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Buying an apartment vs a house as an investment

glennadmin — Sun, 03 Nov 2024 12:03:11 +0000

Do you want to jump into the property market but don’t have the budget to buy a house? A unit or apartment could be a great way to get your leg up on the property ladder.

According to CoreLogic data, unit values are now rising at a faster rate than houses in more than half of all suburbs across Australia.

Aside from being more affordable than a house, there are other benefits of apartment investing to consider. Let’s look at some of the pros and cons of investing in an apartment versus a house.

Pros of investing in an apartment

A more affordable entry point

The median house price in Australia’s capital cities is now $975,592. Compare that to the median unit price of $669,434 and that’s a big difference at the checkout.

With apartments generally being more affordable than houses, it means you’ll need to save up less of a deposit (usually around 20% of the purchase price), and you may find servicing the loan on an apartment easier too.

Fewer maintenance responsibilities

When you own a house, you have to foot the bill for all of the repairs and maintenance. With an apartment or unit, the costs of any repairs or maintenance in common areas is split with other unit owners, usually through a body corporate scheme.

Generally speaking, there’s usually less maintenance required on a unit compared to a house. There may not be a lawn to mow, for example.

Certain expenses can be more affordable

Some expenses can be cheaper when you own a unit. Council rates, for example, are usually higher for houses and may even include land taxes in some states.

If you’re paying smaller fees on an investment apartment, the returns on your investment can potentially be higher.

Potentially higher rental yield

Units often have higher rental yields than houses because you’re able to outlay less money to potentially acquire a similar rental income. This may mean you are in a better position to cover your mortgage repayments and other expenses.

Cons of investing in an apartment

You may need to pay strata fees

In a strata scheme, you’ll need to pay body corporate fees and factor these into your ongoing budget. Strata fees can be pricey and increase over time.

If there’s an onsite manager, pool, tennis courts, barbecue area and gym, expect higher fees than an apartment block with fewer facilities.

There may be restrictions

If you want to renovate your apartment, you may need to run the changes by the strata committee for approval, particularly if it affects the exterior of your apartment or any shared utilities.

There may also be restrictions around having pets, too, which could reduce your tenancy pool.

Oversupply can affect your investment

If you buy an apartment in an area where loads of high-rise apartment blocks are being built, it can affect your property’s capital growth, rental yield and demand from tenants.

Generally speaking, experts recommend seeking low-rise or boutique apartments in areas where planning rules cap the number of apartment buildings allowed.

Want to discuss your finance options?

Whether you’re looking to buy a small studio apartment, a bigger unit or a house, we can help you explore your finance options.

We’ll run you through the investment loans available to you and explain which may suit you, based on your individual financial situation and goals.

Get in touch today.

However, it’s important to remember there’s no one-size-fits-all approach to buying your first property. For some, it could be a home to live in. For others, rentvesting makes more sense as it can offer a great alternative to get a foot up on the property ladder.

Ready to get started?

As your mortgage broker, we’ll organise everything, explaining the process, keeping in touch and keeping you updated, so that everything runs smoothly.

Please get in touch today! Regards Glenn Biggins.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. This article does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

The post Buying an apartment vs a house as an investment appeared first on Focus Property Wealth - Perth Mortgage Broker.

Rentvesting: is this a good option for first-time buyers?

glennadmin — Thu, 15 Aug 2024 06:38:15 +0000

With today’s cost of living pressures and the median dwelling value in Australia now at $794,000, many young Australians feel like they’ll never be able to enter the property market.

What is rentvesting?

Reinvesting is when you rent where you want to live and buy where you can afford.

By rentvesting, you can earn an income from your rental property, pay off the mortgage and potentially cover the costs of owning the property, all while continuing to live in a suburb you enjoy.

Why do people choose to rentvest?

One of the biggest motivators of buying an investment property is the potential to make a return via capital growth. This is when your property increases in value over time.

If you’re positively geared (that is, the rental return is higher than your home loan repayments and other property expenses), a rental property can also offer you an additional income stream.

Another reason people choose to rentvest is that it’s another way to enter the property market, without having to purchase a home to live in. Maybe you’ve grown fond of your inner-city apartment (that’s unfortunately out of your price range) and don’t want to move out to the “burbs”? With rentvesting, you can own your own slice of real estate where you can afford and still have the flexibility to live where you want to live.

What to know before going ahead with rentvesting

1. Potentially smaller deposit, but fewer government perks

If you choose an investment property that’s more affordable than the home you intend to live in one day, your deposit will be smaller. It might be easier to save a deposit if you go down the rentvesting route.

However, because you’re an investor and not a first-home buyer, you won’t benefit from government schemes such as the First Home Owner Grant and First Home Super Saver Scheme, which would only apply if you were living in the property.

2. There are ongoing costs to factor in

If you’re rentvesting, you’ll need to budget for all of the costs associated with owning the property (e.g. the mortgage repayments, management fees, rates, water bills, maintenance, insurance, and strata levies if it’s under a body corporate scheme).

Keep in mind, the rental income may cover some, if not all, of these costs. You’ll also need to cover your own rent too.

3. Investor loans could come with higher interest rates

As a rentvestor, you will have an investor loan. These typically come with higher interest rates than owner-occupier home loans.

This means your mortgage repayments may be larger than if you were living in your own home.

4. There will be tax implications

At tax time, your accountant will ask for information about your investment property, including the rental income and expenses (most of which can be claimed as tax deductions).

Your accountant can guide you about the tax implications of owning a rental property, such as the potential for capital gains tax (if your property goes up in value) when it comes time to sell.

Like to know more?

If you want to get started in the property market sooner rather than later, rentvesting could be the way to go.

To explore your finance options, get in touch. We’ll help you work out whether rentvesting is right for you.

Ready to get started?

As your mortgage broker, we’ll organise everything, explaining the process, keeping in touch and keeping you updated, so that everything runs smoothly.

Please get in touch today! Regards Glenn Biggins.

The post Rentvesting: is this a good option for first-time buyers? appeared first on Focus Property Wealth - Perth Mortgage Broker.

Refinancing your home loan: how does it work?

glennadmin — Fri, 19 Jan 2024 06:00:13 +0000

When you’re busy with life, refinancing can seem like a hassle. However, with a mortgage broker to guide you through the process, it doesn’t have to be!

Refinancing may allow you to switch to a more competitive home loan, thereby potentially saving you money in interest.

It can also help you achieve other goals, like using different finance options to renovate your property or consolidating your debt and paying it off more efficiently. You may even consider refinancing to access equity to buy an investment property or another big-ticket item like a pool.

Here are the steps involved in the refinancing process:

Step 1: Work out your financial goals

Do you want to find a loan with a lower interest rate? Perhaps you’d like to explore some of the interest-saving loan features that are available nowadays, like offset accounts and redraw facilities?

It’s important to understand what your financial goals are so that we can help you to access the finance you need to achieve them.

Step 2: Compare home loan options

Next, it’s time to do some research.

Trying to understand all the different home loan options available and consulting with different lenders can be time-consuming and overwhelming. Instead, get us to do the hard yards for you.

We can explain which home loans may be suitable and help you narrow down your options.

Step 3: Submit your loan application

Once you’ve decided which home loan is right for you, we’ll take care of your mortgage application.

Just like when you applied for your original loan, you’ll need to supply certain documents. These usually include identification, proof of income, home loan statements, and records of living expenses, liabilities and assets.

The new lender may also require a property valuation. This helps them to determine how much they are willing to lend you.

Step 4: Discharge your existing loan and settle your new one

When your chosen lender approves your new loan, we will let your current lender know you plan to discharge, or pay out, your existing loan.

We’ll keep you informed throughout the settlement process and let you know when your new lender has paid out your old loan.

Step 5: Start making repayments

After settlement, you’ll receive documentation explaining the ins and outs of your new loan. Then, it’s time to start making repayments.

All up, for most cases the process of refinancing usually takes anywhere from four to eight weeks. The timeline depends on the lender, how quickly you submit the required paperwork and the strength of your application. Some lenders may offer a fast-tracked service.

Ready to get started?

As you can see, refinancing may not be as hard you think. If you’re interested in comparing what loan options are available for you, get in touch with us today.

Ready to Dive In?

Exploring finance options is a crucial step. Reach out to us! We’re here to guide you through the maze and help you align with your investment objectives.

Ready to get started?

As your mortgage broker, we’ll organise everything, explaining the process, keeping in touch and keeping you updated, so that everything runs smoothly.

Please get in touch today! Regards Glenn Biggins.

The post Refinancing your home loan: how does it work? appeared first on Focus Property Wealth - Perth Mortgage Broker.

Smart Investing for the Budget-Savvy

glennadmin — Fri, 18 Aug 2023 04:25:47 +0000

Perth property investment market is going very well, much of this success is to do with the WA property markets affordability in comparison to other states.

Is a small budget holding you back from property investment? Think again!

So you might be surprised to learn that you don’t need a hefty bank balance to dive into the property market. Let’s explore how you could make this dream a reality.

1. Unlock Your Home’s Potential Through Equity

What’s Equity? It’s the difference between your property’s market value and what you owe the bank. For instance, if your home is worth $800,000 and you owe $500,000, you have $300,000 in equity.

How Can It Help? If the value of your home has appreciated or you’ve made significant progress on your mortgage payments, you could be sitting on a hidden treasure. By refinancing, you can tap into this equity, providing you with the means to invest without depleting your savings.

2. Think Beyond the City

Why Regional? If city investments are stretching your budget, consider looking into regional areas. Many of these zones have recently surpassed major cities in performance, especially when it comes to vacancies, rental rates, and property values.

Hotspots to Consider in 2023: Refer to the latest “Top 10 Affordable Regional Areas 2023” report for inspiration. This comprehensive study, based on affordability, property trends, investment considerations, project development, and unemployment rates, highlighted the following standout areas:

Queensland: The Whitsunday Region, Mackay Regional Council, The Charters Towers Region.
New South Wales: Federation Council, Dubbo Regional Council, The City of Lithgow.
Victoria: City of Greater Bendigo, City of Greater Shepparton, City of Ballarat.
Tasmania: Central Coast Council.

3. Two Heads Are Better Than One

Joint Ventures: Consider teaming up with someone. It could be a friend, family member, or another investor. Pooling resources can make property investment more accessible.

Remember: This is a big decision. Always get legal advice to ensure everyone’s on the same page.

4. The Off-the-Plan Route

How It Works: You sign a contract, pay a deposit (often just 10%), and settle the balance once the property’s built. This gives you time to get your finances in order.

Pros: Lock in today’s price, even if property values soar during construction.

Cons: There are risks, like potential drops in property value. Always research thoroughly.

Ready to Dive In?

Exploring finance options is a crucial step. Reach out to us! We’re here to guide you through the maze and help you align with your investment objectives.

Ready to get started?

As your mortgage broker, we’ll organise pre-approval on your home loan and get your loan application over the line, so that everything runs smoothly come settlement day.

Get in touch today and let’s chat about your exciting new property purchase.

Please get in touch today! Regards Glenn Biggins.

Smart Investing for the Budget-Savvy

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Home Settlement Process – What you should know

glennadmin — Mon, 03 Jul 2023 07:27:06 +0000

There’s nothing quite like the buzz of seeing those words in your inbox: Confirmation of settlement of your property purchase.

Settlement day can be both exciting and stressful. But once the formalities are done, it’s all worth it.

If you’re planning a property purchase and are new to how settlement works, here’s a rundown.

Settlement day is when ownership of a property is legally transferred from one party to another. It’s facilitated by your legal and financial representatives, and those of the seller.

The actual date is stipulated in the sales contract.

Settlement periods are generally 30 to 90 days from when the sales contract is signed by both parties. However, settlement can be longer or shorter if mutually agreed upon.

What happens on settlement day?

On settlement day your solicitor or conveyancer meets with your lender and the seller’s representatives to exchange paperwork.

Typically, the buyer and the seller do not need to be present.

Your lender and conveyancer will arrange the following with the seller’s representatives:

The balance of the purchase price, along with any government fees and duties, is settled. All outgoings such as rates, water charges and strata fees are adjusted between the seller and the buyer (you pay for these from the day after settlement).
All necessary legal documents are completed and lodged with the respective agencies.
The certificate of title is transferred to your name and the property is legally transferred to you.

Once settlement is completed, the keys are handed over by the real estate agent and the property is all yours!

How to prepare for settlement?

1) Be organised with the paperwork.

For settlement to run smoothly, it’s important you provide all the necessary paperwork in a timely manner.

For the finance side of things, we’ll walk you through the documentation required for your loan application.

You’ll also need to work with your conveyancer to complete and submit all the necessary documentation to transfer the property title to your name.

Prior to settlement, your conveyancer or solicitor will likely get you to review the settlement statement, which outlines exactly what you will be paying on settlement day.

2) Complete a pre-settlement inspection

You’re entitled to inspect the property in the lead up to settlement to ensure it’s in the same condition as when the sales contract was signed. The last thing you want are hidden surprises when you open the front door.

3) Organise insurance

Make sure you check the date when you need to have your building insurance sorted. It may be from when you sign the sales contract, or by settlement. Rules vary by state and territory.

Ready to get started?

As your mortgage broker, we’ll organise pre-approval on your home loan and get your loan application over the line, so that everything runs smoothly come settlement day.

Get in touch today and let’s chat about your exciting new property purchase.

Please get in touch today! Regards Glenn Biggins.

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Can you exit an off the plan purchase?

glennadmin — Thu, 14 Feb 2019 01:14:11 +0000

Considering buying a property off the plan? It sounds good in theory, with the possibility of stamp duty concessions and other benefits for first home buyers. But in 2018 there were quite a few people who got caught out by the hidden risks. Read on to find out what you need to know if you’re thinking about buying off the plan this year, or if you’re having second thoughts about an off the plan purchase.

What does ‘buying off the plan’ mean?

When you buy ‘off the plan’, it means the property you’re buying is not built yet. Typically, you’ll only have to pay the deposit upfront, then the balance of the purchase price once the property is completed. Because an off the plan purchase is a new build home, you may qualify for stamp duty exemptions or first home owner concessions, depending on your circumstances. (Check your state or territory’s rules online).

What are the risks?

Lenders may offer conditional approval for off-the plan purchases, but they won’t lend you the funds until they have performed a valuation of the property upon completion. In 2018, many buyers were caught out because their off-the-plan property was valued at less than the agreed purchase price and the lender would not lend the amount required to complete the sale.

There may also be other risks with purchasing an off the plan property, including:

The final product may differ from your expectations.
There may be delays or the development may not proceed. Your deposit should be refunded if this happens, but in the meantime, your money will have been tied up.
If the developer holds on to your deposit (rather than putting it in a trust account), your money may be at risk if the developer goes bankrupt.

Terminating an off-the-plan contract

Terminating an off-the plan contract can be tricky, but there may be grounds to do so. For example, if the vendor has engaged in misleading conduct or the developer doesn’t complete construction before the sunset date, you may be able to terminate the contract.

However, if you want to terminate the contract because a lender has valued the completed property at less than the agreed purchase price, you may have difficulty. You could potentially lose your deposit and may have to compensate the developer for any loss.

Seek legal advice about your options if you wish to terminate an off-the-plan contract. More importantly, ask your solicitor to examine any contract before you sign, to ensure you have appropriate exit clauses in place – more about this below.

Selling before settlement date

Some buyers decide they want to sell the property before settlement. This is legal under most off-the-plan contracts and can prove to be lucrative if the property’s value has gone up, but there are risks involved.

Key considerations:

Have your conveyancer check that the contract allows for re-sales prior to settlement.
Speak to your accountant about the tax implications of reselling the property (you’ll likely be up for capital gains tax).
You’ll have to pay stamp duty, additional legal fees and any agent’s commission, so be sure to factor these costs into your calculations.
If you find a buyer but your contract with them falls through, you’ll still be bound to settle with the developer.
Ask the developer to include a clause in the contract that allows you to terminate it if the completed property is valued at less than the agreed price.

Talk with me before you get started

If you do decide to go ahead with your off the plan purchase, I can help to organise pre-approval on your home loan and help you choose a lender that will work with you on this type of purchase. I can also refer you to a reliable conveyancer or solicitor to help you avoid the legal pitfalls. If you’re having difficulty organising finance to complete an off the plan purchase, please get in touch asap!

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5 Tips to take the stress out of settlement day

glennadmin — Mon, 26 Feb 2018 12:40:24 +0000

You’ve found your dream property, had your offer accepted and the all-important settlement day is the last hurdle to overcome. The anticipation has been building for weeks!

Settlement day can be both exciting and stressful, as sometimes things can go wrong. In this article, we offer some tips about settlement day and explain how we, as your mortgage broker, can help ensure everything goes to plan. But first let’s explain about settlement day and how it all works.

What is settlement day?

Settlement day is the day ownership of a property is legally transferred from one party to another – in other words, the day you get the keys to your new home! There are all sorts of regulations and procedures that must be followed for this to happen, but your conveyancer will take care of the finer details and we’ll work with them to ensure your finance is all set. The actual date of settlement date will be outlined in the Sales Contract - it’s a good idea to discuss the timing with us, your mortgage broker, and get your conveyancer to review the contract before you sign it. If you don’t have a conveyancer, please ask us for a referral.

What happens on settlement day?

By the time settlement day rolls around, you should have undertaken a final inspection of the property, organised building insurance (this should be done as soon as the seller signs the contract) and your conveyancer will have taken you through all the necessary documentation to transfer the property title to you. On the big day, a representative from your home loan provider and your conveyancer will meet with the seller’s representatives – you aren’t required to attend. Your conveyancer will receive the property title and register you as the new owner, cheques will be exchanged, and any government fees and duties paid. Once the paperwork is completed, you will be notified of a successful settlement and then get the keys and officially become the new owner.

Now for those tips about ensuring settlement day goes smoothly!

Tip #1: See your mortgage broker early

To ensure a hassle free settlement day, it’s important to seek professional advice from experts who understand the process. Talk to us before you start looking for your property, so we can organise pre-approval of your home loan with your preferred lender. It’s also a good idea to talk with us about the property you choose, so we can ensure the lender is happy with the price and value and will grant final loan approval. That way, when it’s time to sign the sales contract, you’ll be confident your finance is secured. We hold your hand and take you through every step right through to settlement and beyond, so you can feel confident that things go smoothly on the day!

"We hold your hand and take you through every step right through to settlement and beyond"

Tip #2: Find a reputable conveyancer

You’ll need a reliable conveyancer to oversee the complex legal requirements and paperwork involved in a property purchase. Among other tasks, your conveyancer will ensure there is enough time between the finance approval date and the nominated settlement date. Ask friends and family for a recommendation and be sure to check the conveyancer’s reviews. We can also offer a referral to a reliable conveyancer if needed.

Tip #3: Negotiate a date that works for you

It’s important to remember that you have the power to negotiate the settlement period with the seller before signing the contract. Even if you’re buying at auction and the settlement period is in the contract, you may be able to liaise with the seller’s agent to see if the seller would be open to a different date. This could be useful if you’re moving from one home to another and need to plan the timeframe.

The settlement period begins the day the contract is signed and is usually between 30 and 90 days. So, the settlement period should also allow enough time for your finance to go through, searches to be undertaken and paperwork to be completed. Keep in mind that it can take time for your lender to issue and approve the paperwork – so check back with us about a suitable settlement period for your loan.

Tip #4: Be vigilant about the paperwork (and we will be too!)

There’s often a lot of paperwork involved in a property purchase. If you’re late at returning paperwork to us or you fail to sign a page or tick a box, it may delay loan approval and there may also be issues with settlement if you delay signing documents from your conveyancer. Pay attention to detail when filling out the paperwork and return it as soon as you are asked to by your broker or conveyancer. We have detailed processes to ensure no paperwork gets missed, but it pays to know what you are signing and when at your end as well!

Tip #5: Enjoy the ride

You’re bound to feel nervous as settlement day approaches. But try not to stress too much and enjoy the process. If you have a team of professionals on your side and you’re properly organised, things are likely to go to plan. Remember, our role as your mortgage and finance broker is to help ensure your settlement day goes smoothly, so please get in touch early in the purchasing process and we’ll be there to help you every step of the way!

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. All loans are subject to lenders terms and conditions – fees, charges and eligibility criteria apply.

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Unique Christmas Decorations for your home

glennadmin — Mon, 18 Dec 2017 02:00:51 +0000

Christmas is such a special time of year! You can feel the magic in the air at shopping centres as the Christmas decorations come out, or when you’re driving around and notice people transforming their homes into a wonderland of lights.

If you’re also looking to fill your home with holiday cheer, here are some unusual festive home décor ideas you’re going to love. And remember, if you need finance for a really big gift (like the kind that’s just too large to wrap), please give us a call!

Create an unconventional tree

If you feel like a change this Christmas, why not invent your own tree? Pinterest has plenty of great ideas, like dressing up a ladder as a Christmas tree or using driftwood to create a rustic-looking tree display. Check out the effect here.

Go big with your light display

Instead of spending a fortune on the electricity bill with miles of rope lights, why not turn your pad into a light show spectacular the easy and inexpensive way, with cool options like Target’s Snow Flurry Lightshow Projector, which blasts a bright swirling display of snowflakes onto your home. Otherwise, you could opt for something more subtle. For example, you could line walkways with luminary bags or lanterns to create an ambient effect. Here's some inspiration.

Make your own snow globes

If you have small children, they are going to love this one! DIY snow globes are easy to make and a great way to create festive cheer. All you need is a small glass jar, a plastic figurine of something Christmassy, glycerin, glitter, water and glue. Simply glue the figurine to the inside of the jar lid, fill it with water and glycerin, add a couple of teaspoons of glitter, screw the lid back on and glue it down if necessary. There you have it, Christmas cheer in a jar! You can even make a winter wonderland terrarium by adding small twigs, pinecones, and cotton wool to the jar and leaving out the water.

Make merry in the throne-room

Why not dress up your toilet with Christmas decorations cheer and give your guests something to talk about? You could make a Santa toilet lid cover and toilet mat, or if you really want to impress them with your Christmas cheer, invest in an LED toilet bathroom night light like this one, available on eBay. It’s motion activated, so your guests won’t have to stumble around in the dark looking for the light switch.

Jazz up your front door

Have you heard of Christmas front door covers? We hadn’t either, but apparently you can give your house a Christmas facelift with a front door mural. There are some really high-quality designs available, and what’s great is that they are removable and reusable. Banners come in all different colours and feature everything from the big man in red to Christmas trees and nativity scenes. Click here to check them out.

What else would be fun for Christmas?

How about a new family car, boat or a jet-ski? Buying that dream home or investment property you’ve always wanted would also be a great reason to celebrate with your family.

We are here to help you have yourself a merry little Christmas indeed, with a loan for a new home or investment, or tailored finance to fit your other purchasing needs. Please contact us or give us a call today!

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