Investment Archives - Focus Property Wealth - Perth Mortgage Broker

Redraw vs offset: what first-home buyers should know

glennadmin — Mon, 25 Aug 2025 11:48:50 +0000

If you’re planning to buy your first home this spring, you’re not alone. It’s one of the busiest times in the property market, with more listings and more competition. That’s why it’s important to be well prepared.

Beyond interest rates, there are other features that can make a big difference to your loan and how much interest you pay. Two of the most common are redraw facilities and offset accounts. While they both help reduce interest, they work in slightly different ways.

Here’s a breakdown of what they mean and how to choose the option for your needs.

What is a redraw facility?

A redraw facility allows you to make extra repayments on your home loan and then access those extra funds later if you need them.

For example, if your minimum repayment is $2,000 and you pay $2,500, the extra $500 goes towards your loan. This lowers the balance and reduces the interest charged. If needed, you can request to withdraw that extra amount at a later date.

Pros:

Lets you pay down your loan faster by making extra repayments
Helps reduce interest over time while keeping funds available

Things to consider:

Some lenders place limits on how much you can withdraw or how often
Withdrawals may not be available instantly
Fees and conditions may apply

I can help you understand which lenders offer flexible redraw options that suit your financial plans.

What is an offset account?

An offset account is a transaction account linked to your home loan. It works like an everyday bank account – you can have your salary paid in, use a debit card, and pay bills directly from it.

The money in the account is “offset” against your home loan balance. For example, if your home loan is $500,000 and you have $20,000 in your 100 per cent offset account, you are only charged interest on $480,000.

Pros:

Reduces interest charged while keeping your money accessible
Can be used for everyday banking, helping you stay organised
May help you pay off your loan sooner

Things to consider:

Some lenders charge higher fees for offset accounts, or have limits on how many you can open
Not all offset accounts reduce the full loan amount – some offer only partial offset

As your broker, I can help you compare lenders to find an offset account that matches your spending and savings habits.

Choosing the right loan features

If you’re just starting to explore your home loan options, it’s okay not to have all the answers. The most important thing is to choose a loan that suits how you want to manage your money.

Some loans include redraw or offset features as part of the package. Others may charge more or offer fewer benefits. I’ll help you make sense of your choices so you can borrow with confidence and avoid paying more than you need to.

Planning to buy this spring?

Now is the ideal time to get organised. If you’re looking at buying in the coming months and want to understand how loan features like redraw and offset accounts can help, let’s chat. I can also help you get pre-approval sorted so you’re ready when the right property comes along.

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.

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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.

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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.

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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.

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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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mortgage prison how can you escape it?

glennadmin — Fri, 16 Jun 2023 03:06:51 +0000

Stuck in an expensive home loan and feeling trapped?

You’re not alone. It’s estimated about 16 per cent of households with a mortgage are in a “mortgage prison”, unable to refinance to a more competitive interest rate because they can’t meet strict serviceability rules.

But there may be a way out. And we can help.

What is mortgage prison?

A mortgage prison is when you lack the equity or can’t meet the serviceability requirements (the “stress test”) to refinance your home loan. As a result, you become shackled to a mortgage you may no longer be able to afford.

What is the serviceability buffer?

The serviceability buffer is designed to help ensure borrowers can afford to repay their loans in a range of scenarios – if interest rates go up or if their income or expenses change.

In 2021, the Australian Prudential Regulation Authority (APRA) increased the minimum interest rate buffer it expected lenders to use when assessing the serviceability of home loan applications from 2.5 to 3 per cent. That means that borrowers taking out a loan must be able to meet repayments at an interest rate that is at least 3 per cent higher than the loan product rate.

There has been growing pressure on APRA to relax the serviceability buffers for refinancers to help address the mortgage prison situation. APRA has said its serviceability guidelines remain appropriate but it would adjust their policies if there was a risk to financial stability.

Why are more people landing in mortgage prison?

Unfortunately, a perfect storm of factors has landed many borrowers in mortgage prison.

Firstly, we’ve seen an unprecedented amount of rate hikes since May 2022. This in turn has affected serviceability buffers (lenders need to be sure prospective borrowers can withstand higher repayments should interest rates continue going up).

And with property prices falling in many markets in the last 12 months, many homeowners have seen their equity plunge.

Then there’s the fixed rate cliff situation. Australians who secured loans during the period of all-time low fixed rates are now confronting substantially higher interest rates as their fixed rate terms expire.

Long story short, many borrowers are now finding themselves in mortgage prison, grappling with costly mortgage repayments but unable to refinance due to the 3 per cent serviceability buffer.

How we can help

As your mortgage broker, we can:

Investigate whether there may be other lenders out there who might take you on.
Negotiate with your current lender. We may be able to request a lower interest rate, investigate other options like reducing your loan fees and applying for financial hardship.
Suggest ways to improve your serviceability. For example, you may be able to reduce your living costs or pay down more of your principal and increase your equity.
Find out how your credit report is looking. This is an important piece of the puzzle with a loan application.
Explain whether debt consolidation could help get you into a better financial position.

If you’re feeling trapped by your home loan and want to explore your options, get in touch today. We’re here to help.

We are here to help with any questions you have, so get in touch today.

Please get in touch today! Regards Glenn Biggins.

Mortgage Prison

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How your HECS-HELP debt affects your borrowing capacity

glennadmin — Thu, 11 May 2023 07:17:19 +0000

Do you know how much you owe on your HECS-HELP debt?

While student HECS and HELP loans in Australia are interest-free, they are indexed every financial year based on a cost of living index.

The recent outbreak of high inflation means millions of Australians with student loan debts are facing a 7.1% increase from 1 June, up from 3.9 per cent the previous year.

Your HECS-HELP debt is an important piece of information that banks take into consideration when assessing your application for a home loan, so it’s important to understand yours.

If you’re a bit vague about all the details, it’s worth reading on to see how indexation will impact you.

What is HECS-HELP?

The Higher Education Loan Program (HELP) is a federal government scheme that offers loans to students so they can afford their university and higher education courses.

Most university courses fall under the banner of a Commonwealth Supported Place (CPS). With these, the federal government covers some of the student’s university fees, while the student covers the rest – known as the ‘student contribution amount’.

Your HECS-HELP loan can be used to pay the ‘student contribution amount’. It can’t be used for things like accommodation, textbooks or your dormitory’s mini bar supply.

How do you find out how much your HECS-HELP debt is?

You can check the balance of your HELP debt, the indexation amounts and your voluntary and compulsory payments through myGov or by contacting the Australian Taxation Office (ATO) directly.

Do you pay interest on a HECS-HELP debt?

HECS-HELP debts are interest-free, but the amount of the debt is adjusted on 1 June each year in accordance with an annually determined inflation factor.

And because the cost of living and inflation has gone through the roof, the latest annual indexation factor is higher.

The 2022-23 HECS-HELP debt indexation factor for 2022-23 is 7.1%. To put it in perspective, in 2022, it was 3.9%. In 2021, it was 0.6%. Big difference, right?

Another way of looking at it is like this:

a $10,000 loan balance would increase by $710
a $25,000 loan balance would increase by $1,775
a $50,000 loan balance would increase by $3,550.

What does this have to do with getting a home loan?

When you apply for a home loan, lenders will look at your HECS-HELP debt when assessing your loan application.

While this type of debt is different from credit card debts and personal loans, you still need to make repayments on your student loan and this ultimately affects your income and borrowing capacity.

Paying off your HECS-HELP debt

Once you earn over a certain threshold, your employer will deduct a percentage of your income to go towards your HECS-HELP debt. The more you earn, the higher the repayment rate.

You can find more about the HELP repayment rates and thresholds here.

These PAYGW (pay as you go withholding) amounts are only applied after you do your tax return. So, if you were to jump online and look at your HECS-HELP debt today, your PAYGW payments wouldn’t have been applied yet.

What about voluntary payments?

You can make voluntary payments towards your HECS-HELP debt through myGov. Once processed, voluntary payments are credited directly against the loan balance by the ATO.

If you wanted to pay your loan balance off in full before indexation is applied on 1 June, you’d need to do so as soon as possible (taking into consideration bank processing times).

It is recommended to talk to your accountant or financial advisor about whether making voluntary payments is right for you.

Bottom line

Whether or not you are considering buying a property, it’s important to understand your HECS-HELP debt and how this year’s higher indexation could affect you.

If you’d like to find out more about how your HECS-HELP debt might be treated by lenders, get in touch and we’ll explain.

Additional Resource
https://www.realestate.com.au/home-loans/guides/can-you-still-get-a-home-loan-with-hecs-help-debt

We are here to help with any questions you have, so get in touch today.

Please get in touch today! Regards Glenn Biggins.

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How to manage your own investment property

glennadmin — Mon, 24 Apr 2023 05:24:13 +0000

How to manage your own investment property?

It’s time to find some quality tenants and sign them up to a lease. When it comes to this step, you can go one of two ways.

You can pay a property manager to take care of the nitty gritty for you. There are all sorts of perks to doing this, but of course, there’s a cost involved.

Otherwise, you can choose to manage the property yourself. Here’s what you need to do if you decide to take this route.

Familiarise yourself with the law

How and when do repairs need to be completed? Who pays the utility charges? What kind of notice is required before an inspection?

The answers to these kinds of questions and more can be found in your state or territory’s Residential Tenancies Act. The rights of both tenants and landlords are protected by these laws and you’ll need to be across them if you plan to manage your own investment property.

Prepare the paperwork

Next, it’s time to get your documentation in order. You’ll need:

A lease: usually a fixed term for 6 or 12 months.
The bond: an upfront payment by the tenant (usually one month’s rent) paid in advance as security for rent owed or damage, and held by the governing authority in your state or territory.
The condition report: takes note of the condition of the property before the tenant moves in and can serve as evidence if the tenant damages the property. Your tenant may also submit a condition report once they get the keys. Be sure to take photos.

Set the rent and list the property

To get an idea of how much to charge for rent, you could:

Ask us for a suburb report to find out what the going rates are
Check out websites like www.realestate.com.au and www.domain.com.au

Ask a local real estate agent for advice.

When you advertise the property, make sure you pair quality photos with a great listing to attract the kinds of tenants you want.

Remember to include any stipulations about pets and/or smoking.

Find quality tenants

Finding quality tenants all comes down to how thoroughly you screen candidates.

You’ll need to verify their ID and income (such as their most recent payslips and/or a bank statement highlighting their income), call their references and investigate their previous rental history.

Online tenant (renter) databases allow you to check whether candidates have been ‘blacklisted’ by previous landlords. Examples include:

Be aware that there are laws governing things like disclosure and how these databases can be used. Make sure you get up to speed with the rules in your state or territory.

Get the ball rolling

Once you find the right tenant, file all the necessary paperwork, lodge the bond and start collecting the rent. Keep in mind that each state or territory may have different requirements, so do your research.

Look into landlord software apps, which can help make your life easier with things like rent tracking and expense management.

Respond to repair requests

If you take care of your tenants, they will be more likely to take care of your property.

Make sure you respond to any requests for repairs and maintenance in a timely manner. Remember to check the rules and timelines around completing repairs in your state or territory’s Residential Tenancies Act.

Don’t forget inspections

You’ll want to organise regular inspections to ensure your property is being looked after. Rules may differ depending on location, so again, make sure you do your research.

It also pays to be meticulous about your record-keeping and documentation. Keep a record of all interactions with the tenant, as these can help protect you should issues arise.

Ready to become a landlord?

As you can see, there’s a bit involved with managing your own investment property. However, if you want to have complete control over your property and save yourself the commission you’d pay a property manager, it may be the way to go.

We are here to help with any questions you have, so get in touch today.

Please get in touch today! Regards Glenn Biggins.

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Guide to Investing in Property

glennadmin — Wed, 30 May 2018 07:49:24 +0000

When done right, investing in property can help you to build long-term wealth, and who doesn’t like the idea of an additional income stream? (Imagine what you could do with that!) The really great thing about investing in property is that just about anyone can understand the principals. If you’re thinking about building wealth for your future this way, here’s a step-by-step guide on how to go about it. We’ve kept it super simple and you’re bound to have questions, so please give us a call to find out how we can help you make it work!

Step 1: Talk to us about your borrowing power

The first step involves a friendly chat with us about your wealth creation goals and your finance structuring. We will run through your personal financial circumstances and help you determine your borrowing power - which is the amount a lender may be willing to lend you. Your borrowing power may be very different for an investment property than for a home to live in yourself.

Like all property purchases, you’ll need a deposit. If you already own your home and it has appreciated in value, or you’ve paid down your mortgage somewhat, you may be able to refinance to access equity to fund it. We can explain how this works and the kind of loan that will best suit your situation. We can also organise pre-approval so that you can set a purchasing budget and be confident a lender will come through with the finance when the time comes to start investing.

Step 2: Formulate an strategy when investing in property

Ask yourself what your ultimate objective is for investing in property – do you want to build a big investment portfolio of 10 properties or more and make a business out of it? Or are you more interested in concentrating on paying off your own home, perhaps using an investment or two on the side to generate some money to do it?

We are qualified property investment advisers and can help in addition to partnering with a financial planner and professional tax adviser when formulating your investment strategy. Maximising tax advantages is a big part of property investing and knowing what they might be in your personal situation is key. We are happy to help build your professional team, ask us for any contacts if you don’t already have a professional team on board.

Step 3: Set your budget

There are many costs to factor into your budget when buying an investment property. The financial side of a successful property investment is a balance between costs, income, tax deductions and how they affect your overall cash-flow. The costs to factor in may include the following:

Initial costs

Deposit
Loan establishment fees
Lenders’ mortgage insurance (if you have less than 20% deposit)
Stamp duty (calculators are available here)
Conveyancing and legal fees
Building and pest inspection reports
Quantity Surveying fees – to create your Depreciation Schedule for the fixtures in the property, so you can maximise your tax deductions (after purchase).

Ongoing costs

Rates/government taxes
Insurance (including landlords insurance)
Mortgage repayments
Body corporate fees
Utilities not paid by the tenant
Property management fees
Repairs and maintenance costs.

Step 4: Do your research

The key to buying the right investment property is to spend plenty of time researching. Property investors usually focus on two key financial returns – capital growth potential (which is the growth in the property’s value) and rental yield (the income the property will generate from the tenants).

These factors are driven by supply and demand, so try to find a property that will be in high demand by tenants and future potential buyers. Ask us for assistance with the right property market data to inform your property searches.

Once you’re set on a property, be sure to organise building and pest inspections. You’ll want to know that the property is structurally sound and free of unwanted guests before making an offer or going to auction.

Step 5: Finalise your finance

The final step when investing in property involves us helping you secure an investment loan that suits your financial circumstances and goals. Ask us to get you pre-approval on a loan for the specific property you want to buy before you make an offer or buy it auction, so you can have a realistic ceiling price to work with during the negotiations.

This step is the most important one of all if you’re buying at auction – you will be required to put your deposit down on the spot and it is not refundable if the lender does not agree the property is worth the price you paid and won’t lend the amount you need to complete the purchase. If you are buying under offer, we recommend you include a ‘subject to finance’ clause in the sales contract, to cover this contingency.

If you’re thinking about joining the thousands of Australians building wealth for the future through property investment, don’t wait to give us a call. Our mortgage brokers and property investment advisers will help you develop a fantastic property plan. We are here to give you expert guidance about investment loans, structuring and finance.

This article provides general information 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 loan product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. All loan applications are subject to lenders’ terms and conditions, and eligibility criteria. Lender fees and charges will apply.

The post Guide to Investing in Property appeared first on Focus Property Wealth - Perth Mortgage Broker.

Should I buy an investment property?

glennadmin — Thu, 22 Feb 2018 02:53:25 +0000

To buy an investment property in 2018, or not to buy? With more than 15% of Australian taxpayers owning at least one investment property, it’s a big question on many people’s minds right now. So, what’s the answer?

Last year saw some major curveballs thrown to property investors, which may have left you wondering whether owning an investment property is the best way forward. These changes included the tightening of controls on banks for investment lending by APRA, particularly for interest-only loans, changes to negative gearing laws, and there was a slowing capital growth trend in some parts of our property market throughout the year. This has led to some questioning if they should buy an investment property in the current climate or not.

But despite these uncertainties, if you are in a good financial position, right now could be a good time to invest in property. Here’s why.

National rents are on the rise

Deciding if an investment property is a viable investment often depends on the rental market for the property. For many investors, this is more important than how quickly the property makes capital gains. The good news is that rental rates are on the rise, according to the latest CoreLogic Rental Report. It found that over the December quarter, all capital cities except Canberra experienced a higher annual increase in rents over the past year, compared to the same period for 2016. The same was true for regional markets. If the rent covers the expenses and generates cash-flow, you should be in a good position to hold on to the property until its capital growth value meets your target for selling.

There is less competition amongst investors

In the past, foreign investors gave a lot of competition to local investors which has tended to drive up prices. Sales in new developments are now capped at 50% to foreign investors – and investors are only permitted to purchase new build properties if they are a permanent resident of Australia. This could potentially leave the market open to opportunity – particularly to those prepared to invest in established homes. What’s more, further penalties may apply to foreign buyers if they leave their investment properties vacant.

Savvy investors could come out well ahead

If home values in the market you are considering are slowing, you may have more capacity to negotiate the price with the seller and perhaps snap up some bargains. According to CoreLogic, previous downturns have seen the annual number of sales fall by around 20-25% from peak to trough, and with fewer buyers in the market, sellers may be more willing to drop their price. At Focus Property Wealth we utilise RP Data when helping out clients decide if they are going to buy an investment property.

Some markets are booming

Just because dwelling values may have declined a little in some markets, it doesn’t necessarily mean this will happen in all of Australia’s property markets. Some locations are still making excellent capital gains – the key is to do your research and find the right property in the right location. Take Tasmania for example – Hobart experienced double-digit value rises last year, ending at +11.5%!

Keep in mind that lenders are very specific when valuing a property. They make an assessment right down to the suburb, street and house. You should do the same. Consider the capital growth potential and the rental market.

A fall in prices won’t spell disaster if you get your finances right

Whilst analysts are expecting a general slowdown in national housing market conditions in 2018, the beauty of property investing is that you can usually weather the storm (if there even turns out to be one). Experienced investors know the property market will always fluctuate – so being in control of your finances so you can control when you sell is key. A good loan strategy is just as important as your buying strategy, so talk to us about your finances to ensure you’re in a secure position before you make your next move.

We can help!

In a softening market, a savvy property investor will take a longer-term approach. It’s important to be aware that if you are taking a short-term approach to property investing, falls in home values are more likely to affect you. If you’re planning to renovate and sell or flip properties quickly, you should be careful about the costs involved. If the value of the property should fall, you could potentially make a loss, so talk with us about these costs before you get started.

As your mortgage broker, we’ll help you crunch the numbers and make informed decisions, then line you up with an investment loan that suits your individual needs. Property investment is still a reliable way to grow wealth - interest rates remain near historical lows and if needed, you can still access competitive interest-only loans with our help, so when looking to buy an investment property please get in touch today!

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.

Source:
https://www.corelogic.com.au/resources/

The post Should I buy an investment property? appeared first on Focus Property Wealth - Perth Mortgage Broker.

Investment Archives - Focus Property Wealth - Perth Mortgage Broker

Redraw vs offset: what first-home buyers should know

If you’re planning to buy your first home this spring, you’re not alone. It’s one of the busiest times in the property market, with more listings and more competition. That’s why it’s important to be well prepared.

What is a redraw facility?

What is an offset account?

Choosing the right loan features

Planning to buy this spring?

Buying an apartment vs a house as an investment

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.

Pros of investing in an apartment

A more affordable entry point

Fewer maintenance responsibilities

Certain expenses can be more affordable

Potentially higher rental yield

Cons of investing in an apartment

You may need to pay strata fees

There may be restrictions

Oversupply can affect your investment

Want to discuss your finance options?

Ready to get started?

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

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?

Why do people choose to rentvest?

What to know before going ahead with rentvesting

1. Potentially smaller deposit, but fewer government perks

2. There are ongoing costs to factor in

3. Investor loans could come with higher interest rates

4. There will be tax implications

Like to know more?

Ready to get started?

Refinancing your home loan: how does it work?

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!

Step 1: Work out your financial goals

Step 2: Compare home loan options

Step 3: Submit your loan application

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

Step 5: Start making repayments

Ready to get started?

Ready to Dive In?

Ready to get started?

Smart Investing for the Budget-Savvy

1. Unlock Your Home’s Potential Through Equity

2. Think Beyond the City

3. Two Heads Are Better Than One

4. The Off-the-Plan Route

Ready to Dive In?

Ready to get started?

Smart Investing for the Budget-Savvy

mortgage prison how can you escape it?

Stuck in an expensive home loan and feeling trapped?

What is mortgage prison?

What is the serviceability buffer?

Why are more people landing in mortgage prison?

How we can help

Mortgage Prison

How your HECS-HELP debt affects your borrowing capacity

Do you know how much you owe on your HECS-HELP debt?

What is HECS-HELP?

How do you find out how much your HECS-HELP debt is?

Do you pay interest on a HECS-HELP debt?

What does this have to do with getting a home loan?

Paying off your HECS-HELP debt

What about voluntary payments?

Bottom line

Additional Resource https://www.realestate.com.au/home-loans/guides/can-you-still-get-a-home-loan-with-hecs-help-debt

How to manage your own investment property

How to manage your own investment property?

Familiarise yourself with the law

Prepare the paperwork

Set the rent and list the property

Find quality tenants

Get the ball rolling

Respond to repair requests

Don’t forget inspections

Ready to become a landlord?

Guide to Investing in Property

Step 1: Talk to us about your borrowing power

Step 2: Formulate an strategy when investing in property

Step 3: Set your budget

Additional Resource
https://www.realestate.com.au/home-loans/guides/can-you-still-get-a-home-loan-with-hecs-help-debt

Source:
https://www.corelogic.com.au/resources/