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Hello,
Welcome to our=20
latest newsletter. Since last newsletter there has =
been a=20
0.25% increase in the official cash rate by the =
Reserve Bank.=20
So far this has not curbed demand for many borrowers =
wanting=20
to purchase property in the eastern states. =
For=20
commercial property investors and developers there has =
been a=20
number of new products and interesting changes. We now =
have=20
two new commercial funders who will lend up to 85% of =
your=20
commercial property value on a first mortgage =
facility.=20
A mere 12-18 months this was not available =
without the=20
use of a second mortgage. These new developments in =
the=20
commercial mortgages are due to increased competition =
and=20
market growth in the commercial mortgage sector. This =
is only=20
good news for commercial property investors and =
developers!=20
In light of these recent funding developments =
it may=20
be time to rethink your acquisition strategies and =
commercial=20
property investment decisions. New leverage means new=20
opportunities, contact your commercial lending advisor =
for=20
more information and how these new products may =
benefit you.=20
On the residential finance front we have a =
number of=20
exciting new products which are sure to be of benefit =
to the=20
majority of our clients. We now have a new 95% LoDoc =
loan=20
product for suitable residential security as well as a =
new 90%=20
LoDoc Construction loan! Both of these loans also have =
the=20
option of not paying a mortgage insurance premium! =
In=20
addition for our larger borrowers we have recently =
launched=20
our new LoDoc Jumbo loan which allows you to borrow up =
to $3=20
million dollars without financial statements! For =
further=20
details and information on any our new products, =
please visit=20
our website or ask your lending advisor about our new =
red=20
label product range.
As always if you have any =
questions about your current finance structure or =
would like=20
to talk to one our expert advisors about borrowing =
strategies=20
to accelerate your property investment returns, feel =
free to=20
contact us today.
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St Kilda Rd =
Towers
Level 4, 1=20
Queens Rd
Melbourne VIC 3004
| Tel: |
1300 667 694 |
| Fax: |
1300 667=20
=
594 | |
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Looking=20
to buy an interstate property |
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Investing=20
in property trusts |
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![3D""=20](3D"http://www.powerport.com.au/images/nport_images/newsletter_images/=) |
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Here to help you
With more financial transactions being available on line =
all the=20
time, and with a host of lenders available every time you =
want to=20
borrow, what is the value of maintaining a long term =
relationship=20
with your mortgage broker?
The best reason may be =
the very=20
fact that there is so much choice and so many products =
available.=20
Assessment of them all can become a minefield - an interest =
rate=20
that appears low may not be so attractive when other terms =
of the=20
loan are considered.
A friend in the business - a=20
professional who knows the ropes - is much easier to =
approach for=20
assistance than someone you don't know.
There are =
many other=20
funding needs beyond residential or investment property =
purchases.=20
These include buying a car for personal or business use,=20
rationalising credit cards and funding a business. If each =
funding=20
has to be negotiated separately with a different person each =
time,=20
there is huge room for general financial confusion. =
As your=20
broker we are in a position to help you each time a new =
funding need=20
arises. With statistics showing the average mortgage lasts =
less than=20
seven years, your future financing needs may come sooner =
rather than=20
later. If you have a current funding need please discuss it =
with us.=20
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Looking to buy an interstate property
For most home buyers and property investors, their own =
state,=20
city or region is the logical place where they make their =
first=20
purchase. However, after owning a home or investment =
property for a=20
period of time, many clients become aware of appealing =
property=20
investments in other cities or states of Australia.It =
is common=20
for the media to comment that the property market in one =
state is in=20
a period of flatness, while in another, the property market =
is=20
taking off for a boom. In recent years, the property =
situation in=20
Sydney and Perth have been reported in this way. Many Sydney =
suburbs=20
have been regarded as being flat, while almost any property =
in Perth=20
has been regarded as being a candidate for boom conditions.=20
Clients are sometimes challenged by the prospect of =
living=20
in one state but purchasing an investment property in =
another. It is=20
true that under State laws there may be variations in =
certain=20
aspects of the legal ownership of property. These variations =
may=20
include things like the rate at which stamp duty is paid, =
the=20
existence or nonexistence of land tax and various other =
state rules=20
but they do not apply to the funding package.
The =
question=20
arises, 'Is there any barrier to using my own broker to =
purchase a=20
property in another state?' we would like to assure you =
that, as far=20
as our role as a mortgage broker is concerned, we are more =
than=20
happy to discuss your options with you. All of the financial =
institutions with which we hold agreements are equally =
capable of=20
mortgage lending for a property purchase in any State or =
Territory=20
of Australia.
Even credit unions, which were once =
limited to=20
operations within a particular state are no longer =
restricted in=20
this way. WA and ACT do have particular regulations for =
Brokers.=20
These however do not prevent people from other states buying =
property in these states.
Many people do decide to =
diversify=20
their property investment portfolio by buying in a number of =
different states and cities. If you have decided to =
diversify in the=20
same way we are well placed to help you with the finance for =
your=20
interstate property portfolio. Please call should you need =
any=20
further information about this.
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Book Review
The =
challenge of=20
transforming a tiny space - overlooked backyard, a balcony, =
a=20
miniature front garden, or a narrow passageway - into a =
beautiful=20
garden would daunt even the most experienced gardener. =
Thomasina=20
Tarling, a specialist in creating minute gardens =
concentrates on=20
spaces no more than seven metres in any direction. She =
explains how=20
to create visual interest through changes of level and =
eye-catching=20
focal points plus lightening dark, oppressive walls with =
colourful=20
paint. Thomasina also suggests an array of visual illusions =
to make=20
the most of a small space.
Truly Tiny Gardens by =
Thomasina=20
Tarling. Publisher Conran Octopus
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Investing in property trusts
Have you thought of the role we can play in borrowing =
money to=20
invest in a property trust?Without wishing to actually =
advise=20
you on whether a property trust is right for you, it is a =
fact that=20
this form of investment appeals to some but not to others. =
Some=20
investors are turned off by the fact that investment in a =
property=20
trust does not result in ownership of an individual building =
which=20
can be touched and felt. It results in shared ownership of a =
portfolio of properties together with other investors. =
But=20
some people are equally turned on by the prospect of not =
having the=20
responsibility of personally owning a property and the risks =
of bad=20
tenants, rent droughts and management worries.
A =
property=20
trust also allows the investor to buy into certain classes =
of=20
property - such as prime commercial property. =
Property trust=20
investors receive an income distribution from the rental =
flow=20
generated by the properties. The property trust investor may =
participate in a capital gain if the properties in the =
portfolio=20
lift in value.
Where the income from the trust is =
assessable=20
income, the interest payments on your borrowings will be tax =
deductible in the same way as the interest paid on =
borrowings for=20
the purchase of an individual investment property. =
Borrowing=20
for investment in a property trust may take place in a =
similar way=20
as borrowing for an investment property. That is, a portion =
of the=20
loan can be secured by a mortgage against your existing =
property and=20
the lender takes security over your investment units in the =
trust.=20
Investors who may not wish to borrow the large =
amounts of=20
money required to fund an investment property may find it =
appealing=20
to borrow smaller amounts of money to invest in a property =
trust.=20
Earlier in this newsletter we touched on the value =
we can=20
bring to a long term financial relationship due to the fact =
that=20
people's borrowing needs are many and varied. Borrowing to =
invest in=20
a property trust is certainly one of these many and varied =
options.=20
If you are one of those who has decided to invest in =
a=20
property trust with geared borrowings, please discuss the =
funding=20
options with us.=20
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Did you know?
The =
total=20
property market in Australia for both listed and unlisted =
property=20
trusts is around $356 billion. This is in addition to the =
value of=20
all owner occupied homes, privately owned investment =
properties plus=20
properties owned by corporations or government. =
Melbourne=20
research firm Property Investment Research estimates the =
value of=20
listed property trusts at around $176.6 billion. The value =
of assets=20
held in unlisted property trusts is between $165.5 billion =
and=20
$184.4 billion.
So the market size of this sector is =
significant. Asset classes held by these property trusts do =
not=20
typically include residential property. Instead, they are=20
specialised into classes such as office buildings, =
industrial=20
estates, retail shopping centres, entertainment precincts =
and=20
international property.
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What is offset?
You may have heard the term 'offset' or 'offset account' =
but do=20
you know what it means?An offset account allows a home =
owner or=20
investment property owner to place an amount of money on =
deposit=20
with the lender. Instead of receiving interest on the =
deposit as=20
would be usual, the interest is offset against the interest =
accruing=20
on the mortgage.
Let's take a simple example. You =
become a=20
beneficiary of a will and gain $100,000 as a cash amount. =
You decide=20
that you do not want to pay that money into your loan =
account as a=20
capital reduction because you have it earmarked for another =
purpose=20
later on. You may simply want to keep it as a future =
reserve.=20
If you establish an offset account with your =
mortgage=20
lender, and place that $100,000 on deposit, the lender will =
waive=20
the interest due on the first $100,000 of your mortgage =
loan.=20
Various conditions and terms apply which we can explain. =
This means=20
that a much higher proportion of your normal monthly =
repayments will=20
go to the repayment of principal rather than interest. =
Consequently=20
your mortgage is reducing faster.
There are a number =
of=20
other benefits to using this financial tool. There are also=20
conditions, for example it must be your own money in the =
offset=20
account.
At the start of a loan contract, buyers are =
usually=20
looking for every dollar they can find to establish their =
own=20
equity, limit their total borrowing and ensure they have =
sufficient=20
cash flow to meet repayments. The benefits of offset do not =
usually=20
come into play at this stage because an offset account =
requires that=20
you have excess liquidity.
The concept of offset =
usually=20
becomes relevant at a later stage when the loan has been =
running for=20
a while and when the borrower's financial circumstances=20
improve.
If you would like to learn about how an =
offset=20
account works, and about how it could be organised in your =
case,=20
please give us a call.=20
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Our Partners
Red Rock =
Mortgage=20
Group is a Full Corporate Member of the Finance Brokers =
Association=20
of Australia.
All members are bound by a strict code =
of=20
ethics to ensure the highest levels of service, integrity =
and=20
professionalism. |
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About Us
Red Rock =
Mortgages=20
specialise in mortgage finance for property Investors &=20
Developers. Whether you're a novice or an experienced =
investor=20
looking for a flexible finance solution to create wealth. =
Red Rock=20
offers a mortgage to suit your needs.
Our aim is to =
assist=20
investors in creating wealth through property by utilising=20
innovative and flexible mortgage finance solutions. =
Our=20
boutique approach, experience and expertise means you'll be =
able to=20
source the right finance facility to build a diverse =
property=20
portfolio. We not only look at investment finance =
strategically, but=20
also understand the needs and requirements for a successful =
property=20
investor.
Red Rock Mortgages provides you with =
choice &=20
flexibility from a diverse lender panel including the major =
banks=20
and other lenders. In addition our own unique range of =
lending=20
products can provide you with cutting edge innovation and =
additional=20
leverage where others cannot.
As investors and self =
employed=20
business people we understand the needs of self employed =
borrowers=20
and property investors. You can be assured of receiving =
expert=20
advice and prompt assistance, with the added comfort of =
knowing we=20
are both speaking the 'same language'.
For =
professional=20
intelligent finance advice, contact us today.
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Disclaimer: =
This=20
newsletter is intended to provide general news and =
information only.=20
Readers should rely on their own enquiries before making any =
decisions regarding their own interests. Please do not rely =
on any=20
part of this newsletter as a substitute for specific legal =
or=20
financial advice. All material is copyright 2007. =
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