The good news is you can capitalise on their eagerness to sell, and that makes the start of the 2017 a great time to find a genuinely sharp price for your new car!

But, to snap up a great car deal in the New Year, you need to be prepared. Here are our steps to help you get ready for the New Year car sales and ensure a smooth ride towards owning your new car.

Research

As with all big investments, you need to do your research before you even consider getting behind the wheel for a test drive.

Start by thinking about the make and model you would like. Consider what your plans might be for the next year or so. Will you have another child? Do you need a certain car for your line of work? It’s also worthwhile considering how you will use the car. Do you need good fuel consumption? Will you take it off road?

There are many factors that can influence you towards a certain make or model – car insurance costs, resale value, warranty and more. Being informed can make the process of test drives and getting your finances in place a lot easier and quicker, as you don’t waste time of cars you know don’t suit your needs.

There are loads of resources out there that can tell you about your ideal car. Why don’t you check out the manufacturers’ website, online reviews, or reliability surveys?

Make plans for your old wheels

What you decide to do with your old car is important when we consider how you are going to finance your new car. If you are relying on the funds from the sale or trade-in of your old car, you need to decide on this before we can help you arrange the finance of your new purchase.

Whilst trade-ins are convenient and generally very straight forward, you don’t always get as good a rate as you might should you go down the private sale path. Either way, knowing how much you have to play with from your old car will help get your new car finance in place.

Get your finance sorted

In most instances, you are better off arranging your own finance through a broker, rather than going through the car dealer. Often car dealers will offer you “amazing deals” on the day that may end up costing you more in the long run, so it pays to have your buying power sorted before you head to the car yard. Plus, having your finance pre-approved also gives you a solid bargaining position, should you need it!

There are loads of different ways you can finance a new car. You can:

• Get a car loan: This is a common, straight forward option that’s great for most people.
• Take out a lease: A lease differs to a car loan in that the lender retains actual ownership of the car.
• Use the equity in your home: If you own your home, you could consider refinancing your home loan to use some of your equity to pay cash for a car. Or you could use your redraw facility if you have been overpaying.
• Get a chattel mortgage: If you have a company, business partnership or are a sole trader, you can use a chattel mortgage to buy a vehicle provided it is primarily used for business purposes.

We can work with you to determine the option that is most suitable for you, then we’ll do all the legwork to get your finances sorted – so you are ready for the test drive!

Test drive before you buy

Once you have your preferred make and model in mind, and you know how much you can afford to spend on the car, you can go ahead and start testing them out.

It’s always a good idea to take someone with you for a second opinion, and if possible, for you choose the test route (rather than the usual one the car salesperson uses). Take your time, test out the various features of the car, and use the opportunity to ask any questions you may have.

Check the price and inclusions

Whilst it may sound great, look great and drive well – it always pays to shop around. Why not take a look at the same car at a few different dealerships?

It is hard, but try not to get sucked into those ‘one day only specials’ at the car yard, as usually you can get a similar special on another day once you are more informed.

Car dealerships are required to quote in full. Make sure you are being quoted for everything – registration, fees, stamp duty, etc. It’s also worth being aware of any ‘extras’. This can include leather seats, tinted windows, extended warranties, etc. If these are not part of the standard model – they will cost you more!

And then you are done, nearly!

Congratulations, you are a happy owner of a new car. Once you have found the right car, don’t feel pressured to sign anything until you are 100% happy. Check all the paper work, and make sure all the details are correct, to your expectations, and complete. We can help you with this if needed, just give us a call. Finally, before you drive your car out of the yard make sure you have car insurance – imagine having a bingle on the way home from the lot!

If you’re planning on buying a car, talk with us about which option will be most beneficial to your financial circumstances. Just give us a call, we’ll be happy to talk you through all of the car financing options available for you.

If you live and work in one of Australia’s major capital cities, you are probably finding this task increasingly difficult in your local market as both prices and competition continue to increase.

The answer may be to look further afield. Australia is made up of many different property markets which work together to provide property investors with a full range of investment choices. And diversifying your assets across interstate markets could help you to minimise your risks and maximise your capital gain and income potential. Here are eight tips for making successful interstate property investments to help you build wealth for your future.

1. Do your research.

Whether you’re investing interstate or locally, thorough research is vitally important. You need to become fully familiar with the market you buy into to be confident about your purchasing decisions and avoid expensive mistakes. Your research should cover four basic steps:

Step 1: If you are considering investing interstate, start by researching all the markets across Australia to find which of them provide areas with properties that generally meet your budget and buying strategy, then compare these with each other until you have just a few that you find attractive.

Step 2: Once you have located an interstate market that may be suitable for your investment, research it carefully to identify a general location within that market that meets both your affordability level, rental yield and capital growth objectives.

Step 3: Research the streets and properties within the area you have identified to pinpoint an opportunity to make your property purchase. If you need help formulating a buying strategy, call us for a chat.

Step 4: Research the individual property you select very carefully before you put down a deposit or go to auction. Get building and pest inspection reports together with a comprehensive condition report so you can make an accurate projection of your costs of ownership, including maintenance planning and potential depreciation tax deductions.

2. Buy with your head and not your heart.

Don’t dismiss an interstate location simply because you wouldn’t want to live there yourself. Some investors also make the mistake of choosing a property investment location because it is their favourite holiday destination or somewhere they’d potentially like to retire one day. Always remember that choosing an investment property is a business decision and you should base your decision on potential investment returns, not on personal preferences. To choose a profitable location for your property investment, always focus on the numbers and research data.

3. Visit the location.

Travelling interstate to view investment opportunities may be inconvenient, but no matter what you may hear from other investors, buying a property sight unseen could be risky. Take the time and effort to at least visit the location. You may be able to claim the travel costs as a tax deduction (but talk to your accountant first). If you can’t stay there long enough to locate, inspect and buy a property yourself, then consider interviewing a local buyer’s agent while you are on your initial visit. This will allow you to quickly engage a trustworthy representative to help you in case you can’t get back there yourself when you find the right opportunity.

4. Partner with a good property manager.

Whilst you are visiting the interstate location, it is also a good idea to identify a good property manager in the area and engage their services as well. Managing a property from interstate is not easy and may cost more than you anticipate in travel and expenses. Property management costs are usually tax deductible for most property investors, so ask your accountant if the numbers stack up to allow for a property management company to be included in your budget for the interstate property you are interested in purchasing.

5. Line up a local conveyancer.

Whilst it is possible to use your regular conveyancer or solicitor to help you purchase a property interstate, the costs may be higher than using a conveyancer that is located near to the interstate property you wish to purchase as their expenses to complete the process may be greater. Conveyancing rules, regulations and practices also differ from state to state and your usual conveyancer may be unfamiliar with these differences. Ask us if you need assistance locating an interstate conveyancer.

6. Note the different legal requirements.

Each state has different legal requirements for the purchase and transfer of properties. If you are buying interstate you should talk with a qualified conveyancer or solicitor to make yourself aware of differences in:

• Property titles and transfer requirements.
• Local and national planning controls.
• Rules regarding the purchase of property for foreign investors (if you are from overseas and not a permanent resident).
• Terms and conditions required for sales contracts.
• Terms and conditions imposed on auctions.
• Cooling off periods.
• Permitted uses, zoning certificates and heritage overlays.
• Body corporate rules and constraints.
• Rental and tenancy rules and agreements.
• Rules and regulations when buying off the plan.

7. Research the costs.

Stamp duties, land taxes and other government costs like transfer fees vary from state to state. Council rates can also be widely different from one location to another and you may be surprised by how much. When purchasing interstate, it pays to research these costs well ahead of time so that you can factor them into your budget and avoid funding or cash flow difficulties.

8. Talk with your mortgage broker early.

Good credit advice when investing in property is critical to your success as an investor. Getting pre-approval on a loan for a purchase in a specific location is not only a good idea for budgeting purposes, it will make you aware of any postcode or location restrictions imposed by the lender on the area you are considering. Some lenders impose these restrictions on hundreds of locations around the country to minimise their risk of loss. Where you buy can have a significant effect on how much money a lender is prepared to let you borrow, so it pays to talk to us early about your purchasing plans.

We’re here to help you get things organised if you’re planning to invest in property interstate. Just pick up the phone and give us a call to discuss your plans, we’ll be happy to help you get the ball rolling.

As you scroll through the listings and your eye wanders across all the gorgeous homes in Australia’s most idyllic holiday spots, you’ll also notice the breathtaking prices they command during the peak season. If you’re a property investor, you may find those high price tags make it very hard to resist the idea of investing in a luxury holiday rental property yourself. But is it really going to be a good money spinner?

Three things make a profitable holiday rental property. The right location, the right property and a luxurious fit out that brings your guests back time and time again. So what do you need to do to get set up for a high-yield holiday rental investment?

Choose the right location.

Yes, it is easy to make big dollars from a property by the sea in the height of summer, but you need to look at the total potential rental return across the entire year. Making a decent profit from a holiday rental investment requires a location that will attract holidaymakers all year round, not just in summer.

Ask yourself: what does the location have going for it as a holiday destination year round? Try and choose a location that offers people something special. Australians love the great outdoors and if your investment property is in a location of great natural beauty, it’s likely to be a winner.

A destination that is under three hour’s drive from the nearest capital city and international airport will not only attract local guests, it will attract people from interstate and maybe even overseas. If there is also a regional airport nearby, then all the better.

Choose the right property.

When choosing a property for a holiday rental investment, the first thing you need to take into consideration is the property’s accessibility to the local attractions and tourist hot spots. For example, if you’re investing in a property at a beachside location and want a maximum rental return on your investment, make sure it’s actually close to the beach and not on the other side of town near the highway entrance and the take-away food drive-thru.

Be careful to choose a property that offers a resort-style atmosphere. Avoid anything that is too suburban or ordinary in favour of a property that offers something different, like good views and wide open spaces.

Consider a property that offers plenty of room inside, with at least one sitting room separate from the kitchen living area. It should also have a separate laundry and wet area and of course, plenty of bedrooms. For a luxury holiday rental, a decent outdoor area is a must and a swimming pool will be a major attraction if you can manage it.

Set your property up to attract high paying guests.

Setting up your holiday rental property so that is practical and hard wearing is a good idea, but the trick is to do it in a way that looks luxurious, stylish and expensive so you can attract the highest paying guests. If you want to make the most profit from your investment, you need to make your place look absolutely fantastic in your online advertising photos and make sure it excites and delights your guests when they walk through the door.

Holidaymakers paying top dollar expect better levels of comfort and luxury in a holiday house rental than they do from their own homes. They will expect to find a good dishwasher, a great cooker and a large fridge in the kitchen at the very least. A modern flat screen TV and Wi-Fi is a must.

Your guests will also expect a king-or queen sized bed in the master bedroom and at least one other room with a double bed. Flexible sleeping options that will help them reduce costs by sharing with more people or another family are also a good idea.

Keep the decor simple, stylish and eye-catching – ask a local decorator for advice if necessary and try to create a look that compliments the location. Don’t be tempted to use your holiday rental property as a depository for all the old furniture the family doesn’t want. Red flags are outdated TVs, daggy curtains, garish duvet covers, cabinets with trinkets, clunky second-hand lounge suites, too many ornaments, ugly brown wood shelves, nanna-style light fittings, and horror of horrors, industrial or pub style wall-to-wall carpet.

Combining tourism and hospitality with your property investment can be a great idea if you do it right. If you’re considering buying an investment property in a holiday hot spot, let us know and we’ll help you crunch the numbers to see if it will be a good investment for you. Getting your finance right can make a big difference to your bottom line when investing in any kind property, so call us today to discuss your plans.

At its 2016 Melbourne Cup Day meeting, the Reserve Bank of Australia (RBA) decided to keep the official cash rate on hold at 1.5 per cent for November. The decision was widely expected by analysts and forward predictions are for no further RBA cash rate cuts in 2016.

The RBA may not have cut rates this month, but you can. Many lenders have indicated that interest rate changes do not only depend on RBA changes to the cash rate, but also on other market factors and their actual costs. So if you’re a home owner and looking to refinance to save interest, call us regularly to check the latest home loan interest rate that is available for you.

The RBA last cut rates in August and May this year, which brought the official cash rate to its lowest level in history. As a result, home loan interest rates are very competitive and the good news for home buyers and property investors is that it looks as though they will remain low for quite a while.

That means buying conditions are great this spring. Property market activity is heating up, particularly in Melbourne and Sydney, with plenty of housing stock for buyers and investors to choose from. For the week ending October 30, Victoria held 727 auctions and achieved a clearance rate of 76%, whilst Sydney held a whopping 1309 auctions and achieved a clearance rate of 77%.

Activity in other markets indicated that buyers are possibly being a bit more discerning about prices. Queensland held 417 auctions for the same period, which is quite high, however they only achieved a low clearance rate of 39%. South Australia held 179 auctions with a clearance rate of 69%, ACT had 93 auctions with a clearance rate of 70%, Western Australia – which is not a big auction market – held 75 auctions with a clearance rate of just 37%. Northern Territory only held 6 auctions with a clearance rate of just 17% and Tasmania 10 auctions with a clearance rate of 33%.

Rises in home values appear to have slowed across all markets during October. In Sydney, home values only rose by 0.62% and in Melbourne, they rose by just 0.78% despite strong activity from buyers in both of these markets. Brisbane/Gold Coast showed an increase of 1.10%, Perth 0.78%, Darwin 2.20%, and Canberra 0.40%. Adelaide showed a decrease of 2.39% as did Hobart, which showed a decrease in home values of 2.05% for the month.

Opportunities are plentiful for first home buyers, next home buyers, refinancers and property investors right now. We’re here to help you make the most of low interest rates and the excellent spring property buying conditions, so please give us a call to chat about your plans. We’ll help you get the right home loan for your needs, with the most competitive interest rate available for you from Australia’s leading lenders. Christmas is also approaching fast and if you’re looking to buy a big ticket item for yourself or your family, we’ll be happy to help you with your finance needs for that too, so please give us a call today.

We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains 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. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply. Information sources: Auction results: www.realestate.com.au. Home values: www.corelogic.com.au

With the official cash rate at an historical low and the possibility of more RBA rate cuts on the horizon, this is possibly the most frequently asked question of professional mortgage brokers today. Often the question is focused on the timing, with consumers asking if now is a good time to fix their interest rate, or if they should wait to see if interest rates fall even lower.

However, saving money on interest is not necessarily the most important thing to consider if you’re thinking about making the switch to a fixed rate loan. In this article, we talk about the pros and cons of fixed interest rate loans and the real reasons you should consider using one.

What is a fixed rate home loan?

A fixed rate home loan allows you to lock in an interest rate for a fixed term, which means your loan repayments stay the same during the fixed term even if variable interest rates should rise. It allows you to plan exactly how much your repayments will be for the life of the term, making budgeting easier and this is the major benefit of a fixed rate home loan.

Usually you can choose to fix the interest rate on your home loan for a term between 1 to 5 years. After the fixed period ends, the loan usually reverts automatically to the standard variable rate unless you refinance your loan to another product or negotiate another fixed term.

Is switching to a fixed rate product a good interest saving strategy?

For some people, the motivation for switching to a fixed interest rate product is primarily to save money in the event of an interest rate rise. These home owners are looking for ways to save money on interest any way they can over the life of their loan. Their strategy is to go with a variable rate product for now so they can pay the lowest interest possible in the short-term, then switch to a fixed interest rate product to keep their interest rate low when interest rates look as though they are going to rise.

Basically, they are interested in locking their interest at the lowest rate possible when it is most prudent to do so. That’s why we are always being asked if ‘now’ is a good time to fix.

The problem with this interest savings strategy is that no one can accurately predict interest rate movements. That makes it very difficult to know when it might be advantageous to switch, or even if switching will have the desired effect of saving on interest. How do we know when we will save more by using a variable rate product and when we will save more by switching to a fixed interest rate product?

There is really no way to tell. In order to save money on interest by switching to a fixed rate product, variable interest rates would need to rise well above the interest rate you are paying on your fixed rate loan (and fixed rate loans usually carry a higher interest rate than variable rate loans). You also need to consider that if interest rates should fall during the fixed interest term of your loan, you will be missing out on any interest savings you would have received if you had a variable rate loan.

Consider your financial circumstances before making the switch

The decision to switch to a fixed interest rate loan should be influenced by other factors besides the possibility of any substantial saving on interest. The point of a fixed interest rate loan is to help you budget your household expenses more effectively, particularly for the first few years you own a property when your finances may be tight and budgeting may be difficult. As an added bonus, you are temporarily protected from interest rate rises. If interest rates do increase during the fixed interest term of your loan, you will have until the end of the fixed interest term to plan how you will manage to cover the increased payments on your loan when the fixed term ends.

Switching to a fixed interest rate loan may not be a good idea if you need flexibility. If you are planning to sell your home in the near future, increase your loan or redraw from it, make extra repayments or refinance to access equity, staying with a variable rate home loan could actually save you money. Fixed rate home loans usually have sizeable penalties if you need to make changes or pay off the loan during the fixed term of the loan, which could cost you many thousands of dollars.

The split option is designed to help you hedge your bets

Many lenders offer a home loan product that gives you the capacity to split your loan between both the variable and fixed interest rate options. This could give you the advantage of partial protection in the event of interest rate rises, but could also offer you facilities like an offset account which could be very beneficial if you are a good saver, plus the ability to make extra repayments and redraw them if you need to.

It is important to remember that with a split loan, you are still locked into the product for the length of the fixed rate term. If you needed to sell your home or repay the fixed portion of the loan early for any reason, you would still be required to pay a stiff penalty.

To find out if switching to a fixed interest rate loan is the right move for you, it is a good idea to talk to a professional mortgage broker about your personal financial situation and goals. We’re here to help you understand which products are right for your needs and help you to choose an option that saves you the most amount of money possible. Call us today.