We need to determine why we are investing? How does money assist in our process of being happy? Is knowing our “why” based around retiring earlier? Or is it to protect our family? Going on holidays more often? Being super rich?

Everyone has a different “why” reason! Not everyone wants all of the above, some even don’t want the above and have different reasons. However, knowing your “why” will give you a financial purpose and a greater goal to achieving success.

MORE INFO:
Rick Nieuwenhoven
CEO
e: rick@nieuvision.com.au

– – – – – –

Disclaimer: We recommend that you seek independent financial and taxation advice before acting on any information in our articles and newsletters. They contain general information only and have been prepared without taking into account your personal objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.

The post Knowing the “Why” to Your Investing Will Make Your Money Choices Simpler appeared first on Nieuvision.

Research conducted by the Housing Industry Association (HIA) in 2015 and recent statistics released by the Australian Taxation Office (ATO) revealed some surprising statistics about investor incomes that might make you rethink your assumptions.

Let’s take a closer look at some more property investment statistics to see just what the average Aussie landlord looks like…

The Australian Taxation Office (ATO) published figures in 2015 showing there were 1.7 million landlords in Australia. That means around 1 in 7 Aussies is a property investor.

You might also be surprised to learn that the majority of Australian property investors fall within the low- to middle-income brackets.

The statistics showed that almost 75% of Australian landlords earn a taxable income of $80,000 or less. They’re not super rich. They’re just average mums and dads, but they have at least one investment property.

Who Is the average investor?

Recent research conducted by property analyst Michael Matusik revealed that more than 80% of property investors purchased residential property in the hope of achieving long-term capital gain.

ATO statistics also show that 63% of landlords are negatively geared. In other words, the costs associated with owning the investment property are higher than the rental income they receive from the tenants.

Even if you take the net rental loss out of a family’s total household income, statistics show that around 33% of people who take advantage of negative gearing have a total income less than $52,000 a year.

It just goes to show that buying an investment property isn’t just reserved for the rich!

How many properties does the average investor have?

In the same way that many people seem to believe that property investment is only for the rich, most people also assume that landlords with more than one property must also be rich.

Let’s take a look at the statistics to see how many properties different landlords own.

The ATO released statistics showing that around 2 million Australians own an investment property. Approximately 10% of those landlords own three or more properties.

It’s believed that the record low interest rates has made it easier for many people to enter the investment property market and focus on building wealth for their future.

It’s also interesting to note that for the first time since records began more first home buyers are also more likely to buy an investment property rather than moving in as an owner occupier.

Statistics released by the ATO also show that younger landlords aged between 18 and 24 own two properties on average.

When you consider the implications of the statistics, it shows that starting early offers property investors more time to build equity and take advantage of capital growth.

Reading through lists of statistics might not seem so exciting at first. However, when you look at the reality behind those numbers, it’s clear that plenty of average Aussies on average incomes are taking advantage of the benefits associated with owning an investment property.

If you’re ready to take control of your financial future, call Nieuvision today and ask how we can help you get started with your own property investment portfolio.  Or to book a seat at Nieuvision’s next FREE property investment info session click here.

MORE INFO:
Glenn Loveday
Sales Manager
e: gloveday@nieuvision.com.au

– – – – – –

Disclaimer: We recommend that you seek independent financial and taxation advice before acting on any information in our articles and newsletters. They contain general information only and have been prepared without taking into account your personal objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.

The post You Don’t Have to Be Rich to Invest in Property appeared first on Nieuvision.

Property investment loans

In the second week of February, the Australian Prudential and Regulation Authority (APRA) issued a warning to Australian banks about the increase in lending for the purpose of property investment across the country.

Throughout 2016, APRA tried to slow the rate of investor lending across the country. APRA set annual lending growth limits and benchmarks that the banks were forced to adhere to. The result led most banks to increase interest rates for investment home loans in an effort to slow investor demand.

In response to APRA’s announcement, the Commonwealth Bank (CBA) has stopped accepting refinancing applications for investment mortgages beginning mid-February. The CBA issued correspondence to mortgage brokers on the 8^th February to advise them that the suspension would take effect on the following Monday.

Of course, the CBA promised to honour and process existing loan applications that were submitted before the February 13 cut-off date, but new applications will be denied, even from existing customers.

CommBank also announced that investors would also face an interest rate hike of 0.12% on interest only home loans that would take effect on the 3^rd April.

In a similar move, Bankwest also made a move to make changes to eligibility criteria for investors applying for investment home loans. Bankwest customers using negative gearing tax benefits would no longer be able to use those losses in applications for investment loans, effectively reducing the borrowing capacity for those customers.

Also in response to APRA’s warning, AMP announced it would stop accepting new investor refinance applications. In the same announcement, AMP also made it clear that investors would face an interest rate rise of .30% for interest only property investment loans, along with limiting investors to a 70% loan-to-value ratio (LVR), increase of the previous 90% LVR.

Yet not all banks have responded the same way. There are still some banks in the market encouraging applications from property investors.

ANZ Bank recently announced to mortgage brokers across the country that they would offer a cash rebate of $1,200 as an incentive to customers for submitting applications for new residential investment loans.

Likewise, BankSA announced a cash rebate of $1,500 to customers for submitting applications for new residential investment loans received before 31^st May 2017.

What does this mean for investors?

While some banks and financial institutions in the Australian market may be restricting applications from investors or penalizing existing customers by raising interest rates, there are certainly some banks out there willing to negotiate for great discounts.

Since the beginning of December 2016, 39 of the 84 lenders in Australia have increased variable interest rates on property investment loans. Plenty of other banks made their move on investment interest rates earlier in the year.  Overall, around 90% of banks charge higher interest rates on investment loans than the rates charged for an owner-occupied loan.

Yet research indicates that customers are still able to obtain competitive interest rates and loan terms by shopping around. A good mortgage broker has access to a broad panel of lenders and financial institutions, so it’s possible to discover deals you might otherwise have missed by staying with your existing bank.

In light of changes being made in the investment mortgage market, it makes sense to ditch the loyalty to one bank and start searching for the right home loan to suit your investment goals.

Happy hunting in an exciting market!

MORE INFO:
Rick Nieuwenhoven
CEO
e: rick@nieuvision.com.au

– – – – – –

Disclaimer: We recommend that you seek independent financial and taxation advice before acting on any information in our articles and newsletters. They contain general information only and have been prepared without taking into account your personal objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.

The post Is It Worth Staying Loyal to Your Bank? appeared first on Nieuvision.

Of course, no one has a crystal ball that allows them to predict with absolute accuracy which suburbs will perform best. However, there are some indicators to look for that could help you locate growing suburbs.

Here are our tips for choosing a growing suburb for your next investment property:

Supply and demand

The basis of capital growth across most property markets is the anticipated increase in demand. People choose to live in locations that are convenient for their needs, whether it’s for work, schools or lifestyle.

To make the most of those things, look for properties in close proximity to transport, hospitals, shopping centres, universities, child care facilities, parks, or other amenities.

When considering a suburb for its potential for increasing demand, look at locations that provide a range of conveniences and amenities that appeal to prospective tenants or future property buyers.

Ripple effect

It’s common for the most popular suburbs in almost every city to already have experienced a price peak following a boom, so buying in those locations could mean the opportunity for capital growth has already passed.

By comparison, suburbs around those peak areas have the potential to benefit from the ripple effect of the popular locations. It’s likely that neighbouring suburbs are poised to boom next as tenants and buyers begin moving to the next best option.

Infrastructure

Keep an eye open for any planned infrastructure upgrades or additions. Properties located near convenience amenities are always popular with tenants and buyers alike.

Look for areas near train stations, shopping centres, schools, or planned transport upgrades, such as new railway extensions, bus routes, or major highways, roads or bypasses. Likewise, areas with planned parks, lakes, bike tracks, child care facilities and other estate planning facilities are also highly sought after by families.

Most local councils and government transport organisations provide information on their websites about impending plans for infrastructure upgrades or additions that have the potential to impact future capital growth in those areas.

Think outside the square

It’s common for many property investors to prefer properties close to the areas where they grew up. However, there are massive opportunities outside of those immediate areas you could be overlooking.

The increase in the number of single-person or couples dwellings in recent years means the demand for smaller, low-maintenance properties is increasing in inner-ring suburbs around capital cities and beachside suburbs right across the country.

Professional couples seeking close proximity to work or couples downsizing out of the family home into low-maintenance properties with smaller yards are increasing the demand for such properties.

On the other hand, many families prefer living in more affordable areas that are often located in the outer ring of suburbs. Newer developments attract families to buy and rent newer homes with all the mod-cons at more affordable prices, especially if they feature family-friendly amenities that provide lifestyle options they need with convenient transport options for commuting to work.

If you’re searching for favourable, growing suburbs for your next investment property, take the time to look at a range of suburbs and locations. You might be surprised at the options available you might otherwise have missed.

MORE INFO:
Kym Russell
Finance & Property Consultant
e: krussell@nieuvision.com.au

– – – – – –

Disclaimer: We recommend that you seek independent financial and taxation advice before acting on any information in our articles and newsletters. They contain general information only and have been prepared without taking into account your personal objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.

The post Tips for Finding Growing Suburbs for Your Next Investment Property appeared first on Nieuvision.