PH - 04 1339 8878
Email - info@anvilfins.com.au
Anvil Financial Solutions
At Anvil, we understand your needs and focus on arranging customised finance solutions to implement your mortgage / finance plan.
We have over 10 years of industry experience and provide our customers with an unbiased and appropriate loan solutions from our panel of 30+ lenders.
Our Value Proposition:
Stress Free mortgage solution.A one-stop shop for all your finance and insurance needs.Fully accredited MFAA Brokers.
Some of our solutions on offer
First home buyerConstruction loansInvestment loansDebt consolidation and refinancingDevelopment loansBusiness loansCommercial loansCar and equipment financeInsurance needs
Calculators
Fortnightly Repayment Calculator
Interest-Only Mortgage Calculator
How Long to Repay Calculator
Home Loan Offset Calculator
Extra Repayment Calculator
Credit Card Calculator
Compound Interest Calculator
Comparison Rate Calculator
Budget Planner Calculator
Borrowing Power Calculator
Contact Us
You can send us a message below, or email us at info@anvilfins.com.au or call us on +61 413 398 878
Subscribe to our newsletter.
BLOG
Why location is crucial when buying an investment property
The first thing most of us look at when selecting an investment property is its location. If the property itself isn’t quite right, you can always renovate, but it’s not as easy to move a house to a better location. That’s why you should consider the location carefully. Here are some of the most important things to look for.
Love thy neighbour
Before you buy, familiarise yourself with the local community. If possible, visit the neighbourhood during both day and night to get a feel for whether it’s a safe place to live. Are there kids playing outside or security bars on the windows? Are there trampolines in the front yards or the remnants of last night’s party? This will help you determine whether the location is suitable for the type of tenants you want. After all, if you’re looking in an area that attracts university students but you would prefer to rent to a quiet couple, then perhaps this location isn’t right for you.
Future plans
The neighbourhood might look suitable now, but things can change. It’s a good idea to investigate any future plans that could affect the value of your property. For example, the local council should be able to tell you if a freeway or large-scale construction is planned. Major works could increase or decrease your property’s value depending on where they’re situated.
Access to infrastructure
To increase your potential rental income, try to buy near desirable infrastructure and facilities. For example, families often pay a premium to live in the catchment area of a quality public school, so it’s worth checking the educational zoning.
Access to shops, public transport and the beach are also attractive features for both tenants and prospective future buyers. And while it’s handy to be near the airport, if you’re located right under the flight path it might impact the amount of rental income you receive.
Bargain pockets
Finding a bargain pocket in a good suburb could increase your capital growth potential. By looking at demographic data, such as that collected during the Census, you may be able to spot trends. Perhaps the neighbourhood has recently been gentrified by young professional couples who are increasing the average income of the area, which is likely to increase the value of the property over time. Bargain pockets may also be found in close proximity to high-growth areas that will benefit your investment in the long term.
Searching for an investment property can be a rewarding experience. By considering the location, not just the address, you can increase your chance of maximising your rental and capital growth potential. If you need help buying your investment property, contact your mortgage broker.
Contact BP from Anvil on 0413 398 878.
© Advantedge Financial Services Holdings Pty Ltd ABN 57 095 300 502. This article provides general information only and may not reflect the publisher’s opinion. None of the authors, the publisher or their employees are liable for any inaccuracies, errors or omissions in the publication or any change to information in the publication. This publication or any part of it may be reproduced only with the publisher’s prior permission. It was prepared without taking into account your objectives, financial situation or needs. Please consult your financial adviser, broker or accountant before acting on information in this publication.
Your guide to investment property loans
There are certain things to look out for when selecting and applying for a loan for your investment property. Here we look at the main differences, the most popular loan types, and how to get the best mortgage for your situation.
Interest-only, fixed, variable, offset – finding the investment home loan that’s right for you can seem like a minefield of financial jargon and conditions.
The key to finding the right loan is to have a clear investment strategy: are you going to renovate and sell, or stay on for the long term and ride the property wave?
Fixed interest rate loan
Arranging a mortgage with a fixed interest rate gives you certainty – you’ll know up-front what you need to repay annually. This means that once you know what you are going to receive in rent you can estimate whether there will be a cash surplus or deficit and manage your cash flow accordingly.
Some lenders allow you to prepay up to 12 months’ of interest on this type of loan potentially bringing any eligible tax benefit forward; speak to your tax advisor about claiming the payment as a tax deduction.
Bear in mind that many lenders will charge you a break fee if you repay more than the fixed rate allows for. Before making any extra payments, check with your bank. And if you plan to make additional payments during the life of your loan, make sure you enter into a loan that doesn’t charge these break fees.
Variable interest rate loan
Your payments will fluctuate with a variable interest rate mortgage, but the pay-off is flexibility – if the loan has a redraw option, you’ll be able to redraw funds from any extra payments you may have made.
You can also choose a split loan, with a mix of fixed and variable interest rates. Package home loans may feature split rates, along with credit cards, waived fees and other products.
Interest-only loan
As the name suggests, with interest-only loans, you won’t pay anything off the principal. If the value of your property increases, you’ll have that equity even though you’ve paid nothing off the principal. If the market flattens, however, you might not have any equity.
The sweetener for investors is that, unlike principal repayments, interest payments are tax deductible. Please check with your accountant or financial planner for tax implications.
You can also choose an interest-only loan for a period of time while you renovate. Your repayments are less than if you’re paying the principal plus interest, so you’ll have cash up your sleeve to pay for your renovations.
An interest-only mortgage can be arranged for up to 10 years.
Offset account
Products such as interest offset accounts allow you to use your mortgage as a kind of savings account, offering great flexibility and with interest calculated daily.
For example, you could have your salary paid into your offset account, which is linked to your home loan. The balance of your mortgage will be reduced by your offset balance, meaning that you’ll pay less interest over the long term, and you’ll still be able to withdraw your cash when you need it.
Most offset accounts are linked to variable rate loans rather than fixed rate loans.
Line of credit
Also known as a home equity loan, a line of credit home loan allows you to use the equity in your existing property to secure your investment loan. Rather than receiving a lump sum, you can access as much or as little of the loan as you need, meaning financial discipline is key. Canny borrowers can have their salary paid into their line of credit loan account, to offset the loan.
Whichever loan you choose, seek professional advice from a mortgage broker and shop around to compare competitive rates.
Investment loans have stricter eligibility restrictions, may require a larger deposit than other home loans, and often incur a slightly higher interest rate. You’ll also need to have funds to cover potential costs or loss of rental income if your property is untenanted for any length of time. The trade-off is that as a landlord you can claim associated expenses as tax deductions.
To discuss your home loan options, and to find an investment property loan that’s right for you, contact your mortgage broker.
Contact BP from Anvil on 0413 398 878.
© Advantedge Financial Services Holdings Pty Ltd ABN 57 095 300 502. This article provides general information only and may not reflect the publisher’s opinion. None of the authors, the publisher or their employees are liable for any inaccuracies, errors or omissions in the publication or any change to information in the publication. This publication or any part of it may be reproduced only with the publisher’s prior permission. It was prepared without taking into account your objectives, financial situation or needs. Please consult your financial adviser, broker or accountant before acting on information in this publication.
Is buying to flip still viable in today’s market?
With the property boom of recent years and the popularity of TV renovation shows like The Block and House Rules, increasing numbers of Australians have been ‘buying to flip’ – buying a property, renovating it and selling it at a profit.
Buying to flip can be lucrative when property prices are rising rapidly, but is it still a viable option in today’s softer market? The answer is it can be. You will, however, need to:
• do your own research and due diligence
• be in a strong financial position
• consult a mortgage broker for the best finance arrangements.
What should potential ‘flipper’ be aware of?
Buying ‘the right’ property
What’s the right property for you to flip? The answer to that may come from research into the local area to work out exactly where good value may lie. Ask yourself questions like:
• What are the historical values for this property and others on this street?
• How much can you spend before overcapitalising?
• Is the property attractive to the demographic of the area?
• Is the property structurally sound?
• How long are properties sitting on the market for?
• What is the area the property is in zoned for – one-level residential only or multi-level dwellings?
You’ll also want to find out whether there is anything planned that could stimulate future demand. Are there any new developments – such as investments in infrastructure, or schools or shopping centres under construction – that could attract new people to the area and drive up property prices?
The costs involved in buying and selling
Property is typically not a short-term investment – it’s time-consuming and expensive to buy and sell. When buying a property to flip, the following costs need to be covered:
When buying
• Loan establishment fees
• Building and pest inspection reports
• Legal fees
• Stamp duty
While renovating
• Labour and materials
• Mortgage repayments
• Rates for holding period
• Accommodation costs (if you have to move out for a period)
• Storage costs (for any furniture)
When selling
• Marketing costs
• Real estate agent fees
• Legal fees
• Loan exit fees
• Mortgage repayments and rates
Therefore, it makes sense to be in a strong financial position and be confident you can add value quickly and easily.
What are the potential risks in buying to flip?
Timing the market
Property is typically a long-term investment. So, if you’re looking to make money on it in the short term, you’ll usually need to add value to the asset and benefit from a rapidly rising property market.
In reality, the market can cool quickly if changes to lending policies or higher interest rates come into play. These factors can be hard to predict. If you need to make a sale and your property sits on the market longer than expected, its perceived value can erode with each passing day.
Costs blowing out
Clearly you want your renovation completed as quickly and efficiently as possible, but sometimes there can be costly and time-consuming surprises to address. One way to limit this is by getting a comprehensive pest and building inspection. Unfortunately, you usually won’t add value through remedial work; buyers will pay a premium for lifestyle and aspiration – less so for a new roof!
Some things to consider
The work that needs to be done
Flippers need to consider whether simple cosmetic improvements and good styling will be enough to entice buyers. Will a paint job, new flooring, stylish lighting, a kitchen and bathroom refresh, and some garden work be enough to showcase the property and its lifestyle potential?
Financial and tax implications
As with any project, funding is what will keep it afloat. How will you cover all the costs you incur? Will you be financially stretched to achieve your goals for the property? And can you afford to hold onto it if you can’t sell it for what you’d like?
Another consideration is Capital Gains Tax (CGT). Given this will be payable on any profit you make, it may make sense to consider strategies to minimise the amount payable. These could include holding the property for at least one year to access a 50 per cent CGT discount, or selling in a low-income financial year. For more information on this, you may want to seek independent tax advice from an appropriately-qualified professional.
Advice from experts
Getting quotes from tradespeople to fully cost out the work is key to planning a renovation and running a project to budget. It may also be more efficient to get professionals to carry out the work, rather than trying to be the expert in all areas.
Likewise, it makes good sense to consult a mortgage broker experienced in financing buy-to-flip acquisitions. This will help you get the right loan for your needs – such as one that offers a honeymoon period of lower repayments at the start of the loan. Getting the right loan in place can help set you up for success!
Contact BP from Anvil on 0413 398 878.
© Advantedge Financial Services Holdings Pty Ltd ABN 57 095 300 502. This article provides general information only and may not reflect the publisher’s opinion. None of the authors, the publisher or their employees are liable for any inaccuracies, errors or omissions in the publication or any change to information in the publication. This publication or any part of it may be reproduced only with the publisher’s prior permission. It was prepared without taking into account your objectives, financial situation or needs. Please consult your financial adviser, broker or accountant before acting on information in this publication.
Towards 2019: what next for the housing market?
The Australian residential housing market has been highly variable this year, and we’ve seen some highlights as well as lowlights. We look ahead at what’s expected for the remainder of 2018 and beyond.
It’s been a tale of mixed fortunes in the nation’s housing market over the past 12 months. There’s been a downward slide in what were previously booming markets, as well as delight over growth in other areas.
Capital cities have mostly continued to soften – particularly Sydney, which has had a tough start to the year – yet some of our regional areas have reaped the rewards as homebuyers look further afield for value.
While houses have felt the pressure, apartment values in some areas have risen.
What’s more, whilst value declines were recorded for the more expensive half of the market, the most affordable end grew in value. It’s an interesting time, so we’ve taken a look at the key trends to be aware of in 2018.
The big winner: regional markets
Over the first quarter of the year, capital city values were down almost 1 per cent compared to a 1.1 per cent lift in regional dwelling values, according to NAB’s April 2018 Australian Housing Market Update.
The combined regional markets have been outperforming the capital cities since October last year, with the strongest annual growth rates recorded in the regions around Melbourne, Sydney and Canberra.
Victoria’s Geelong recorded the highest capital gains in the country over the past 12 months, with dwelling values up 10 per cent, followed by NSW’s Southern Highlands and Shoalhaven region, which rose 9.5 per cent.
The Capital region in south-east NSW including Queanbeyan rose 8.3 per cent in the same period, as did the Newcastle and Lake Macquarie regions.
Driving the reduced demand in the cities is widely acknowledged by commentators nationally as recognition of opportunities in regional areas.
As NAB’s Housing Update team put it in the April Australian Housing Market Update, “it seems buyer demand has rippled away from the capitals… towards areas where housing is more affordable but also jobs, amenity and transport options are reasonably plentiful”.
Apartments gain attention
Interestingly, there has been a demand for units over houses, with unit values now outperforming house values in certain areas.
It’s a subtle difference when you look at the combined capital city figures over the March quarter – while house values are down one per cent, units are down a more moderate 0.7 per cent.
But those differences are more significant if you look at Sydney and Melbourne, where housing affordability pressures are clearer. As the report also shows, Sydney’s unit values are up 1.9 per cent over the past 12 months while house values are down 3.8 per cent.
Despite more positive results, the trend in Melbourne over the last 12 months is similar, with house values only rising 4.9 per cent, compared to the 6.6 per cent climb of units.
However, the trend is less pronounced or even reversed outside of Sydney and Melbourne.
The Brisbane housing market was flat over the first three months of the year, continuing the sedate pattern of a decade that’s seen dwelling values rise at an annual rate of just 0.9 per cent. Over the last 12 months, houses have performed better in value – with a rise of 1.8 per cent compared to a fall of 1.4 per cent for units. This is likely due to concerns of an apartment surplus in the city.
However there are predictions that this situation soon change, with unit construction having peaked in 2016. “Population growth is ramping up which will help support an improvement in the unit market’s performance,” according to NAB’s April update.
State by state: a breakdown
Perth is showing signs of improving conditions – a turnaround for a market that peaked in June 2014 and has since seen dwelling values fall 10.8 per cent. The median dwelling value here is the lowest of the four largest capital cities. Dwelling values posted a rise in March (up 0.3 per cent) but units continued to fall (down 2.2 per cent over the quarter).
Hobart is the star performer and it’s a trend that’s expected to continue this year. Dwelling values were 1.7 per cent higher in March to be 13 per cent higher for the year. Adding more fuel to the fire is the plummeting listing numbers in the market – down 36 per cent compared to a year ago – leading to rapid sales. “With low stock levels and high demand, Hobart is truly a sellers’ market” according to the update.
In Adelaide, growth has been flat but dwelling values are up 1.7 per cent on 12 months ago and there are some positive signs. “Jobs growth has been ramping up across SA, which should help support a turnaround in migration that could buoy housing demand” the update predicts.
What’s next?
While there’s unlikely to be a major upturn in Sydney and Melbourne any time soon, signs point to a reasonably soft landing and stabilisation in other markets, according to the Housing Market Update.
Property experts are predicting further house price falls in NSW and Victoria but are more optimistic about Western Australia and Queensland.
NAB Chief Economist Alan Oster says stronger performances in some markets won’t make up for the decline in Sydney and Melbourne, predicting little improvement in the overall house price for the year.
“Strong performance in Tasmania and to a lesser extent in regional areas, along with higher confidence in the West and Queensland, won’t offset the aggregate effects of lower prices in Sydney and Melbourne,” he says.
Contact BP from Anvil on 0413 398 878.
© Advantedge Financial Services Holdings Pty Ltd ABN 57 095 300 502. This article provides general information only and may not reflect the publisher’s opinion. None of the authors, the publisher or their employees are liable for any inaccuracies, errors or omissions in the publication or any change to information in the publication. This publication or any part of it may be reproduced only with the publisher’s prior permission. It was prepared without taking into account your objectives, financial situation or needs. Please consult your financial adviser, broker or accountant before acting on information in this publication.