Personal Finance

There are advantages and disadvantages to managing your own property. Let’s look at why you may want to do it yourself and why you might hire a professional. Buying an investment property is a major commitment. A key decision for many investors is whether to manage it themselves or to hire a property manager.  The pros of managing your property Better oversight. A property manager will never have the same level of personal attachment to your property as you do. As manager, you’re in a position to keep a close eye on your property, and to quickly attend to any issues. If you’re handy, you can do even do some of the maintenance yourself, to save costs. Selecting the best tenants. When charged with finding
Crunch time has come for property investors with June 30 fast approaching. If you are a property investor, you will know what a hectic time end of financial year (EOFY) can be. However, with a little forward planning, you will be well on your way to a smooth tax lodgement come EOFY. Read on for the biggest must-knows for property investors this tax season, helping you stay out of trouble with the ATO and minimising your tax bill while maximising your long-term savings. Must-know #1 Records you should keep  From 1 July until 31 October, you will need to lodge your tax return for the previous income year. If you’re using a registered tax agent, you may be able to lodge later than 31
Confused about the ins and outs of mortgage refinancing? There are two key considerations when you’re looking at taking the step – why and how. Here, we examine both. A home loan is generally a long-term proposition, but in some situations it can be suitable to refinance your mortgage. Refinancing involves taking out a new mortgage and using those funds to pay off your existing mortgage. Doing it right could deliver significant financial gains over time. The two key things you need to know and understand before you go ahead are your reasons for doing it and how to go about it. Good reasons to consider refinancing (1) You want a lower interest rate The loans market is highly competitive and interest rates can
Knowing what a property is worth is central to avoiding paying too much for it. Set a benchmark Comparing nearby properties that have sold recently is the best way to assess an acceptable price for the property you are looking at and provides a valuable bargaining tool when you are negotiating with a seller or agent. Make sure the properties are comparable, with a similar land size and number of bedrooms, for example, so you aren’t measuring apples against oranges. Keep in mind current market conditions The property market is always changing, so doing this research once and sitting on it for a few months will offer little help. Going to open homes and auctions regularly will give you insight into the current state
Urgent maintenance is an unavoidable aspect of being a landlord, so having a cash buffer set aside will help you deal with any unexpected problems. When renting out an investment property, having access to extra cash is vital for two reasons (1) to cover the costs of maintaining the property, giving it the best chance of remaining tenanted; and (2) to cover the cost of the mortgage should you lose your employment or rental income. A buffer ensures that you are not stretched to your financial limits, but rather comfortable while on your investment journey. Ideally, your buffer would sit in an offset account against your mortgage, so that you have immediate access to the money while at the same time reducing the principal,
Offset accounts and redraw facilities work in similar ways; they both allow you to reduce the balance of your home loan, and therefore the interest charged, by applying extra money to your debt. Redraw facilities allow you to deposit spare income into your home loan account, allowing you to redraw a sum equal to the extra repayment amounts in future. In the meantime, the extra money paid will lower the amount of interest charged while still giving you access to your money. However, there may be restrictions on how much money can be withdrawn and when. For redraw, it depends on whether the facility applies to a fixed-rate or variable loan. Most institutions only allow redraw from a variable-rate loan, or fixed-rate loan but
So, you’re thinking of buying your first residential investment property? There are a few things to consider before making the move. Here are our top 10 tips for avoiding potential difficulties and ensuring success. (1) Know your goal Understanding your financial objectives is key to finding the right investment property. The actual property itself is rarely the end goal when it comes to investing – the financial elements should be your key focus. First, decide what your investment goal is and then create a plan to achieve it within a realistic time frame. Are you looking for a plan for retirement? An income-generator to fund your children’s education? Or building equity to gain a regular income? Define a plan and review it regularly as
When people think of buying an investment property, many only think locally. Investing in a property interstate could possibly be a smarter idea, potentially resulting in a better return on your investment. it may also be a potential way to snaffle a bargain. You could be buying into an area with greater potential capital growth compared to your home state – as each state reaches different stages of the property cycle at different points. Some of the key issues to keep in mind include: The logistics of property management Some may find it hard to manage their investment property from another state. It can be costly maintaining a property and finding tenants if you regularly need to travel between states. Although employing a property
For those getting ready to stride into the world of home ownership, the uncertainties of pre-approval can cast a shadow of doubt over an otherwise exciting time. When is it necessary? How long does it last? And what does it involve, exactly? Pre-approval is a lender’s assessment of your likelihood of being approved for an otherwise suitable loan. The appraisal is made on the basis of your ability to service a loan by looking into your living expenses and liabilities, your credit history, your employment circumstances and how often you have moved home or employment in the recent past. As it is performed prior to a property being found and chosen, it does not take into account the particulars of a specific property and
Refinancing can be a great way to save money if you believe you are paying too much for your loan, but there is more to it than just finding a loan with a lower interest rate and making the change. Before making the switch, ensure the savings you could make outweigh the fees involved. Here are the different exit costs to consider: Exit fee Although loans taken out after 1 July 2011 are not subject to deferred establishment, or exit, fees, those taken out prior may still be. Also known as ‘early termination’ or ‘early discharge’ fees, they can sometimes be paid by your new lender but are normally applied to an early contract exit. Establishment fee Also known as ‘application’, ‘up-front’ or ‘set-up’
With interest rates at an all-time low, taking the option of locking in an interest rate on your home loan to guard against possible future fluctuation may be attractive. However, it pays to know the ins and outs of fixed-rate loans before committing to one. When purchasing a property, borrowers can decide between fixed-interest loans that maintain the same interest rate over a specific period of time, or variable-rate loans that charge interest according to market rate fluctuations. Fixed-rate loans usually come with a few provisos: borrowers may be restricted to maximum payments during the fixed term and can face hefty break fees for paying off the loan early. However, locking in the interest rate on your home loan can offer stability. For those
Reducing the life of your loan isn’t difficult; there are many simple things you can do to cut years off your mortgage. Here are some tips that will help you be mortgage-free sooner than planned. Small extra repayments One of the most obvious ways to pay off your home loan quicker is to make extra repayments. Depositing lump sums, such as a tax return or work bonus, will always be beneficial, however it doesn’t always take large amounts or windfalls to make a substantial difference – planning for regular, small cash injections can have a great impact over the life of a loan. Let’s say we give an extra $50 a fortnight on a $500,000 loan, that saves you $32,000 of interest over the

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