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The Great Australian Dream of home ownership is still alive, but it’s evolving.

With rising costs of living and higher interest rates, rentvesting has become an increasingly popular strategy for getting a leg up on the property ladder.

Reinvesting is when you rent where you want to live and buy where you can afford.

Here are some things you should consider before deciding whether rentvesting is right for you.

The pros of rentvesting

Rentvesting can offer both flexibility and financial security. Here are some of the advantages of rentvesting:

• A leg up on the property ladder: Rentvesting allows you to get started in the property market with a smaller deposit and work towards buying the home you want.

• Lifestyle perks: Want to live in a trendy neighbourhood that’s out of your price range? With rentvesting, you could live the lifestyle you want and invest elsewhere.

• Flexibility: Renting gives you increased flexibility to move around if your circumstances change.

• Tax benefits: What can be great about owning an investment property are the tax perks. Many of the property expenses can be offset against your income.

The cons of rentvesting

Rentvesting isn’t necessarily a good option for everyone. Here are some of the disadvantages:

• No First Home Owners’ Grant (FHOG): If you decide to buy an investment property rather than a home, you won’t be entitled to either the FHOG or stamp duty exemptions or concessions for that property. These are for first time owner-occupiers.
• Added responsibility: Being a renter and a landlord at the same time means you’ll have multiple expenses to cover. In addition to paying your rent, you’ll have costs including council rates, property management fees, maintenance, landlord insurance, as well as your mortgage repayments.
• You won’t own your home: Renting means you don’t have control over how long you can stay in your property which means you may end up moving on a regular basis.
• Capital Gains Tax: If your investment goes up in value, you may be subject to Capital Gains Tax when you decide to sell.

Where to buy?

New analysis from Property Investment Professionals of Australia (PIPA) has identified the top five areas to rentvest in 2022:

1. Casey City Council (Melbourne)
2. Moreton Bay Regional Council (Brisbane)
3. City of Onkaparinga (Adelaide)
4. City of Sterling (Perth)
5. Penrith City Council (Sydney)

But with any property search, it’s important to do your research on things like capital growth potential and rental yield.

Like to know more?

If you think rentvesting could be right for you, speak to us and we’ll help you to explore the finance options to suit your needs.

The search for your dream property can be both exciting and stressful. From the inspections that kick everything off to putting in your offer and having it accepted, these are all stepping stones on the journey towards ownership.

It all culminates in the final step of the process – settlement day. Here’s what to expect and some tips to prepare for a successful property settlement.

What is settlement day?

Settlement day is the day ownership of a property is legally transferred from one party to another. Simply put, it’s the day you get the keys to your new home.

Your conveyancer will take care of the finer details and works with us for the finance. Meanwhile, you must also follow all sorts of regulations and procedures that they will explain to you, including those required by the lender and building insurance provider.

The date of settlement will be outlined in the sales contract. Your broker will work with the conveyancer in consultation with you to confirm the timing and review the contract before signing it.

What should I do before settlement?

There are several things you need to do ahead of the big day to avoid any last-minute surprises.

Firstly, it’s important to do a final inspection of the property to ensure you didn’t miss anything. Secondly, make sure you’ve organised building insurance, which should be done as soon as the seller signs the contract. Finally, check in with your conveyancer to ensure you’ve completed and submitted all of the necessary documentation to transfer the property into your name.

What happens on settlement day?

Your lender and conveyancer will take care of the final paperwork and financial transactions. They’ll work with the seller’s representatives to ensure the balance of the purchase price, along with any government fees and duties, is settled.

They will also check all necessary legal documents are completed and lodged with the respective agencies; and they will arrange the transfer of the certificate of title to your name and ensure the property is legally transferred to you.

Once the paperwork is completed successfully, the settlement is final. Congratulations! You are officially the new owner.

What can I do to ensure a smooth settlement?

To ensure a smooth settlement day, it’s worth seeking advice from professionals who understand the process.

As your Mortgage Broker, we can assist with organising pre-approval for a home loan and we’ll be there with you every step of the way.

Finding a reputable conveyancer who specialises in property law will ensure you understand your responsibilities and rights in terms of the settlement process. They will oversee the legal requirements and paperwork and, most importantly, ensure the title is correctly transferred, or conveyed, from the seller to you.

Finally, make sure you have a suitable settlement period in mind. We can discuss this with you, as settlement periods can range anywhere from 30 to 90 days. You may be able to negotiate with the seller before signing the contract to secure a date that works for you.

Ready to get started?

We’re here to support you through settlement and beyond. We’d love to be of assistance.

It’s no secret that paying off your home loan sooner can save you plenty. However, with cost-of-living pressures and rising interest rates, it can be hard to find extra cash.

A series of small changes applied consistently over time could put you on track to reach your goal sooner. Here are eight tips to help boost your savings.

Tip 1: Make a plan you can stick to

Rather than making extreme changes to your lifestyle and spending habits, focus on a range of savings strategies that will be sustainable. Consider cancelling those streaming subscriptions you’re not using, learn how to cook your favourite meals at home, or opt for a second-hand or DIY option rather than buying brand new.

Tip 2: Automate and separate 

By automating your savings and extra mortgage repayments, you move the money to where it needs to go before you have a lapse in willpower and spend it. Transferring your savings to an offset account may also help you save on interest charges.

Tip 3: Get a home loan health check 

Reviewing the terms of your home loan every two years may help you find ways to save on fees or loan features you don’t need. We can carry out a loan health check for you and help you weigh up your options.

Tip 4: Create a budget and check your progress regularly 

Tracking what you actually spend is the only way to get an accurate picture of your finances. Create a spreadsheet or use a budgeting app such as Mint, YNAB or PocketGuard to categorise your spending and identify where you can cut back to meet your savings goal. Keep an eye on your progress each week to stay motivated and reinforce good habits.

Tip 5: Find extra income streams

Realistically, there is only so much you can save. Another way to boost your savings and make extra repayments is to establish an additional income stream. This could be a side hustle to your 9 to 5, taking advantage of unused assets or selling some of the unused things sitting around the house.

Tip 6: Swap this for that 

There are so many ways to trim the fat without feeling like a scrooge. Swap out an expensive hobby for a cheaper or free one, use cash instead of cards to reconnect with the reality of parting with your hard-earned money or skip a day at the spa for treatments you can do at home.

Tip 7: Make lump sum payments

Rather than spending your tax return or annual bonus, opt to make an extra repayment on your mortgage. Instant gratification is tempting, but remind yourself that additional lump sum payments can affect your total home loan repayments and the length of time it will take to own your property outright.

Tip 8: Consider paying your mortgage weekly 

It may not seem like it would make much of a difference, but changing your mortgage repayments from monthly to weekly may have a positive impact over time. Your interest accrues daily, so this simple switch could potentially save on your home loan.

Ready to kickstart your savings plan and boost your mortgage repayments? Contact us for professional advice about saving on your mortgage.

We’re amidst the spring sales season, but what do rising interest rates mean for this traditionally busy period?

The pandemic’s peak profit-making period has now officially passed, with property prices still falling across much of the country.

However, with rapidly rising interest rates cutting the average Australian’s buying power by 20%, it’s important to understand how to negotiate like a pro when it comes to your spring property purchase. Here are our top tips.

Tip 1: Do your research

You’ll be in a better position to  make an offer or bid with confidence if your  local  property market knowledge is up to speed.

We have access to a range of reports that will help you cover your bases. Whether you’re interested in the latest suburb data, or an estimated valuation of a property, get in touch to find out how we can support your research.

Hint: CoreLogic’s weekly Auction Market Previews are a handy resource. They will help you keep your finger on the pulse during rapidly changing market conditions.

Tip 2: Get your finances in order

If you do find a bargain, you’ll want to be in a position to jump on it. Speak to us about organising pre-approval on your finance, so that you’re ready to go.

Pre-approval means a bank has agreed, in principle, to lend you a certain amount of money. Having pre-approval gives you confidence during price negotiations with vendors. It may also give you an edge over other buyers without pre-approved finance.

Tip 3: Find out why the vendor is selling

Understanding the vendor’s motivation to sell may give you an upper hand during negotiations. What type of settlement terms and deposits will be most attractive to them?

They may be moving interstate, or need liquidity fast, in which case they may drop their price for a shorter settlement.

Maybe they need an extra-long settlement while they find somewhere else to live?

Or perhaps a larger deposit would make you more favourable compared to other buyers?

Ask the real estate agent why the vendor is selling and use the information as a negotiation tool.

Tip 4: Get building and pest inspections done 

Building and pest inspections not only alert you to issues with the property such as termites and structural defects, they can also be used as ammo during price negotiations. You may be able to use the findings from the inspection to negotiate a lower sale price.

Talk to us 

Property prices are falling in many markets and there are plenty of opportunities out there for savvy buyers. Get in touch to organise pre-approval on your finance and be ready to buy.