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Hello, Welcome to our latest 'new look' newsletter. For our regular=20 subscribers you'll notice the new look and feel with added = features like=20 forward to a friend and print friendly buttons for your benefit. = A quick update on property markets around the country point to = a steady=20 increase in median values across the eastern states, with a = moderate=20 cooling of the spectacular rises in values in WA & NT over the = last 3=20 years. Despite recent media attention given to the exodus of baby = boomers=20 selling investment properties to take advantage of the current=20 superannuation benefits before June 30th. New data released shows = rental=20 vacancy rates across the country are now at 40 year lows! A new = wave of=20 investors are now looking to come back into the market, with one = real=20 problem - a severe shortage of =E2=80=98in demand' real estate. = This is only=20 doing one thing to market values. Melbourne in particular has had regular auction clearance rates = above=20 80% since the beginning of the year. This indicates a buoyant = market with=20 strong buyer demand but with a real lack of quality real estate = available.=20 Recent media articles suggest the Reserve Bank is now likely to = leave=20 interest rates on hold for the rest of the year, much to do with = the=20 relatively low current inflation rate. This will more than likely = lead to=20 an increase in demand for property and mortgage finance around the = country, as debt is still relatively cheap and mortgage products = are now=20 more flexible and accessible than ever before. On the finance front we are busier than ever, with strong = demand for=20 investment finance in all states with a surge in demand for = development=20 and construction finance. At Red Rock we specialise in providing = fast=20 flexible and highly leveraged development finance facilities. For = more=20 information our development finance mortgages please visit the = loans and=20 products section of our website or contact us today for a = confidential=20 discussion. We hope you find the newsletter of interest. Please pass your = copy on=20 to family or friends. We look forward to helping you, and those = you=20 recommend our services to. Please call with any = questions. Drive = your mortgage=20 down
Here are some strategies to help make your = repayments=20 count for more. Get the timing right Making extra payments early in the life of a loan pays bigger=20 dividends. In the first phase of a home loan your regular = repayments=20 usually go almost exclusively towards paying the interest on the = loan. Lump sum payments With the benchmark interest rate at a five year high, putting = any cash=20 windfalls into your mortgage account may well be a sound = investment. Increasing regular payments If you are one of the high income earners that benefited from = the=20 latest budget tax cuts, finding that little bit extra for mortgage = repayments may not be too difficult. Pay more frequently Paying mortgage repayments fortnightly rather than monthly may = help you=20 pay off your mortgage sooner. By paying fortnightly you can make = the=20 equivalent of 13 monthly payments in a 12 month period. Consider a 100% mortgage offset By attaching an offset account to your mortgage, funds held in = the=20 offset account can be used to reduce the monthly interest charged = to your=20 loan account. Depending on the terms and conditions of your home = loan,=20 money can usually be deposited and withdrawn from the offset = account like=20 most other transaction accounts, however every dollar held in the = offset=20 account may help reduce the interest charged to the home loan. For = example: if you have $10,000 in an offset account and a mortgage = of=20 $100,000, interest will only be calculated on = $90,000. Property = management -=20 outsource or keep it personal
Job description The bread and butter tasks of managing a property include:
In order to do the job well, you=92ll also need a thorough = understanding=20 of the rights, duties, entitlements and responsibilities of a = landlord and=20 tenant, as well as an appreciation of processes and procedures = when things=20 go wrong. Benefits of DIY For many people time is money and an = agent will=20 often do the legwork for you... A major benefit of self-managing your property is that you may = save=20 money (agents typically charge around five to seven per cent of = the annual=20 rent). A less obvious benefit that self management may provide is = an=20 opportunity for you to develop a good relationship with your = tenant.=20 Getting to know your tenants is regarded as a sound strategy for=20 developing long-term leases. However, this latter benefit is = almost=20 entirely dependant on your ability to manage your property = well. Benefits of an agent For many people time is money and an agent will often do the = legwork=20 for you and save you the effort of grappling with the residential = tenancy=20 legislation and rules. In addition, agents often have access to a = large=20 number of reliable tradespeople and may be able to negotiate = cheaper fees=20 for work done on your property. Agents are also well placed to advise on market rents and = vacancy rates=20 and this may help to ensure that you maximise your rental yields.=20 Similarly, agents often have some knowledge of property taxation = which may=20 help minimise your tax exposure. If you appoint an agent Check if the agent is a member of a real estate body with a = code of=20 conduct. Not all agents are competent so always remember to = monitor how=20 well your property is being managed. Fees may be in the region of = five to=20 seven per cent of the annual rental but can be negotiated, as can = some=20 aspects of the contract with the agent. For example, you may want = to put a=20 cap on how much an agent can spend on repairs and maintenance = without=20 needing to consult you first. If you opt for DIY If you are willing to take on the responsibility of managing = your=20 property it is vital to be well informed. Contact the Office of = Fair=20 Trading (or the equivalent) in your State for further=20 advice. Get more = out of your=20 budget
However, with discipline and common sense a = budget=20 blow-out can be avoided. List your spending and compare it to your = total=20 income. Budgeting basics Before belt-tightening, the first step is to list your spending = and=20 compare it to your total income. If you have never devised a = budget before=20 you may find ASIC=92s Fido website helpful. Its budget planner at=20 www.fido.gov.au/calculators provides advice on how to calculate = income and=20 categorise spending. Simply put, there are fixed items, such as = loan=20 repayments and insurance. Variable expenses include bills, = groceries, and=20 petrol and, finally, discretionary spending covers such items as=20 entertainment, deli lunches and magazines. Cost cutting Once you have your spending patterns outlined, you may be in a = better=20 position to see where you can make savings. For every line item of = your=20 budget ask two vital questions. Can I do without this? If you = cannot, how=20 could I get this for less? Do not assume your fixed items are non-negotiable. While = mortgage=20 payments cannot be avoided it may be worth speaking to your = mortgage=20 broker to see if you can=92t save even more in interest costs. = Similarly personal loan or credit repayments are essential = spending but=20 try to look for credit cards with a lower rate or consider = consolidating=20 your loans. Some lenders may allow you to link a credit card = account to=20 your home loan account. Better still, pay off your credit cards in = full=20 and avoid interest payments all together. With petrol prices on the rise it may be worth looking at = public=20 transport in your area or, if leaving the car at home is too big a = sacrifice, a visit to www.motormouth.com.au may help you locate = the=20 cheapest petrol pumps in your area. Discretionary spending, however, often offers the greatest = scope for=20 delivering savings. Cutting back on deli lunches, your favourite = magazines=20 or your daily latte could make a dramatic impact on your budget. = The=20 Virgin Money Wallet Watch survey found that men frittered an = average of=20 $3,395 on takeaway food and drink, lottery tickets, taxis and = magazines=20 (women spent an average of $2,314 each year on incidentals). Join the club Belt tightening has a lot in common with dieting and for some, = joining=20 a club provides the motivation they need to keep on track. One = option is=20 www.cheapskates.com.au where you can share tips with others and = remind=20 yourself of the benefits of self-denial. Construction loans: a=20 good foundation
There is a very good reason for this as well: interest is = generally=20 only charged on the amount you draw down while you=92re building = your home,=20 rather than the entire loan amount. Requirements Before a construction loan is approved, the borrower must = satisfy=20 certain requirements and have firm building plans in place. = Requirements=20 may include:
The process There are generally five progress payments made to the builder = during=20 the construction phase. At the completion of each stage the lender = will=20 require confirmation that the required work for that particular = stage has=20 been completed =96 they will usually arrange an inspection from a = valuer or=20 have the borrower confirm that the stage is complete. Loan features Construction loans are offered by most mainstream lenders at = similar=20 interest rates as standard home loans; however some lenders may = have set=20 =91construction only=92 products that may attract at a higher = interest=20 rate. Remember =96 the construction loan is only in place while the=20 construction is being completed. Repayments on construction loans = during=20 the construction phase are often calculated on an interest only = basis=20 calculated on the outstanding balance. Some lenders may allow = additional=20 repayments during the construction phase, offset accounts and = other=20 features; however speak with your mortgage broker who will be able = to help=20 you find a construction facility best suited to your needs. On Completion Once the house is built, interest is usually charged on the = full loan=20 amount and borrowers may be free to switch to other loan products = on offer=20 from the lenders product range. Before committing to a product = though, it=20 may be worth checking into what (if any) costs are associated with = switching to another product on completion of=20 construction. |
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St Kilda Rd Towers Forward This Newsletter Could one of these articles help a friend? Or do you know = someone=20 needing a loan in the next three to six months? Please give me a = call or=20 forward this newsletter to them. Many thanks. Click to forward to a friend Profile Red Rock Mortgages specialise in mortgage finance for property=20 Investors & Developers. Whether you're a novice or an = experienced=20 investor looking for a flexible finance solution to create wealth. = Red=20 Rock offers a mortgage to suit your needs. Our aim is to assist investors in creating wealth through = property by=20 utilising innovative and flexible mortgage finance solutions. Our boutique approach, experience and expertise means you=92ll = be able to=20 source the right finance facility to build a diverse property = portfolio.=20 We not only look at investment finance strategically, but also = understand=20 the needs and requirements for a successful property investor. Red Rock Mortgages provides you with choice & flexibility = from a=20 diverse lender panel including the major banks and other lenders. = In=20 addition our own unique range of lending products can provide you = with=20 cutting edge innovation and additional leverage where others = cannot. As investors and self employed business people we understand = the needs=20 of self employed borrowers and property investors. You can be = assured of=20 receiving expert advice and prompt assistance, with the added = comfort of=20 knowing we are both speaking the 'same language'. For professional intelligent finance advice, contact us=20 today. Did you know? Virtual Investment* If a stagnant property market is dampening your enthusiasm to = invest,=20 take heart from one Australian who is riding the wave of a virtual = property boom. Last year David Storey, a PhD student, made headlines here and = in the=20 UK when he spent about $35,000 on an island that only exists in = the=20 computer game Project Entropia. He is reported to have made his = money back=20 within a year through selling land to build virtual homes. Commentators have predicted there may be large profits to be = made=20 through MMORPGs (massive multiplayer online role playing gaming) = and while=20 the property is digital the potential profits (and losses) are = real=20 enough. Visit www.project-entropia.com. * This was sourced from various reports including one from the = BBC, The=20 Guardian, radar.smh.com.au Book Review The Accidental Zillionaire* Characterised as an eccentric and a genius, he=92s the = co-founder of=20 Microsoft. But unlike Bill Gates, whose recognition rating is the = equal of=20 a Tiger Woods or a Tom Cruise; this other guy could walk down the = street=20 untroubled by autograph hunters. In fact, he would probably have = trouble=20 getting recognised at a computer convention. He=92s Paul Allen and he is worth a cool $US21 billion. Put in=20 perspective, he is the fourth richest man in the world. This book reveals the man behind the legend. From his early = days when=20 he first met Bill Gates at high school in Seattle, Washington, to = when=20 they formed the world=92s largest software company =96 Microsoft, = to his=20 battle with Hodgkin=92s disease and his philanthropic work. *Available at all Dymocks bookstores. Published by John Wiley = and Sons=20 Ltd. Red Rock Mortgage Group is a Full Corporate Member of the = Finance=20 Brokers Association of Australia. All members are bound by a strict code of ethics to ensure the = highest=20 levels of service, integrity and=20 professionalism. |