If you have any other debt which isn’t tied to an investment purpose, keep your future IP debt as interest only and instead pay the ‘extra’ amount you would otherwise be paying into that debt. This will result in the same amount of debt reduction with your total liabilities whilst ALSO providing greater tax benefits.

Fundamentally locking in rates isn’t about gambling on the variable vs. fixed pricing – but the long term certainty in your interest costs. The 5yr fixed is certainly cost effective at this time, and if you’re happy with the long lock in period (double edged sword) then it can be a prudent measure.

I’ve certainly noticed a *large* pick up in…[Read more]

You need to provide security to borrow funds. One way is to do an equity access against a property which has sufficient equity and then use those funds to make a purchase. Nice and simple – but requires you to have the funds available.

Except if you look at the data provided, capital growth year on year is tracking above year on year rental growth.

Every market provides examples – Sydney has skyrocketed, but increased rental supply has tempered prices, Perth has hit the top of a boom which pushed a rapid expansion in rental supply, so rents have caved in whilst prices increase.…[Read more]

As Terry said, it’s quite simple to add a spouse to a title – the real question is whether this is necessary and effective in helping with your goals moving forward, or just increasing risk exposure.

Just another second tier spruiker company by the sounds of it then. As always a great acid test is to ask them to suggest houses which are not brand new/OTP. See what reaction they give you.

Restumping/repairing foundations can be quite expensive, I wouldn’t be relying on an agent saying 5k. I’ve seen quotes of 25-30k.

Something more important to touch on is that there are MILLIONS of houses in Australia, and many of those are A-Grade. So you have to ask yourself, why pick up a dodgy C/D grade investment when there’s plenty of fine…[Read more]

Why do rents need to follow at all?

Gross rental amounts are completely divorced from asset prices – generally they will track 2-4% increases, where capital prices can go anywhere.

Example: Sydney has had a 5 YOY growth avg of 3.1%. In the same period Sydney has experienced over 30% capital growth.

Yields vs capital prices graph for the last…[Read more]

Why do you think rent increases track capital growth rates Dean? There’s no historical evidence of this, and they are impacted by very different market forces.

Same thing goes for private landlords however. I’ve seen many a private rental agreement which was 30-40% under-market because the private landlords didn’t keep track of the market, or were too soft to increase the rents in line with market expectations.

But the essence of it is correct – keep your rents at market to stop a patchy market.

One option is to put down 10% instead of 20, cop the LMI and then offset the balance of funds. Put the loan as interest only with an offset account and make the equivalent extra principle portion payments into the offset. Once you are ready to buy another house to live in and make the current property an investment, draw the offset funds out as…[Read more]

Agreed. Any decent lender worth its salt is pricing just as competitively for a single loan/vs multiple – it’s all about the $$$ volume.

Just about all take on new entrants, but you will need to be mentored – you generally go through the same aggregator as your mentor.

Population size, employment stats, employers in the area – you don’t want a one horse town. Population growth stats are extremely important, as you don’t want to buy in a town losing people, as vacancy rates will rise and rents soften.

Do take note though, there are CF+ investment properties in metro city capitals. Adelaide is a prime hunting…[Read more]

Even then, using the least favourable servicing lenders first will leave you in a spot of bother. As most borrowers don’t have endless cash funds available for purchases, or a singular chunk of equity to start off with to build their entire portfolio they are reliant on accessing their equity to buy further properties. Starting at the lowest end…[Read more]

There may be a passing on of costs to a degree, or absorbed into the bottom line – it largely depends on the supply/demand equation as always.

I do believe this policy would certainly place strong upward pressure onto prices as credit availability would balloon, especially for FHBers.

I honestly doubt $1200 will created a noticeable increase in…[Read more]

Same with all the buyers agents I know, fixed fee or tiered depending on the price range (a tad different finding a property in the 2.5mil range than a 300k property).

Really dependent on the frequency of property changeovers. SA has extortionate stamp duty charges, so a 600k property would take 22 years for the stamp duty to be cheaper than the proposed land tax charges. When you consider that the frequency of buying/selling/upgrading/downgrading, a lot of people can actually be better off.

Individuals at…[Read more]

Some lenders will allow you to extend your interest only period through a simple call/email/form which you may here referred to as ‘tick and flick’, others will require an internal refinance. If they won’t allow an internal refi to give an extension, there’s always other lenders.

If the industry moved to fee consult over commission system, net result would likely be a reduction in people using brokers services in favour of direct to branch.

This would result in a reduction in competition on rates and products.