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Buying a property can be a very detailed and complicated process that takes a great deal of effort to complete successfully.

If you have no experience with buying a property, you may find it difficult to know if you have done everything right. The good news is there’s no need to do it on your own. With the right team of business professionals on your side you can make the whole process go a lot more quickly and smoothly, prevent expensive mistakes and maximise the full financial benefits of making your property purchase.

So what kind of professional support might you need? Here are five business professionals that can be worth their weight in gold to every property buyer, whether you’re buying your first home, your next home or a property investment.

Building & Pest Inspector

When you’ve chosen the area that’s right for your property purchase, you should take the time to find a Building & Pest Inspector who knows the area well before you even start your property selection process. When you find a property that you’re interested in buying, having your experienced Building & Pest Inspector lined up will help you to move on it quickly and with the appropriate caution.

The word ‘caution’ is an important word to use here because not every property is as good as it looks to the untrained eye. The rule of thumb when purchasing a property is always to take a good look before you leap. Many unwary home buyers have fallen in love with what they think is the perfect home, only to find out later that it has expensive maintenance issues.

Solicitor / Conveyancer

A solicitor or conveyancer is required to attend to the legal formalities and prepare all of the documents you need to transfer a property into your name and ensure your settlement day goes smoothly. Their role is to be the champion of your legal interests during the purchase process and that’s why choosing a good one is important to your success.

First of all, your solicitor will be invaluable in helping you to understand the terms, conditions and contents of any contract that you will be required to sign. If you are intending to purchase at auction, they can explain the auction rules and conditions. If you are building a new home, or if you are purchasing off the plan from a developer, an experienced solicitor will know what you need to be careful about, what to include in the contract of sale to protect your interests and help to ensure that you end up getting exactly what you are paying for.

Accountant

A good accountant can be a huge bonus when purchasing a property, particularly if you’re a property investor but also if you’re a first home buyer or an owner occupier. That’s because understanding your own financial position is the most important part of the property purchasing process. It helps you determine your buying power, identify and plan for any potential cash-flow difficulties and ensures you understand and can cover all the expenses.

A good accountant who is experienced with property purchases will help you to maximise any tax benefits you may be entitled to receive. If you are planning to invest in property, it is a good idea to consult an accountant about what the tax benefits will be in your particular case and get advice about how to maximise them before you even begin.

Real Estate Agent/s

It’s a great idea to find out who are the best real estate agents servicing your chosen property market. Even though a real estate agent’s primary purpose is to represent a seller in a property transaction, the really good ones will also be willing to lend you their expertise in locating the right property for you – even if they don’t have it on their books right now.

As a buyer, you will not pay a real estate agent for any services they provide to you, as the seller is responsible for paying their fees. However, good real estate agents will want to meet you and keep in touch with you because you may be a prospective buyer for one of their future customer’s properties. They will take the time to discover your needs and take an interest in what kind of property you are looking for, making a note of your approximate price range and when you want to buy. When an appropriate property becomes available, they will contact you to see if you are interested. This can help you stay on top of new properties coming on to the market in the areas that are of interest you.

Mortgage & Finance Broker

There are thousands of home loan products available and finding the one that is exactly the right fit for your personal financial circumstances and goals can be a confusing process. If you approach a bank directly, they will only tell you about their own products. If you go online to do your own research on all the options, you could be there for days and still be in the dark about which finance product is the best one for you.

Some people just pick the loan with the lowest interest rate they can see and never even find out if a different type of loan product could have saved them more money in other ways.

A professional mortgage and finance broker is here to help you sort through all of these aspects of choosing a loan. Our job is to find a loan that is exactly the right fit considering your short and long-term goals, how much you can actually afford to borrow and what you need to get out of your loan in terms of features and benefits.

Consulting a mortgage and finance broker is usually free of charge. We’re even happy to have an informal chat with you if you just want to test the waters about getting a loan. Expert credit advice could make a big difference to your financial well-being both now and in the future – it’s not only about your finance needs right now.

If you need help meeting the right professionals for your property purchasing team, we’ll be happy to provide you with some referrals. As mentioned, we’re also happy to give you whatever information you may need about loan products and their uses. So please feel free to call and chat with us today.

oct-news
Conditions are great for home buyers and borrowers! Are you ready to tackle all the excitement of our very busy Spring property markets?

Last month, the Reserve Bank of Australia (RBA) appointed a new Governor, Dr Philip Lowe. After his very first meeting as the RBA Governor, Dr Lowe announced the RBA would be keeping the official cash rate on hold at 1.50 per cent during October. But everyone was well ahead of Dr Lowe’s announcement after he made comments to the press about the lack of effectiveness of further rate cuts in stimulating economic growth when he was first appointed in September.

The RBA last cut rates in August, bringing the official cash rate to all-time lows. However the cut did not have the desired effect of reducing the level of the Australian dollar against other currencies that the RBA intended. Analysts now appear to be undecided regarding the prospect of further rate cuts this year and the RBA is taking a wait and see attitude before indicating its next move.

Spring is traditionally the busiest time of the year in Australia’s property markets, however Grand Final Weekend slowed the market for the last week of September, particularly in Victoria where there were only 133 scheduled auctions for the week ending October 02. However these auctions did achieve a very high clearance rate of 92%. The NSW market was a bit more active with 628 auctions achieving a clearance rate of 80%.

Elsewhere around the country, the QLD market had a lot of activity with 253 auctions, but the clearance rate was very low at just 36%. SA scheduled 47 auctions with a clearance rate of 75%, ACT had 50 auctions with a clearance rate of 72%, WA had only 15 auctions with a clearance rate of 33%, NT held 14 auctions with a clearance rate of 23% and Tasmania had only 5 auctions with a clearance rate of 25%.

With increased activity in the Spring property market, home values are also on the rise in most markets. Sydney saw a rise in home values of 0.81% for the month of September, Melbourne saw a rise of 2.30%, Brisbane/Gold Coast rose 0.22%, Adelaide rose 2.11%, Canberra 2.38% and in Hobart home values also rose by 0.14%.

In the north and west of the country, home values have been trending downward during the first 10 months of 2016. Darwin’s home values fell by 2.21% and Perth’s by 2.37% during the month of September alone. It should also be noted that rental rates are also showing a downward trend in these markets.

Interest rates are currently at all-time lows and following the RBA rate cut in August, lenders are offering some great deals for all kinds of property buyers. If you’re considering purchasing a property or refinancing an existing home loan, it is a great time to see us to discuss your plans or get loan pre-approval. If also a good time to talk to us if you’ve been considering a switch to a fixed rate product to lock in a low rate for a fixed term. Whatever your financing needs we’d love to help, so please get in touch today.

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Hard selling tactics are used by salespeople in a wide variety of industries, including property and real estate.

They’re designed to get you to make a purchase quickly and deny you the opportunity to evaluate the purchase properly and compare other options.

Hard sell sales tactics often include aggressive or forceful language and usually use strong psychological pressure to convince you to buy. Sometimes it is not immediately obvious that you are being given the hard sell – the salesman will pretend to be your friend and behave as if they are helping you out!

So how do you avoid being pushed into a purchase by a hard selling salesperson? Here are five tips to help you come out on top.

1. Learn to say no.

Saying no is surprisingly difficult for some people. We’re all brought up to be polite and delivering a flat no can seem rude. The hard sell practitioner is fully aware of this and uses your good manners to their advantage to create an opportunity to make their sales pitch. Always be polite, but be firm when saying no or they will continue to pester you until you buy something.

Learning to say no to such people is vitally important. Make the word ‘no’ your default response until you are sure you have all the facts and are in a position to make an informed and considered decision.

2. Beware of people bearing gifts.

Another common tactic, and one that is frequently used by property sellers and developers, is to reinforce your natural tendency to avoid saying no by giving you a ‘free’ gift. They know a gift will make you feel more obligated to say yes because we are all conditioned to reciprocate when given a gift.

For example, time share companies will often offer you a ‘free’ weekend away in return for attending their seminar, then try and pressure you into buying while you’re there. Or a property developer may offer you a ‘free’ furniture voucher to get you to attend an open house, then pressure you into signing a contract on the spot.

Always remember that when you accept a gift that is described as ‘free’, you are placed under absolutely no obligation to make a purchase or return the favour. Say no firmly and take your ‘free’ gift home without feeling guilty about it.

3. Keep your emotions in check.

High pressure sales tactics also take advantage of your negative emotions. They play on feelings such as fear, greed, vanity, guilt, ambition, frustration, anxiety and even loneliness. Gratification of any of these emotions is a strong motivator and makes us very susceptible to impulsive purchasing decisions that we may regret later.

When making any large purchase, it is important to be able to put your emotions aside and think logically and practically. Before you even consider looking at a home or car to purchase, protect the integrity of your decision making process by working out a budget and a buying strategy. Avoid impulse purchases by giving yourself a cooling off period when you can take the time to sit down and calmly consider the pros and cons.

4. See the bigger picture.

When emotions are running high and you’re under pressure to make a decision, it is a good idea to step back and take a wider view of the situation. Resist your impulse to purchase by taking a few deep breaths and asking yourself “What will happen if I don’t make the decision to purchase right now?”

After a few minutes have passed, more sensible considerations will come to the fore. Such as can you afford it? Does it meet your needs? Will it give you the return on your investment that the salesman has promised? Are you paying the right price? Could you get a better price by waiting and negotiating a bit more? These are the bigger picture questions that need to be answered before you make your decision to buy.

5. Do your own research.

Every property developer, real estate agent and car salesman will tell you their deal is fantastic, that buying their product is a ‘no-brainer’. They may even show you data or statistics to back up what they say. Never trust the word of a hard sell salesperson, always verify the facts for yourself. Remember, if it sounds too good to be true, it probably is.

When making any large purchase, particularly a property, the importance of conducting your own thorough research cannot be overstated. It may be time-consuming, but it is not difficult to go online and check you’re paying the right price, how likely it is that the investment will appreciate in value and what are the likely rental yields. If you are buying off the plan, or from a developer, always take the time to verify the value of the property on completion and hire an expert to help you if necessary. Do not take the developer’s word for it.

Remember, the objective of the hard sell salesperson is to make you buy now in order to take away your opportunity to consider things properly and perhaps decide not to make the purchase. The harder the sell, the more reason you have to go away and carefully research their offer.

Talk to a professional finance broker today.

One of the ways unscrupulous salespeople make their money is by selling you expensive finance. No matter how attractive the offer or how insistent the salesperson, you should never sign up for finance on the spot. It is very easy to be distracted by the price of that great car or perfect house and forget to be diligent about your financing deal – this is a major mistake that could end up costing you a lot more than you think.

Finance contracts can often have restrictive terms, unfavourable interest rates and hefty exit fees. Car dealership finance for example, is notorious for failing to take into consideration your complete financial circumstances, so you could end up with financial hardship or may actually find yourself unable to make your car repayments. This could be disastrous for your credit rating and leave you struggling to get any kind of finance in the future.

No matter the urgency, always take the time to talk with a mortgage or finance broker about your finance needs. We will help you to determine exactly how much you can afford to borrow and make sure you obtain the most favourable interest rate and finance product available for you and your needs, taking into consideration your personal financial circumstances and goals. Call us today.

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Saving up the cash for a deposit on a second property can be just as difficult as saving for your first home. So how do property investors manage to get their hands on enough money to build a decent portfolio?

The answer is equity. It’s a hidden source of wealth that grows inside your property purchases over time. Equity is one of the biggest financial benefits of home ownership, a benefit that could allow you to turn your first home into a money tree that helps you finance property investment activities and build wealth for your future.

What is equity exactly?
Your equity is the difference between what your home is worth and what you owe on it. For example, if your property is worth $500,000 and you owe $400,000 then your equity is $100,000.
In order to calculate your equity position properly, you will need to establish the current market value of your home. You can do an estimate yourself by comparing your home to the price of similar homes that have sold in the surrounding area recently. If you would like a more accurate assessment of your home equity, you will need to obtain the services of a professional valuation expert.

How do you access your equity?
Once the equity in your home has increased, it may be possible to access it. Accessing your equity requires making an arrangement with a lender. There are several different ways you can go about accessing your equity. The options that are available to you will depend on your personal financial circumstances and goals, so you should talk with a professional mortgage broker about which method is right for you.

The two most popular options to access equity are to refinance your existing mortgage to extract a lump sum, or to establish a line of credit against the equity in your home. However, it should be noted that a lender will seldom allow you to borrow against all of the equity in your home, particularly if you still have a mortgage. They usually prefer to keep back at least 20% of the equity in your first home as security.

How can you grow your equity faster?
A popular strategy to grow equity quickly is to add value to your property. This can be achieved by renovating or expanding your home. You can often create quite large equity gains with a relatively small capital outlay and the equity increase occurs as soon as you have completed the project. Improving your property also tends to help it to continue to go up in value more readily over time – out dated properties, particularly run down properties, tend to experience less value growth because prospective buyers view them as fix-me-uppers and only want to pay a bargain price.

If your property is on a large block of land, you may even like to consider subdivision as a means of accessing the equity in your home. The subdivided block will acquire a value of its own, which you can borrow against to build. Or you can simply sell the block and access the funds.

What is the equity investment strategy?
When investing in property, time is your friend. Over time, the equity grows in your first property, which you can then use as a deposit to purchase a second property. This will mean that you now have two properties growing in value over time, which has the effect of growing your total equity position twice as fast. After a little more time passes, you can access more equity from the first two properties to invest in a third property, and so on.

Whilst you continue paying the mortgage on your first property yourself, your tenants pay the mortgages on your second property and any further properties you may purchase after that. Both the tenant’s financial contributions and home value growth in the marketplace continue to increase your total equity position. The more properties you own, the more quickly your total equity grows.

Are there any risks?
There are always risks associated with any kind of investment strategy. The danger is that you will borrow too much money and when interest rates go up, your tenant’s rental contributions will not cover your mortgage repayments and you may not be able to cover the difference from your own pocket. If a decline in property prices was to occur at the same time as an interest rate rise, you may find yourself in the position of having to sell off your properties at a considerable loss.

The way to mitigate these risks is to invest conservatively and always get the advice of a professional mortgage broker to help you determine how much you should borrow. They will help you take into consideration what could happen in the worst case scenario and help to make sure you don’t get caught out.

For more information about using the equity in your home to invest, please call us today. We’ll be happy to help you formulate an appropriate strategy that’s right for your personal financial situation and goals and help you to get started by helping you access your equity and by getting you pre-approval on an investment loan.

secret weapon
Investing in property is a big decision that can keep even the most seasoned property investor awake at night. How do you know if you’ve got your investment strategy right? How can you make sure you’re choosing the right property? Where can you find the time to do the necessary research? What is the right price to pay?

A good buyer’s agent is the property investor’s secret weapon. They provide professional guidance on every aspect of your property investment journey, with the objective of saving you time, money and many sleepless nights. A buyer’s agent can help you take a more professional, balanced approach to your property investment activities, removing the emotional aspects of the process and saving you from the natural human tendency to make unwise, impulsive decisions under pressure.

What does a buyer’s agent do?
Buyer’s agents specialise in representing a buyer’s interests during a property purchase. Whilst they are most commonly used by property investors, buyer’s agents are also frequently used by families searching for exactly the right home, and people moving interstate or overseas, making the process much easier by doing all the leg-work and narrowing down the options.

Buyer’s agents usually offer differing levels of service, depending on your requirements. The full service covers every aspect of the property investment journey including:

  • Formulating an investment strategy that maximises your funds
  • Searching for suitable properties to fit your buying strategy
  • Researching every aspect of a property to ensure profitability
  • Arranging inspections with vendors and real estate agents
  • Negotiating a price and terms of sale
  • Bidding at auctions on your behalf
  • Co-ordinating your professional team – solicitors, mortgage brokers etc.
  • Ongoing service to help you establish a complete portfolio.

Getting the property research and selection process right is arguably the most important part of your property investment journey. It certainly takes the most amount of time and getting the right information requires a certain amount of know-how too. A professional buyer’s agent knows which questions to ask and where to look for the answers. They can often access information from developers, councils and other relevant bodies that is not readily available to the ordinary consumer.

However, you don’t necessarily need to engage the full services of a buyer’s agent. You can also engage a buyer’s agent just to do research for you, to negotiate a price for you, or to bid for you at an auction if you would rather not do it yourself. This can be a good idea if you are nervous, inexperienced, you can’t attend the auction yourself, or you feel you may get carried away by the auction process and pay too much.

How much does a buyer’s agent cost?
There are many buyer’s agents and the cost will vary according to the agent you choose, your location and your requirements. Qualified, professional buyer’s agents generally charge between 1.5  – 3% + GST of the purchase price of the property for their full services, however this can often be negotiated in favour of a flat fee and savings may be obtained if you are planning on purchasing multiple properties.

When providing a research service only, a negotiating service only, or a bidding service only, your buyer’s agent will usually charge a fee for their time. Again this will vary according to the agent, the location and your requirements. You can generally expect these services to cost around $1,000 + GST depending on how much of their time you require.

If you are purchasing a property for investment purposes, the cost of a buyer’s agent is generally tax deductible as are most of the professional services you will require as part of the process.

How do you find a good buyer’s agent?
A good way to locate a great buyer’s agent is by word of mouth – there’s nothing like a recommendation from a friend, colleague or trusted business advisor (like your mortgage broker) to make you feel confident about someone’s credentials. However, you can also find some reputable buyer’s agents through the Real Estate Buyers Agents Association of Australia (REBAA) website.

Sometimes, outsourcing is the sensible option
Engaging a buyer’s agent can save you hours of time and loads of stress. If you’re new to property investment, then a buyer’s agent can also be invaluable in helping you to avoid costly mistakes. When you do find a property you want to buy, all the hard work in locating it can easily be lost in the final hurdle – the purchasing process. Having an expert on your side to negotiate the price you need, or to bid for you at the auction, can reduce the risks and make all the difference. Using a buyer’s agent is one case where outsourcing can take a lot of the frustration out of the process!

For more information, or to get your property investment finance in place, give us a call. We’ll be happy to help.


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