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Property investment ...

?????????????????? For many investors, starting the journey of money making is a nerve-wracking process. The global market has an endless supply of new projects, markets and shares that can be invested in but how do you know whether it is going to stay stable and return finances to you? Is investing a gamble? Would property be the safest way to invest?   By looking at the history of a market you will see patterns and properties that show whether or not it will be worth it for you in the long run.   So, Is investing a gamble? How do I know if my chosen investment is a good investment?  Good investments will typically have two features. 1. A high capital growth. 2. A secure income, indexed for inflation.   While these properties are hard to control or predict when first buying an investment, it should be noted that over decades, property has maintained both these attributes.   Property in Australia has maintained Read more

Tips to becoming wea...

Becoming wealthy is possibly with a plan for what your earning today! There is a huge misconception in society today: the idea that, in order to become wealthy, you must first have a wildly high-paying job. Unless one invests and cultivates their finances well, the reality is a six-figure salary will only go so far. People, regardless of their wage, tend to always live beyond their means. Still, we live by the equation that a six-figure salary = a two story house, with a pool and a spa, and a car and a boat and a family holiday at the end of each school term. (Sound’s great, right?) It doesn’t take long for these ‘wealthy’ people to be living off borrowed money.   Wealth is the equation: Assets minus Debt = NET worth. And our net worth is able to be increased purely through valuable investments, regardless of our wage. Time-and-time again we see people come into wealth in ways that defy the status quo because they invested with Read more

Long Term Property I...

Long Term Property Investment Have you noticed that Doctors continually stress that quick-fix diets won't sustain weight loss? Their maxim is that a healthy diet and exercise is the only way to maintain weight. Still, each year, the fitness market rolls in billions on fad diets because we live in a society that wants to see results now! Funnily enough, the same goes for building and sustaining wealth. Investing is a process, built over time using key principals. Thinking 'long term property investment' is paramount to being a successful investor and becoming wealthy. Rather than seeing yourself living in your dream house and driving your dream car in your 20's or 30's, a simple change of mind-set and a plan, could be all you need to see yourself retired early and living the life you've dreamed of. Overnight riches seldom results in increased wealth because often the individual doesn’t have a plan for the money and Read more

7 Reasons to Buy an ...

australian investment property If you are an overseas investor and are looking into buying an Australian Investment Property then it's good to know about some of the real strengths of the Australian Property Market. Apart from the fact that every block of land comes with a free Kangaroo and a cuddly Koala Bear (this may or may not be true :-)) what you really want to know is whether or not you are buying into a strong nation where your money is safe! 1. Australia has Strong Population Growth We are growing at 1.4% through a mixture or births and immigration. This means there is always an increasing demand for houses. Demand means your house will tenanted all of the time. In Sydney for example its common for there to be over 50 enquiries for a single rental property. There are cars parked up and down the street. it's quite a sight to behold! 2. Australia's Read more

Investment Finance: ...

investment finance In order to qualify for a mortgage for your first investment property you need to have an income and a deposit. Investment finance sounds simple, doesn't it? Well, sometimes it is and sometimes it isn't. What you need to know when it comes to Investment Finance: Income The beauty of an investment property is that you get a second form of income, Rent! However, you need a basic income to get you started. If you have a job, then a couple of payslips is often all you need to verify your income. If you are self employed, then you will need two years tax returns for yourself and your company if you have one, plus two years of financials for your company. You will destroy a rain forest in the process of providing those documents. Not impossible, just a bit more involved. As an investor you will also get tax breaks to assist you Read more

Investment Finance: ...

Investment FinanceIf I were to ask you the question. Can you afford to have a multi-million dollar company? I think the almost automatic answer would be Yes! However, if you stopped to think about it there would be some deeper questions to ask. Can I cope with problem employees? Can I deal with the stress of business deals falling over? How will I cope with a much higher income? In a very similar way owning an investment property will cost you money, time and mental/emotional energy. You will need to improve yourself in order to operate at a higher level. Here's some thoughts...   Owning an Investment Property will cost you Money Assuming you don't have the cash to go and buy one, you will need a lender. I could answer the question of whether you can afford an investment property within about 30 minutes. To get a loan we need to satisfy Read more

Getting Started with...

investingIf you have ever taken up a new hobby or sport you will know that you usually start off badly, or at least you know you aren’t particularly good at it. You also know that you are just beginning and that with practise and experience and patience you can probably grow a pretty reasonable skill. You may have innate talent and really flourish, or you may have small amount of ability and just grow in your skill and be able to play well and be comfortable with that. I expect investing in property is much the same. Don’t expect that you will land on your feet and be an instant Donald Trump. This is a journey of learning through successes and failures (gulp!)   The problem with failures is that you are dealing with an item that is worth hundreds or thousands of dollars and the downside risk is high! So… You Read more

Investment Finance

7 Reasons to Buy an ...

australian investment property If you are an overseas investor and are looking into buying an Australian Investment Property then it's good to know about some of the real strengths of the Australian Property Market. Apart from the fact that every block of land comes with a free Kangaroo and a cuddly Koala Bear (this may or may not be true :-)) what you really want to know is whether or not you are buying into a strong nation where your money is safe! 1. Australia has Strong Population Growth We are growing at 1.4% through a mixture or births and immigration. This means there is always an increasing demand for houses. Demand means your house will tenanted all of the time. In Sydney for example its common for there to be over 50 enquiries for a single rental property. There are cars parked up and down the street. it's quite a sight to behold! 2. Australia's Read more

How much deposit do ...

how much depositSo you are looking to buy your first investment property or perhaps trying to work out whether you can afford your second. The first question is often, how much deposit do I need to buy an investment property? Let me start by explaining that there are more ways to approach this than just saving up cash! Certainly saving up cash is a very good way to  go, but it can be tough depending on your circumstances. I will cover another few ways to get together a deposit. How much deposit do I need in Cash to buy an Investment Property? We need to be able to give the bank a minimum of 5% of the value of the investment property plus cover the other costs involved in purchasing a property. So what are the other costs? The main one is stamp duty, however you will need to allow for solicitors costs and Read more

Investment Finance: ...

investment finance In order to qualify for a mortgage for your first investment property you need to have an income and a deposit. Investment finance sounds simple, doesn't it? Well, sometimes it is and sometimes it isn't. What you need to know when it comes to Investment Finance: Income The beauty of an investment property is that you get a second form of income, Rent! However, you need a basic income to get you started. If you have a job, then a couple of payslips is often all you need to verify your income. If you are self employed, then you will need two years tax returns for yourself and your company if you have one, plus two years of financials for your company. You will destroy a rain forest in the process of providing those documents. Not impossible, just a bit more involved. As an investor you will also get tax breaks to assist you Read more

Will Interest Rates ...

interest ratesI have spent quite a bit of time explaining my rationale about predicting whether or not interest rates are going down in the near future. You can read my reasons here. Essentially it revolves around which direction fixed rates are heading. It's a little simplistic, however given that I don't have time to analyse the worlds economies and the staff at the banks do it for a living I am going to continue riding their coat tails. So, are interest rates going down next week? Interest Rates Going Down?   I think we are going to see rates stay put. A few of the lenders have their 1, 2 & 3 year fixed mortgage rates set at 5.99% Given that they have their discounted variable rates around 6.05% I think they are assuming things are probably going to stay still.   That's my guess, we will see what happens! There is another question worth Read more

Should you fix your ...

mortgage rateLots of the major lenders have their fixed interest mortgage rate set at 5.99% for 1, 2 and 3 years. This seems very enticing. But should you fix? Should You Fix Your Mortgage Rate? This is a highly personal question and depends on your risk profile, your current circumstances and your goals. However, 5.99% is quite a low mortgage rate historically, so it will well worth considering. I could possible even get you a lower mortgage rate with some lenders who are keen to get into the fixed rate market. If you would like more information please feel free to click contact us and I will have a more in-depth discussion with you. Article by James Parnwell ps. Please note that the above interest rates are only valid at the time of writing and can change at any time! If you would like some further information on anything related to Investment Property or Investment Read more

What are the right r...

mortgage ratesAussies are gamblers historically, its said we will bet on two flies walking up a wall if given the chance. There's a hell of a lot of flies in a Australia, so the opportunities for gambling are numerous! People ask me all the time, "Should I fix my interest rate? I want to minimise my payments over the next 3 years or so!" Careful! This is dangerous territory! Its a little like gambling with your $400,000 mortgage! If you win, you are the smartest and happiest person alive, if you lose... well... Ouch!  Why Fix Your Mortgage Rate Let me start by stating the worst reason to fix your mortgage rate. Don't Fix your Interest Rate to beat the Bank I know the temptation is there and i'm sure you know lots of people who beat the bank and saved on their interest mortgage rates. They love to tell you whilst cooking sausages on Read more

Investment Finance: ...

Investment FinanceIf I were to ask you the question. Can you afford to have a multi-million dollar company? I think the almost automatic answer would be Yes! However, if you stopped to think about it there would be some deeper questions to ask. Can I cope with problem employees? Can I deal with the stress of business deals falling over? How will I cope with a much higher income? In a very similar way owning an investment property will cost you money, time and mental/emotional energy. You will need to improve yourself in order to operate at a higher level. Here's some thoughts...   Owning an Investment Property will cost you Money Assuming you don't have the cash to go and buy one, you will need a lender. I could answer the question of whether you can afford an investment property within about 30 minutes. To get a loan we need to satisfy Read more

Interest Rate Drop.....

interest rate There is this funny psychology that makes us feel fantastic when we get a win. An unexpected interest rate drop, a winning horse in the office sweepstakes or even an extra M&M out of the vending machine. We must get a rush of some chemical to the head that makes us feel like Bill Gates all of a sudden. What does an interest rate drop really mean to your monthly budget? Precious little, I’m afraid, especially if you are a NAB customer. If you have a mortgage of $300,000 you will only have an extra $50 bucks. You will need more interest rate drops to really make a meaningful difference! Loan Amount Monthly Saving $100,000.00 $16.79 $150,000.00 $25.18 $200,000.00 $33.57 $250,000.00 $41.96 $300,000.00 $50.36 $350,000.00 $58.75 $400,000.00 $67.14 $450,000.00 $75.53 $500,000.00 $83.93 $550,000.00 $92.32 $600,000.00 $100.71   Honestly, the best advice I can give you is to put the Champagne back into the cupboard and leave the $50 in the loan as an extra repayment. Are you sitting down? No really! You need to be sitting down for Read more

Will Interest Rates ...

Interest rates In mid-September I predicted that we would get a rate cut. I got it right! Hooray! I would love to claim that I am extraordinarily clever that I can peer into the future and divine the mysteries of the universe. However, I am not and I can’t! I just follow a simple rule about watching where fixed mortgage rates are going. Read my article on how to tell where interest rates are headed to understand just how simple this is. So, the question you are all asking is, “Where are interest rates headed now?” Well, with variable rates at around 6.75% (if you are paying more than this you are paying too much) and three year fixed mortgage rates as low as 6.21% there can only be one answer. Down! The gurus in the back offices of the major lenders have factored in a rate dropped of another 0.5%! This is certainly Read more

Interest Rates Going...

Interest Rates Nothing makes the heart flutter and the knees quiver quite like the news that interest rates might be headed down again. We have bright imaginings of more money in the bank and spending it on having loads of fun. It would indeed be lovely if we got a rate drop by Christmas. So what is my one reason why I believe interest rates are on the slide? Interest Rates Fixed Rates are Going Down Huh? What does that have to do with variable rates going down? Well, I won't confuse the issue too much by boring you with information about money markets and the like. However, every bank in Australia has a team of people in a little room (my kids love Charlie and the Chocolate Factory, whilst it is inaccurate to describe these people as Oompa Loompas, it is mildly amusing) placing all the variables that could possibly indicate where the Read more

Investment Property

Investment Property ...

investment property cash flowHave you worked out your investment property cash flow? The first thing that people want to know is how much the investment property is going to cost and how much will it return. That should be the last question you ask. The first question you should ask is how much is this investment property cash flow going to be each week? If you’re wise and you plan to hold the investment property for the long term it’s the cost per week that will have the most impact on your lifestyle for that time period. Once you know how much the investment property cash flow is going to be, there are a number of different tax deductions and refunds that could leave you out of pocket as little as a couple of dollars each week! Here’s a hypothetical but realistic example of  the investment property cash flow of a property costing $525, 000 leaving the owner Read more

Is Spring the best s...

Is spring the best season to buy or sell property? The spring season is typically known to be the best time of the year to buy and sell property. However, there is a growing opinion that spring, while being the best time to buy, may not be the best time to sell. The reason is that spring usually sees a huge influx of properties on the market resulting in a possible oversupply. This is great for people looking at building their investment portfolio as there is a huge influx of properties on the market. There is a chance you may gain a bargain if somebody wants to sell quickly in the competitive market. In saying that, with a competitive listing market, you will also find a competitive buying market. Is Spring the best season to buy or sell property?  “If you’re looking to buy, buy in spring – but if you’re looking to sell, sell in winter,” says Sanderson of Smallacombe Sanderson Real Estate. Wealthfarm wrote a great Read more

Investment Property:...

non-cash deductionsKnowing about non-cash deductions may help you decide whether it will suit you better to invest in a new home or buy an old home and renovate! Deciding whether to buy old or new is a challenge for investors. Many assume that buying an older house and renovating will be the cheaper option, but this is not always the case. Of course, there are advantages to older houses. They are often on bigger blocks of land, they have character and are in established neighbourhoods usually with wider roads and completed landscaping. But there are also many advantages to buying new! What many people aren’t aware of, or don’t take into consideration when buying new, is the government's tax incentives. Non-cash deductions and other returns can be claimed by people who intend to MAKE MONEY from their property. “Research shows that 80% of Property Investors are failing to take full advantage of property depreciation and are missing out Read more

Investment Property:...

cut five years off your mortgage Last week's decision by the RBA to cut the official interest rate to 2.5 percent was helpful. However, reducing your mortgage takes dedication and smart decisions by you! Here are five ways to cut your mortgage! A mortgage is the biggest financial transaction you will encounter in your lifetime but doesn’t have to take a lifetime to pay off! Most home loans are planned by the banks and lenders to take between 25 to 30 years to pay off. This time period means that a huge amount of your repayments accumulate in interest and go straight into the pocket of your lender. The ultimate goal for all homeowners is to be paying the PRINCIPAL of your loan, not the INTEREST. Planning your repayments so that they chip away at the principal and don't just pay they interest could help you to cut as many as five years off your mortgage. Helpful ways to cut your mortgage Pay your mortgage fortnightly instead of monthly Planning Read more

Property Investment:...

interest rate cutThe Reserve Bank of Australia (RBA) today announced a record low official interest rate cut, this is sure to please homeowners and property investors around the country. The official decision to cut interest rates by 25 basis points, brought it to it’s lowest level since 1959 at 2.5%. Many Economists predicted the interest rate cut; saying that recent sluggish trading with China and pressure on the Aussie dollar would be the primary influence. However, Australian households saving more than 10% of their income as well as slower investing in the mining industry were the Reserve Bank’s greatest concerns leading toward them making the decision. Since November 2011, the interest rate has nearly halved in a series of RBA decisions. Official Interest Rate cut history since November 2011                   Nov 2011: 25 basis points to 4.5%                         Dec 2011: 25 basis points to 4.25%                         May 2012: 50 basis points to 3.75%                         Jun 2012: 25 basis points to Read more

Property Investment:...

Halifax 401In recent years over the fringes of Sydney, we’ve seen a great number of new property developments pop up, offering budget house and land packages with great incentives for investors. New developments such as Ropes Crossing, in St Mary’s, Jordan Springs, near Penrith and Gregory Hills, near Narellan, offer new house and land packages for as little as $230,000 with extra included incentives like builder paid stamp-duty and tax rebates. Investment Property Coach, David Ferguson from Sydney, said that the supply and demand for housing in the Sydney market is booming. This is a great opportunity for investors to snap up one of these packages as soon as they can. “It’s not uncommon for new house and land packages to go instantly,” said David. “In today’s market there’s just a desperate shortage of stock." At the moment there are 1,000 people per week moving into Sydney. Where are they going to live? There’s huge pressure to Read more

Investment Property:...

Property marketThe property market in Sydney is expected to rise by an average of more than 6% per annum over the next three years, according to BIS Shrapnel. Over the next three years, market analysts expect that prices will rise consistently, bumping up houses currently valued at $670,000 to $795,000 in 2016. The increase is a result of property demand in Sydney partnered with an improved affordability of housing thanks to low interest rates. This is great news for the current property market which has managed to stay reasonably stable through the global recession. While the recovery will be uneven among the states, particularly in 2014/15, the growth is encouraging for investors. Other major cities are also expected to see significant increase in their property market with prices in Brisbane expected to increase up to 17%, Perth 15% and Darwin 10%. Melbourne, Adelaide, Canberra and Hobart are expected to rise only 5% due to a recent Read more

Property Investment:...

residential equityResidential equity is a powerful tool for wealth creation.  If you are a keen investor, pulling out your residential equity and refinancing your mortgage can grow your property portfolio significantly. We've looked at ways you can best use your residential equity to safely build wealth and expand your investments. How do I calculate my residential equity? Organise to have your property valued and then subtract any debt remaining on your mortgage from the current value of the property.  Residential equity is not based on the original price of the property but instead on what you have left to pay off! This is an incentive to be making greater mortgage payments as it increases your equity! Be aware that sometimes the valuer can be wrong and the real market value of your property may not match what your valuer had initially advised. Capital growth also plays a significant part in how your equity grows. Diligently Read more

Investment Property:...

how to invest We know that property investment is a great way of building your finances so that you are able to retire comfortably. But what if you're already retired? Should you invest to make more or just sit back and learn to live comfortably with what you have? We discuss how to invest after retirement. We said in a recent blog that in order to retire comfortably, comfortably meaning to be able to afford to retire, you need to have atleast 1million dollars collectively in yours and your partners superannuation account. So if you've just set up your retirement plan with a good-looking 300,000 dollars, you might want to look at re-investing. The beauty of investing later in life is that you probably have already set yourself up financially and are in a position where you own your own home and have probably pulled out cash from previous investments. You've probably got a few 'wins' Read more

Investment property:...

Property Bubble Google ‘Australian property’ and the first websites to appear will discuss the idea of a property bubble in Australia.  The property bubble speculates that Australian property prices may currently be higher than their worth due to housing becoming an investment tool. Property professionals around the country say different things. While some property analysts will agree with comments that Australia may be the biggest property bubble in world and will “burst in spectacular style” (wikipedia), others say housing prices are true to their value. Economic bubbles are normal in global economic history and occur periodically depending on the speed that housing prices increase or decline in value. A property bubble will burst when factors that would normally determine value such as wages and taxes change dramatically. Using property as an investment tool doesn’t affect the market or put it into a bubble. Investing is infact helping to build the economy and helping to deal with Read more

Recent Article

Property investment ...

?????????????????? For many investors, starting the journey of money making is a nerve-wracking process. The global market has an endless supply of new projects, markets and shares that can be invested in but how do you know whether it is going to stay stable and return finances to you? Is investing a gamble? Would property be the safest way to invest?   By looking at the history of a market you will see patterns and properties that show whether or not it will be worth it for you in the long run.   So, Is investing a gamble? How do I know if my chosen investment is a good investment?  Good investments will typically have two features. 1. A high capital growth. 2. A secure income, indexed for inflation.   While these properties are hard to control or predict when first buying an investment, it should be noted that over decades, property has maintained both these attributes.   Property in Australia has maintained Read more

Wise Investing: Maki...

wise investing There are always excuses for people not reaching their full potential financially. One BIG excuse is a lack of knowledge or understanding about what to do to see your money increase. This excuse, or lets call it a fear, is in no way wrong. Investing does take a great deal of knowledge and understanding. But it is when the fear becomes an excuse for not doing anything about your financial security that it becomes a problem. While many think investing is a huge gamble of their finances and life security they have worked so hard for, the reality is it is actually a well mapped an educated decision to be WISE with your finances and not simply live from week to week. There are three reasons why you may think it is wise investing. It gives you a plan for your finances, which helps you to keep your weekly budget stable. It repays with higher Read more

Good Debt and Bad De...

shutterstock_73089727 Many people think debt is the result of poor money management and choices. But what about debts that result in income potential or wealth such as a student loan? or a mortgage? These are healthy debts, or 'good debts', and these are debts that you actually want to get yourself into in order to become wealthy in the future! The average cost of study has increased more than 50% in the last six years, yet student enrolments are increasing too. This is because, more and more people are using HECS as an avenue to study, resulting in a better or higher paying job after graduating. Debt can play a valuable role in moving you into a better financial position in the future! A HECS debt is not the only example of a 'good debt'. If done the right way, investing in property will lead to wealth in the future. Despite the Global Financial Crisis, houses Read more

Tips to becoming wea...

Becoming wealthy is possibly with a plan for what your earning today! There is a huge misconception in society today: the idea that, in order to become wealthy, you must first have a wildly high-paying job. Unless one invests and cultivates their finances well, the reality is a six-figure salary will only go so far. People, regardless of their wage, tend to always live beyond their means. Still, we live by the equation that a six-figure salary = a two story house, with a pool and a spa, and a car and a boat and a family holiday at the end of each school term. (Sound’s great, right?) It doesn’t take long for these ‘wealthy’ people to be living off borrowed money.   Wealth is the equation: Assets minus Debt = NET worth. And our net worth is able to be increased purely through valuable investments, regardless of our wage. Time-and-time again we see people come into wealth in ways that defy the status quo because they invested with Read more

Long Term Property I...

Long Term Property Investment Have you noticed that Doctors continually stress that quick-fix diets won't sustain weight loss? Their maxim is that a healthy diet and exercise is the only way to maintain weight. Still, each year, the fitness market rolls in billions on fad diets because we live in a society that wants to see results now! Funnily enough, the same goes for building and sustaining wealth. Investing is a process, built over time using key principals. Thinking 'long term property investment' is paramount to being a successful investor and becoming wealthy. Rather than seeing yourself living in your dream house and driving your dream car in your 20's or 30's, a simple change of mind-set and a plan, could be all you need to see yourself retired early and living the life you've dreamed of. Overnight riches seldom results in increased wealth because often the individual doesn’t have a plan for the money and Read more

Risk Profile: The Ag...

Risk Profile: The Aggressive Investor Do you know the kind of investor personality you are? Knowing this will change the way you invest your money in property, and more importantly, ensure that you make more informed decisions depending on the level of comfort with risk you have. To different people, winning means different things and when it comes to investment risk profiles, there are different strategies of winning. All these are defined in different investor profiles. Here, we'll discuss the aggressive investor in detail. What's Unique in the Aggressive Investor's Risk Profile? The aggressive investor is that who sees value in risk. Therefore, at the very core of their investment characteristics is the ability to take and tolerate higher risks with their money but with the objective of gaining higher returns depending on the movements of the markets. Since investors in this risk profile endeavor to outperform the markets, they end up exposed to many risks while investing Read more

Risk Profile: The Mo...

Investment Property The journey to investment success begins with understanding yourself in terms of how much risk you are willing to take with every investment decision you make. Understanding this will improve your calculations of risk and the choice of investment you want to opt for. Your risk profile is the amount of risk you as an investor are willing to take with your money in exchange for investment returns. Let's find out if you are a moderately aggressive investor and how you can make investment decisions that will work for your kind of profile. What are the Hallmarks of the Moderately Aggressive Risk Profile? As a moderately aggressive investor, you find yourself driven by the goal of capital growth and are ready to tolerate some market fluctuations in the worth of your investment as you anticipate higher returns. A standout characteristics you possess if you fall in this risk profile is the fact Read more

Risk Profile: The Mo...

Risk Profile The Moderate Investor All investors are characterized by attitudes towards risk. When it comes to investing in property, it is important that you consider your tolerance or risk profile carefully. This will include finding out how comfortable you are with the possibility of losing money you have invested, or that your investments might have varying returns from year to year. In so doing, you will understand your personal risk tolerance which will help you make the right choice of asset allocation. Here, you will learn how the moderate investor makes his or her decisions. Traits of the Moderate Risk Profile Most investors belong to this risk profile. The motivating factor for this group is the desire to invest for the long term and enjoy capital growth. If you are a moderate investor, you can tolerate some market fluctuations in the value of your investment as you anticipate a higher return. For you, it goes down Read more