Tuesday, April 30, 2013

The Right Time to Buy?

The right time 

Predicting the perfect time to buy is difficult, even for the experts, yet many investors get caught in the fear of buying at the 'wrong time'.

The truth is that when to buy is not nearly as important as actually buying a property, particularly if you are planning to hold onto it long term. As long as you are prepared to keep your property through the good times and the bad, you needn't worry too much about temporary shifts in prices because it is still likely to end up being profitable in the end.

If there's a timing issue that's important, it's getting your personal timing right: are your finances ready, do you have a plan...

Do you have a plan?

Write down your goals for property investment - do you want to become a landlord or would you rather renovate and sell properties? Do you want a positive cash flow property, a high capital growth property or a balanced investment? Be clear on what you are seeking to achieve and what type of property fits your strategy.

Are your finances ready?

Your finances should be in place before you go shopping for a property. As your mortgage adviser we can help ensure your finances stack up, which will narrow down the most suitable areas for your research efforts.

Have you researched?

As an investor you need to use statistics to not only find the right suburb but also the right property within the suburb. Look for areas with low vacancy rates, broad buyer and tenant appeal, high employment and good transport links.

Are your emotionally ready?

You need to be prepared to put your emotions aside and think like an investor, not a home owner. The property you buy doesn't need to be one you love, or even particularly like, as long as it meets the needs of the rental market. You also need to be detached enough to walk away from the property if the deal doesn't work out the way you wanted.

Are you prepared for risk?

Events such as a major repair, employment change, extended sickness or sudden interest rate rise could put you in an uncomfortable financial situation. Make sure you are ready for the ups and downs of investing to ensure that your journey as a property investor is a long and profitable one.

Have you sought good advice?

By talking to experts you will be able to avoid many of the pitfalls that inexperienced investors encounter. As your mortgage adviser we can help guide you through the property investment process and refer you to expert advice where required.

Tuesday, April 16, 2013

Self Managed Super: A Growing Trend

Self Managed Super: A Growing Trend

Lenders continue to launch new loan products to cater for the soaring popularity of self-managed super funds (SMSFs).
With many of the features of regular home loans, these products entitle trustees to borrow within their SMSF to buy residential investment property or refinance an existing SMSF loan. The loans are repaid from rental incomes and contributions paid into the funds.

Since the laws were changed in 2007 to allow SMSFs to borrow funds to acquire residential property, this type of property transaction has become increasingly popular. Currently more than 800,000 Australians invest around $280 billion of superannuation through the SMSF structure and this is a trend that is expected to accelerate. SMSFs make up around one-third of the overall superannuation sector and have an asset value of $14.87 billion.

One of the many attractions of a SMSF is that is puts you in the driving seat and allows you to do something pro-active about your financial future. As the trustee of the fund, within the boundaries of the law, you have the flexibility to decide how your funds are invested and how the fund is to operate. Unlike the ups and downs of the share market, property investment provides the security of yielding positive returns for investors, especially if it is a long term investment.

Better tax management is another attraction as investing in an SMSF has numerous tax advantages. There is also the ability to pool funds with up to four members, which means family members can pool their savings to buy a property that would otherwise be beyond their reach.

Data from the Australian Taxation Office shows that more than 3,000 SMSFs are set up every month and that the sector is growing at a rate of 10% a year. In the four years to 30 June 2012, the SMSF sector grew by $109 billion, which makes it the strongest growing sector of the superannuation industry.
The statistics show that SMSFs have truly positioned themselves as one of the most popular forms of superannuation savings. If you are tempted to join this growing trend, speak to us today about how we can help you set up your own SMSF.

Give Premium Broker a ring and we can help with getting the finance approved for a SMSF and even put you in touch with specialists if you need to set one up.