Disclaimer.This newsletter does not necessarily reflect the opinion of the publisher or supplier. It is intended to provide general news and information only. While every care has been taken to ensure the accuracy of the information it contains, neither the publishers, supplier, authors nor their employees, can be held liable for any inaccuracies, errors or omission. Copyright is reserved throughout. No part of this publication can be reproduced or reprinted without the express permission of the publisher and supplier. All information is current as at publication release and the publishers or suppliers take no responsibility for any factors that may change thereafter. Readers are advised to contact their financial adviser, broker or accountant before making any investment decisions and should not rely on this newsletter as a substitute for professional advice. We are committed to protecting your privacy. We use the information you provide to assist you with your credit needs, including the preparation and submission of loan applications. We also use it to send you product information and promotional material. From time to time this will include direct marketing communications but we will always give you the option of not receiving these communications. We do not trade, rent or sell your information. Our Privacy Policy contains information about how you can access and ask us to correct your information, or make a privacy related complaint. You can obtain a copy by contacting us directly.
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Welcome to our November newsletter
We hope you picked a winner on Melbourne Cup Day last week! We’ve now moved into the busiest time of year in our property markets, so we hope you’re ready to handle the pace this spring.
At its 2016 Melbourne Cup Day meeting, the Reserve Bank of Australia (RBA) decided to keep the official cash rate on hold at 1.5 per cent for November. The decision was widely expected by analysts and forward predictions are for no further RBA cash rate cuts in 2016. The RBA may not have cut rates this month, but you can. Many lenders have indicated that interest rate changes do not only depend on RBA changes to the cash rate, but also on other market factors and their actual costs. So if you’re a home owner and looking to refinance to save interest, call us regularly to check the latest home loan interest rate that is available for you. The RBA last cut rates in August and May this year, which brought the official cash rate to its lowest level in history. As a result, home loan interest rates are very competitive and the good news for home buyers and property investors is that it looks as though they will remain low for quite a while. That means buying conditions are great this spring. Property market activity is heating up, particularly in Melbourne and Sydney, with plenty of housing stock for buyers and investors to choose from. For the week ending October 30, Victoria held 727 auctions and achieved a clearance rate of 76%, whilst Sydney held a whopping 1309 auctions and achieved a clearance rate of 77%. Activity in other markets indicated that buyers are possibly being a bit more discerning about prices. Queensland held 417 auctions for the same period, which is quite high, however they only achieved a low clearance rate of 39%. South Australia held 179 auctions with a clearance rate of 69%, ACT had 93 auctions with a clearance rate of 70%, Western Australia – which is not a big auction market – held 75 auctions with a clearance rate of just 37%. Northern Territory only held 6 auctions with a clearance rate of just 17% and Tasmania 10 auctions with a clearance rate of 33%. Rises in home values appear to have slowed across all markets during October. In Sydney, home values only rose by 0.62% and in Melbourne, they rose by just 0.78% despite strong activity from buyers in both of these markets. Brisbane/Gold Coast showed an increase of 1.10%, Perth 0.78%, Darwin 2.20%, and Canberra 0.40%. Adelaide showed a decrease of 2.39% as did Hobart, which showed a decrease in home values of 2.05% for the month. Opportunities are plentiful for first home buyers, next home buyers, refinancers and property investors right now. We’re here to help you make the most of low interest rates and the excellent spring property buying conditions, so please give us a call to chat about your plans. We’ll help you get the right home loan for your needs, with the most competitive interest rate available for you from Australia’s leading lenders. Christmas is also approaching fast and if you’re looking to buy a big ticket item for yourself or your family, we’ll be happy to help you with your finance needs for that too, so please give us a call today. We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains 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. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply. Information sources: Auction results: www.realestate.com.au. Home values: www.corelogic.com.au
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8 tips for investing in interstate property
Success in the property investment game relies on your ability to locate and purchase exactly the right property for your budget and buying strategy.
If you live and work in one of Australia’s major capital cities, you are probably finding this task increasingly difficult in your local market as both prices and competition continue to increase. The answer may be to look further afield. Australia is made up of many different property markets which work together to provide property investors with a full range of investment choices. And diversifying your assets across interstate markets could help you to minimise your risks and maximise your capital gain and income potential. Here are eight tips for making successful interstate property investments to help you build wealth for your future. 1. Do your research. Whether you’re investing interstate or locally, thorough research is vitally important. You need to become fully familiar with the market you buy into to be confident about your purchasing decisions and avoid expensive mistakes. Your research should cover four basic steps: Step 1: If you are considering investing interstate, start by researching all the markets across Australia to find which of them provide areas with properties that generally meet your budget and buying strategy, then compare these with each other until you have just a few that you find attractive. Step 2: Once you have located an interstate market that may be suitable for your investment, research it carefully to identify a general location within that market that meets both your affordability level, rental yield and capital growth objectives. Step 3: Research the streets and properties within the area you have identified to pinpoint an opportunity to make your property purchase. If you need help formulating a buying strategy, call us for a chat. Step 4: Research the individual property you select very carefully before you put down a deposit or go to auction. Get building and pest inspection reports together with a comprehensive condition report so you can make an accurate projection of your costs of ownership, including maintenance planning and potential depreciation tax deductions. 2. Buy with your head and not your heart. Don’t dismiss an interstate location simply because you wouldn’t want to live there yourself. Some investors also make the mistake of choosing a property investment location because it is their favourite holiday destination or somewhere they’d potentially like to retire one day. Always remember that choosing an investment property is a business decision and you should base your decision on potential investment returns, not on personal preferences. To choose a profitable location for your property investment, always focus on the numbers and research data. 3. Visit the location. Travelling interstate to view investment opportunities may be inconvenient, but no matter what you may hear from other investors, buying a property sight unseen could be risky. Take the time and effort to at least visit the location. You may be able to claim the travel costs as a tax deduction (but talk to your accountant first). If you can’t stay there long enough to locate, inspect and buy a property yourself, then consider interviewing a local buyer’s agent while you are on your initial visit. This will allow you to quickly engage a trustworthy representative to help you in case you can’t get back there yourself when you find the right opportunity. 4. Partner with a good property manager. Whilst you are visiting the interstate location, it is also a good idea to identify a good property manager in the area and engage their services as well. Managing a property from interstate is not easy and may cost more than you anticipate in travel and expenses. Property management costs are usually tax deductible for most property investors, so ask your accountant if the numbers stack up to allow for a property management company to be included in your budget for the interstate property you are interested in purchasing. 5. Line up a local conveyancer. Whilst it is possible to use your regular conveyancer or solicitor to help you purchase a property interstate, the costs may be higher than using a conveyancer that is located near to the interstate property you wish to purchase as their expenses to complete the process may be greater. Conveyancing rules, regulations and practices also differ from state to state and your usual conveyancer may be unfamiliar with these differences. Ask us if you need assistance locating an interstate conveyancer. 6. Note the different legal requirements. Each state has different legal requirements for the purchase and transfer of properties. If you are buying interstate you should talk with a qualified conveyancer or solicitor to make yourself aware of differences in:
7. Research the costs. Stamp duties, land taxes and other government costs like transfer fees vary from state to state. Council rates can also be widely different from one location to another and you may be surprised by how much. When purchasing interstate, it pays to research these costs well ahead of time so that you can factor them into your budget and avoid funding or cash flow difficulties. 8. Talk with your mortgage broker early. Good credit advice when investing in property is critical to your success as an investor. Getting pre-approval on a loan for a purchase in a specific location is not only a good idea for budgeting purposes, it will make you aware of any postcode or location restrictions imposed by the lender on the area you are considering. Some lenders impose these restrictions on hundreds of locations around the country to minimise their risk of loss. Where you buy can have a significant effect on how much money a lender is prepared to let you borrow, so it pays to talk to us early about your purchasing plans. We’re here to help you get things organised if you’re planning to invest in property interstate. Just pick up the phone and give us a call to discuss your plans, we’ll be happy to help you get the ball rolling.
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5 ways to make settlement day stress-free
Next to your wedding day perhaps, settlement day on your first home is likely to be the most exciting and stressful day of your life.
It not only brings an end to the hard work and perseverance it takes to save your deposit and find the home of your dreams, it marks the beginning of your new life and your very own happily ever after. But how can you stop yourself from biting your nails to the quick on the day the vendor hands over the keys? Here are 5 tips to make your settlement day go smoothly. Tip #1. Get a good conveyancing solicitor. Property settlement is the legal process of transferring ownership of a property. In order to make it go as sweetly as possible, you should engage the services of a reputable conveyancing solicitor well ahead of time and ask them to explain the regulations and procedures required by the government in your state. During the settlement process, your conveyancing solicitor will complete the following tasks:
Tip #2. Check the details in your sales contract carefully. The sales contract you sign when you agree to purchase the property is a wealth of information and very important to settlement day. It’s a good idea to get your conveyancing solicitor to check it before you sign or put down your deposit so that you are sure it provides all of the required information. Your sales contract should outline all of the conditions of the sale, what is included in the sale, what actions are required to complete the sale, the schedule for completing these actions and who is responsible for completing them. If you show your sales contract to your conveyancing solicitor before you sign it, you can ask questions about anything you don’t understand. Tip #3. Get your finance in place before you sign the sales contract. Settlement day is the big day when your mortgage comes into effect and your chosen lender pays the money to the vendor. To ensure your settlement day goes according to plan, it’s vitally important to get the timing right on this transfer of funds. During busy periods, it can take several weeks for a home loan to be approved by some lenders. If you don’t want to limit your choices to the few lenders who are able get your loan through according to the timing on your sales contract, then it’s a good idea to talk with us and check the turn-around time a lender will need to process your loan before you sign the sales contract, so you can make sure it allows enough time. You should also bear in mind that any other government fees, charges and duties must also be paid on settlement day. Just ask us and we’ll help you calculate these costs. Tip #4. Get insurance and do a property inspection. A lot can happen to a property in the time between signing the sales contract and collecting the keys. It is likely the property will be vacant during this time and to ensure there are no break-ins, thefts, storm damage or worse, you should include a clause in the sales contract allowing you to inspect the property just prior to settlement day to see for yourself that everything is still in good order. To make sure you’re fully covered for any insurable event, it is also a good idea to take out insurance on the property when you sign the sales contract. It is not a good idea to trust the vendor to keep the property fully insured until settlement day. Insuring it yourself could save you money and trouble if something should go wrong, so don’t forget to ask us if you need help organising some cover. Tip #5. Set your moving in date a few days after settlement day. Delays can happen on settlement day, no matter how carefully you plan. People can miss meetings or take the day off sick, cheques can be held up, even the weather has been known to throw up unexpected obstacles to make completion impossible on the set date. We recommend that on settlement day, you find a relaxing place to wait for the news that settlement has been successfully completed and to receive the keys. If you plan to move into your dream home a day or two later, you’ll have the time to sit back and enjoy the experience of becoming a new home owner before you need to do the heavy lifting required to actually get your stuff in there and start living happily ever after. As your mortgage and finance broker, we’re here to help you make sure that you can complete the purchase of your new home with as little hassle and stress as possible. Ask us to help you get pre-approval on your home loan, and if you need a referral to a good conveyancer, we’ll be happy to help with that too.
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