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Finance Detective

Why get a property valuation?

The main purpose of obtaining a property valuation report is to gain a professional and unbiased analysis of a property’s current value in a competitive market, but it can yield much more information than just one final number.  Often, the report will include a list of maintenance issues which require attention and could even give suggestions of building improvements which would add value to the property. If it is a property that was purchased many years ago, updating the ratio of your equity in the property versus it’s assessed market value may allow you to renegotiate your financing terms in …

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Where has the year gone?

Where are we going? If you decide to go on a week’s holiday you wouldn’t normally just jump in the car and take off, would you? You would need to consider many things before leaving: Where do you want to go? Where to stay? Availability of accommodation? What to take with you? How much money is required? Who will collect the mail? …and the list goes on. If you don’t consider these points it is likely many things will go wrong, from taking the incorrect clothes to failing to finding suitable accommodation. A lack of planning will impact on the …

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Steps to successful property investment

Property has been considered a popular path to wealth for Australians for many years. It has the Potential to generate capital growth (an increase in the value of your asset) as well as rental income. There are also tax advantages associated with negative gearing. However, when buying an investment property, it is wise to remember that you are making a business decision and its worth taking the time to plan. Do your homework You are not buying from the heart, but from the head, so it is important to assess your current financial position. What are your cash reserves and …

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You may already have what it takes to be a good property investor

…and it’s not necessarily a six figure salary! Did you know that your skill and experience in managing a tight budget 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, fancy cars, frequent dining out and overseas holidays. You’d be surprised however, at how many don’t have adequate savings for retirement or redundancy, let alone a solid investment plan. Income earners on five figure salaries are often the ones who knuckle down and save. Careful budgeting and discipline, coupled with …

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Is a bank valuation holding you back from your dream home?

For many, owning your own home is still the definition of the great Australian dream. We crave the security, desire the lifestyle and long for the freedom that comes with home ownership. But applying for a loan isn’t always easy. There are plenty of hoops to jump through, and organising a bank valuation is just one of them. What is a bank valuation? If you apply for a home loan it’s standard practice for lenders to request a valuation of any properties you own, and in most cases, you don’t get to choose who carries out the valuation, it’s done …

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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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