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Finance Detective

Tips to getting started on the investment property ladder…

Start by paying off any high interest consumer debts (credit cards, car loans etc). There would be no point earning 5%+ pa on an investment if you are paying 15%+ on credit card debt. Set up automatic deductions from your salary to accelerate repayments. Continue the salary deductions alter your debts are paid off. This extra cash could fund ongoing costs for a negatively geared property. Start small and don’t over extend yourself. Look for affordable properties in popular rental areas. Aim for rental income per year of 4%-5% of the property value. Your first property could be an investment. …

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Positive vs Negative Gearing

What investment strategy is right for you? When can a negative be beneficial? When It makes you money of course. When considering any good investment be it property, shares or cash, the main aim is to generate a return in the form of income (sometimes called yield), a capital gain or a combination of the two. Some investment properties may have a high income return while others may have low income with the potential to generate a high capital return. It is always important to consider the total return from your investment (being the addition of the income and capital …

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Using the equity in your home to purchase an investment property

If you are already repaying your own home or another investment property, you may be able to use the equity you have built up to purchase an additional property. Let’s use an example to explain this process. Your lender is going to require that the loan amount is less than 80% of the value of the property unless you want to pay lender’s mortgage insurance (LMI), so to keep things simple we will assume that you can only borrow 80%. From our example above, you have $250,000 sitting in your home loan that could be used to purchase an investment …

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Are you a Property Optimist?

While Australian investors have a lot to be optimistic about in 2017, the property pessimists will be out there looking for their typical excuses as to why it’s still not a good time to invest. Now, we don’t have a crystal ball and we’re not economists, but it appears that there are many indicators to suggest that interest rates are likely to remain low for a while. What happens in a low interest rate environment? Low interest rates encourage homebuyers and investors into the property market and also allow current home-owners to pay off their mortgages more quickly. We all …

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Budget boosts savings for first homebuyers

It’s not all bad news for first homebuyers… On the 9th of May the Australian Government handed down the 2017/18 budget. It brought some big changes which affect first homebuyers. Most first homebuyers are familiar with the First Home Owners’ Grant, a one-off payment of $15,000 when purchasing a new home. However, after the end of June 2017, the grant drops to $10,000. While this might sound like a blow to all the first homebuyers struggling to break into the market, it’s not all bad news. While the First Home Owners’ Grant will be lower than previously, the government has …

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How can we improve our ‘financial communication’?

Money has meaning beyond the numbers on a page or notes in your wallet. As it is strongly linked to our sense of security and self-worth, a lack of communication and compromise about money can be one of the main causes of relationship problems and breakdowns. If you and your partner argue about money, you’re not alone. See below for some helpful hints on how to avoid the relationship problems caused by money matters. 1 – Discuss your differences Spender or saver – which one are you? Some like to spend their pay before the end of the month and …

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You don’t need to be wealthy to invest…

…but you do need to invest to be wealthy. If you think you have to be wealthy to invest in property you might be mistaken! In fact the skills and experience you’ve gained managing a budget on a lower income could make you a better property investor than some big spending high income earners. We often meet people who are hooked on the good life: living in expensive suburbs, driving fancy cars, frequently dining out and taking overseas holidays. Many will have built their wealth through a successful investment strategy but you may be surprised to find out how many …

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Take control of your credit card debt

Is your credit card debt spiralling out of control? Are you struggling to cope with multiple credit card repayments? Don’t worry, you’re not alone. According to research, around 70% of Australians have credit cards, that’s more than 16 million credit cards throughout the country, as of January 2017. The average credit card debt is around $3000, but the national credit card debt is huge, at over 32 billion dollars.1 While many Australians are successfully managing their credit card repayments, many would like to gain more control of their current debt. Debt consolidation could be an option, but how does it …

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Identifying a good investment property

Most of us have heard the saying ‘Location, location, location’, but have we thought about what It actually means? Is It the only factor when considering buying an investment property? Location, location, location There is no doubt that location is one of the most important factors in determining a good investment property. It influences your ability to attract good quality tenants and provides the opportunity for long term capital growth. Tenants are generally attracted to locations offering: good access to public transport (trains, buses, ferries etc), close proximity to local shopping facilities, and access to amenities such as schools, hospitals …

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Don’t Move…Improve! Our Top Tips to Add Value to Your Home

Dreaming of a better house for your family but can’t face the prospect of moving. You are not alone. The main reasons that people stay put are: The financial costs of selling – e.g. agent fees, stamp duty etc. The hassle of moving. Not getting the right price due to market conditions. So don’t move… Improve! Quality renovations undertaken on your home can bring a new lease of life to your property, as well as adding thousands of dollars to its value.  It makes financial sense to invest in your property and to later reap the rewards. If you have …

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