a white picket fence? If this sounds like you, then you may have found that your property searches in 2015 were unrewarding – with the property market running hot and stiff competition for every opportunity.

Could it be time to revise your vision and start thinking about buying an apartment instead? A higher level of availability could make a trendy little apartment a great first step onto the property ladder! Whilst it may not be your first choice of property, an apartment could be a good way to get started and it could prove to be much more affordable for many first home buyers in 2016.

Why buy an apartment?

Depending on the size and location, apartments do tend to be less expensive than houses and this often means they make better entry level properties. Because they cost less, you will require a smaller deposit to get onto the property ladder. In the case of a new build apartment, you may be able to purchase off the plan and this could potentially save you money on stamp duty as well.

Generally speaking, maintenance costs are usually less on an apartment than on a house, simply because there is less to maintain. This can be a distinct advantage when buying your first home on a tight budget. This is particularly true if you buy a newly built apartment where all of the appliances, fixtures and fittings are brand new.

Additionally, many analysts believe that there may potentially be an oversupply of newly built apartments in many capital cities both now and over the next two years. This may have the effect of keeping prices down, making apartment and unit properties even more affordable.

A constant supply of new apartments may also restrict price growth on older, more established apartments. This may give you the opportunity to get a bargain buy and add value by renovating.

What to look for in an apartment purchase

Location. If you want to make sure that your apartment will appreciate in value whilst you own it, you should try to buy one in a location that will be popular with everyone and not just yourself. Look for a location that is close to public transport, cafes, restaurants, shopping and lifestyle amenities.

Before you consider buying a property in an outer suburb or a rural location, have a chat with us about the potential for rental and capital growth. An inner city or suburban location is usually more popular with first home buyers, but if you find an opportunity you can afford in an outer lying area, it is a good idea to do some careful research to help you make a wise decision.

Boutique. It is often true that apartments in smaller, boutique developments tend to be more attractive to renters than really large apartment block developments. Unless the apartment is really great – with an excellent facilities, location and local amenities, you may like to choose an apartment in a smaller development if you can. Of course, budget is a major factor but if you have the choice, go for a smaller apartment in a boutique development over a larger apartment in a really big block.

Parking. Off-street parking can be very important to some property buyers, so try to buy an apartment that comes with its own designated parking space if you can. If you can get one with a lock-up garage as well, then that’s even better! If you find an apartment you like that doesn’t have parking, carefully consider the availability of parking in the area and nearby the block.

Size. Apartments come in all shapes and sizes, but many first home buyers will be looking at one-bedroom apartments. If this is the case, look for one that is larger than 50sqm internally as some lenders may not want to finance an apartment that is smaller than this.

If your budget will stretch to a two-bedroom apartment, then go for it. You may be able to rent out the extra space to help pay off your home loan – which could be a bonus.

Easy lift access. Apartment buildings that do not have a lift and require you to walk upstairs to reach your apartment can be very inconvenient. New build apartments usually have lifts, but consider carefully before you buy an upper floor apartment that doesn’t have one!

Balcony. People like to be able to get outside when they’re at home, so look for an apartment with a balcony or private outside area if you can. Even a small outside area will make your apartment more attractive to potential buyers down the track and this may have a positive effect on your resale value.

Views. Apartments with nice views, or at least a sunny outlook tend to be the better buy. If you are buying off the plan, take particular care to consider what the outlook will be. If there are plans to build another apartment block right next door, you may find yourself with limited sunlight or a view of your neighbour’s bathroom if you’re not careful.

Do your research and get pre-approval on your financing

As with any property purchase, it is really important to do your research before you put down your deposit. Try to find out if there are a lot of new apartment developments planned nearby in the future as this will affect the value of the apartment and may limit capital growth. If you are buying off the plan, it is particularly important that you get a professional independent valuation on what the value of the apartment will be when it is finished.

Before you put down your deposit on any property – particularly if you will be buying off the plan, please talk to us about the financing to make sure it will be possible to arrange the amount you need to complete the purchase. Remember, having 10% of the purchase price for a deposit does not necessarily mean that a lender will automatically let you borrow the rest!

We’re here to help you work out your financial position and get pre-approval on your loan so that you can search for your first home with confidence. Even if you’re some time away from having your deposit ready, it could pay to chat with us about your plans – we may even be able to help you get there sooner. Please get in touch on the details below.

Rates on hold – but for how long? If you are thinking about fixing your home loan rate, call us today. Element Finance guarantee to beat any advertised 1-5 year fixed interest rate from ANZ Australia, NAB, Westpac & St.George Bank. Probably most others too! This is a limited opportunity so get in touch now to see just how easy it is to save. Element Finance has em covered.

Are you an experienced accountant that regularly works with property investors? We need to hear from you if you are comfortable discussing and assisting clients with some of the following:
Taxation returns for investment property holders
Debt minimisation strategies
Asset protection via trusts and other vehicles
Tax planning
Assisting with record keeping
Craft beer

Element Finance are keen to establish a reciprocal referral relationship with a reliable and knowledgeable accountant. If you want to hear from a lot more investors and would also like to have confidence your clients’ finance is always done right, get in touch now, we need to talk.

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Now that the hot weather is well and truly here, wouldn’t it be marvellous to have your own swimming pool in the back yard? Not only are they a great way to keep cool in summer, they make great entertainment for the kids and can be a stylish addition to your home. However, as a home owner, there’s more to consider than just keeping cool and having fun. Below are some questions to think about before taking the ‘plunge’.

Why do you want a swimming pool?

It’s true that adding a swimming pool to your home may be considered an investment – but is it an investment in your lifestyle or your future? You may consider adding a swimming pool to your home for the benefit of family and friends, to make it more attractive to renters, to increase your home’s value, or to make it easier to sell.

Whatever your primary motivation may be, most home owners will be concerned about adding value to the property, as your home is likely to be one of the biggest investments you’ll ever make. We therefore recommend that you seek professional advice before going ahead with your swimming pool plans, just to make sure you don’t overcapitalise or buy a pool that isn’t right for your property.

Who is the target market for your home?

Many people love swimming pools and homes that have them can be very attractive to families with older children – so if they are your target market you may want to go ahead with your backyard oasis plans. Pools are also a great idea for investment properties that are rented out as holiday homes, as people may look for a pool when making their selection for a place to visit in their time off.

Busy professionals and property investors, however, may prefer a property without a swimming pool. This kind of purchaser tends to look for a property that requires as little maintenance as possible. Tenants have been known to neglect home maintenance and may not be prepared to take the time and trouble to keep a pool sparkling clean – so if tenanting the property will be the eventual goal, a pool may not be a good idea.

Are pools popular in your location?

Another factor to consider is the location of your home. For example, if your property is in an area that is already popular with families – close to good schools, universities, sporting facilities and other amenities that families require – then a pool could make your home even more attractive.

Outer suburban properties that are in a hot weather location and are some distance from the beach may also benefit greatly by the addition of a swimming pool. If adding a pool will also add a measure of convenience, then so much the better!

Another thing to consider about the location is your local climate. A swimming pool in a place that is prone to very hot weather will get a lot of use. But if the property is in a location that has a cooler climate, then adding a swimming pool may not make good sense.

Will it add more value than it costs?

The answer to this question will differ in every case and has much to do with the pool you choose and how well it integrates with your existing property. As with any home improvement or renovation, it is important not to overcapitalise – if you spend too much money, you may not get back the cost of your renovation when you sell.

Pools come in a huge variety of shapes, sizes and price points. The trick is to choose the one that will suit your particular home and budget. To help you to determine how much you should spend, you could do some research to compare the values of homes in your area with and without a swimming pool. This will help you to create a realistic budget and avoid spending too much money.

Local real estate agents may also be a good source of information. You can show them your plans and ask them to give you an opinion on the value of your home before and after the pool is installed so you can see if you’ve got the budget right. They’ll be able to tell you whether adding a swimming pool is a good idea or not, according to what their buyers want and also give you an opinion on the style of pool you should choose to make sure it does not detract from the value of your home.

Would other renovations add more value than a pool?

If your primary concern is adding value to your home, then you may want to consider whether other renovations would add more value than a swimming pool. Does your home need a new kitchen? Have you considered adding another bedroom or a second bathroom for example? Is the home fitted with up-to-date, energy efficient appliances? These kind of improvements may be more important than adding a swimming pool in terms of value.

If you want to add a swimming pool to your home, or would like to make other renovations to facilitate your lifestyle or add value, then we’d love to help. There are several different ways to arrange the finance and we can help you to decide which one is the right option for your particular financial circumstances and goals, then help you to get it all set up. We can also provide you with referrals to other professionals you may need for advice. We’re here to help you with all your property plans and dreams, so please give us a call today.

 

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2015 was a fantastic year for property in Australia. Our major property markets saw some significant capital gains and many property sellers made a good profit. There were also record numbers of auctions around the country – but competition was fierce and if you were looking to buy, securing the property you wanted wasn’t always easy.

2016 promises to be another competitive year for property purchases, so if you want to get in on the action, you’ll need to be on top of your game. If your New Year resolution is to buy a property this year, here are some things you could do to help you succeed.

1. Identify a goal

It’s very easy to make a New Year resolution, but most of us do this every year and very seldom stick to it. That’s because a New Year resolution needs to be very specific if you want to achieve anything.

Having a vague resolution such as “Buy a property” isn’t going to get you over the line. You need a more specific goal like “Buy a 3 bedroom house near X before June 30” or “secure an investment apartment in X before Y”. Adding a sense of urgency to your goal will motivate you to keep on top of what you need to do to make a successful purchase. Below we talk about some of the steps you will need to undertake to reach your goal – you may find that it will help to schedule these activities in your diary so that you don’t put them off.

2. Be ready to act

Procrastination is the enemy of success. There are often thousands of properties on the market and if you don’t know where you want to buy or what type of property you’re searching for, you’ll find yourself procrastinating about which properties to view.

The answer is to sit down, make some decisions and then do your research. If you are buying a property as your own home, you can consider which suburbs will be convenient for you in terms of work, whether you need to be near public transport, whether you need an apartment or a house. If you are looking for a property investment, you’ll need to consider properties that meet your investment strategy, have good capital growth potential and are easy to tenant.

3. Set a realistic savings budget

Good money habits are very important if you’re planning to get a home loan this year. Lenders don’t just look at how much of a deposit you have, they assess your ability to save and make repayments.

Taking on a home loan is a big financial commitment and you will also have the added expense of maintaining your property, paying rates, insurance and other expenses on top of your mortgage so you will need to demonstrate that you have your budget under control and are a good saver.

To set a monthly savings target, you could start by making a list of your expenses. It’s important that you are realistic and make a comprehensive list, so that you understand where your money is going and where you can cut back if necessary when you get a home loan.

4. Get your financing in place

We suggest you talk with us about getting pre-approval on your home loan before you start looking at properties you might like to buy. Establishing a price limit for your purchase is key.

We will help you to fully understand your financial position and help you to determine how much you can borrow and as a result, what kind of property you can afford to buy. Setting a realistic savings budget first (as mentioned in point 2 above) is an important part of this process.

It’s a good idea to make talking to us a priority, as it could make all the difference to your success. If you know exactly what you can afford, you will save yourself hours of time looking at property listings and save days making inspections on homes.

5. Get a professional team on your side

Let’s face it, buying a property isn’t easy. Having a professional team on your side could make all the difference to your success. You’ve started out by getting a professional mortgage broker (well done), but you may also need help from other professionals as well (and in many cases, we can help you by providing a referral).

Buyer’s Agent: If you are short of time, you may want to consider engaging a reputable Buyer’s Agent. They can do a lot of the leg work in locating you suitable properties to view and make a big difference when it comes time to buy.

Real Estate Agents: If you don’t want to go with a Buyer’s Agent, you may like to get in touch with reputable real estate agents in the areas you want to buy.

Conveyancer: When you locate the property you want to buy, it will pay to have a Conveyancer or Property Solicitor lined up so that you can move quickly.

Inspectors: When you locate a property you want to purchase, you’ll need to get building and pest inspections done before the auction date. Line up your inspectors beforehand and you’ll save yourself a lot of time and hassle in locating them when you need them.

Remember, we’re here to help you keep your New Year resolution to buy a property in 2016! It won’t be easy, but we’re sure you’ll find it’s worth the effort. We’re ready to help you assess your financial position, and help you get pre-approval on your home loan so that you can start the process of locating an opportunity and making a purchase. Give us a call today and let us help you get started.


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