Loan options 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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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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Credit Report 101: A Beginner’s Guide

glennadmin — Thu, 22 Jun 2023 06:51:51 +0000

Have you ever wondered how lenders decide whether to grant you that coveted home loan? Your credit report holds significant importance in their decision-making process. Think of it as your financial report card, showcasing your payment habits and borrowing history.

Since the introduction of the Comprehensive Credit Reporting (CCR) rule in 2019, your credit report has become even more important. In this article, we’ll break down what you need to know about credit reports and explain why your credit score plays a crucial role in your journey towards homeownership. Let’s dive in!

What is a credit report and why is it important?

A credit report summarises your credit behavior and financial profile compiled by credit bureaus. It includes your credit score, credit products, repayment history, personal information, defaults, credit applications, bankruptcy records, and credit report requests.

Lenders use this report, based on factors like credit applications, debt, repayment history, and bankruptcies, to assess your creditworthiness. A higher credit score shows the lender that you are a less risky borrower. This, in turn, improves your chances of getting approved for a loan and could even result in a better interest rate.

In some instances, a credit report can contain a false or incorrect entry. That’s why it’s so important to check yours regularly.

If you’d like to access your credit report, please get in touch.

Can you get a mortgage with bad credit?

Despite having bad credit, obtaining a mortgage is not impossible. Here are some steps you can take:

Verify your credit history: Ensure your credit score’s accuracy by checking for any errors or signs of fraud/identity theft. If you come across any inaccuracies or outdated information, simply contact the credit reporting agency and request a correction. This is a free service.
Consult a mortgage broker: Mortgage brokers can help you explore loan options tailored to your needs and guide you through the application process.
Approach a specialist lender: Certain lenders specialise in ‘bad credit’ home loans, considering personal circumstances that may have affected your ability to repay in the past. A mortgage broker can help you find a specialist lender if this appeals to you.

Bad credit home loans often come with less favourable terms due to the higher risk for lenders. This could mean higher interest rates and fees. It might be wise to improve your credit score before borrowing to access more competitive loan options.

Tips to improve your credit score

To secure a favourable home loan, improving your credit score is crucial. Here are some key tips:

Manage credit card balances: Keep balances low and within the credit limit. Pay off balances in full or more than the minimum payment.
Use credit responsibly: Avoid maxing out cards, make timely payments, and don’t take on excessive debt.
Limit new credit applications: Apply only when necessary to avoid numerous hard inquiries.
Review your credit report: Regularly review for changes or errors, promptly reporting discrepancies. Seek assistance from financial counsellors for guidance and support in managing finances.
Pay your utility bills on time: Late payments can harm your credit score. You can automate payments to ensure timely transactions. It showcases responsibility and avoids late fees.

By following these tips and maintaining responsible credit management, you’ll improve your credit score and enhance your chances of securing a first home loan.

Your next steps?

If you’re considering a home loan but need to improve your credit, give me a call. We can work with you to find finance suited to your needs.

To talk through your options, get in touch today. We’re here to support you and ready to address any inquiries you may have.

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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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.

The post How to manage your own investment property appeared first on Focus Property Wealth - Perth Mortgage Broker.

Loan options 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

Home Settlement Process – What you should know

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

What is settlement day?

What happens on settlement day?

How to prepare for settlement?

1) Be organised with the paperwork.

2) Complete a pre-settlement inspection

3) Organise insurance

Ready to get started?

Credit Report 101: A Beginner’s Guide

What is a credit report and why is it important?

Can you get a mortgage with bad credit?

Tips to improve your credit score

Your next steps?

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

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