February 25, 2018

Effective Ways to Pay Off Your Mortgage Fast

A mortgage is one of the regular expenses that take the lion’s share of the monthly budget in many Australian households. It’s a necessity and sometimes, it takes a long time before you can fully pay for your home. But the good thing is, there are several ways that you can pay off your mortgage sooner. By making some changes, you’ll finish paying it off more quickly.

In this article, you can learn effective ways to pay off your mortgage fast:

  • Make sure that your mortgage repayments are in line with your salary schedule. One way to pay off your mortgage sooner is to align your repayments with your income. In other words, make your repayments every two weeks if your job pays your salary every fortnight. In this way, you can reduce the interest payable and save more money over the duration of your loan.
  • Increase the frequency of your mortgage repayments. Instead of making monthly repayments, consider making them twice a month. Not only will you be able to reduce your home loan term, it will also enable you to get significant savings on interest charges. The additional payments will help you reduce your loan balance sooner and can cut your loan term by up to six years. To illustrate: If you make monthly repayments of $2,000, you would have paid $24,000 by the end of the year. But if you make bi-monthly repayments of $1,000, you would end up with $26,000 (26 fortnights). That’s an additional monthly repayment that will enable you to pay off your mortgage sooner than expected.
  • Check the interest calculations. The interest on your mortgage is calculated using the outstanding balance. If you increase the frequency of your repayments, you can reduce the amount of interest that you need to pay.
  • Evaluate your existing home loan. Over time, it’s better to perform a mortgage check to see if it is still suitable for your requirements. Bear in mind that your mortgage is affected by several factors such as interest rates. It can be that a home loan with a variable interest rate is better than with a fixed rate. If this is the case, you may want to consider re-financing, either with your current lender or a new one.

Do you have other ideas on mortgages and real estate in Australia? Share your real estate advice in the comments section.

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What is the Best Property Type for Your First Home?

Australia’s house prices tend to rise over time, making real estate a popular investment. There are a lot of exciting options in the real estate market for a first-time buyer. Homes come in different forms, with each having its own benefits and limitations.

Here are some basic options and pointers to help you find the property that will best suit you.

A small home on a subdivided lot

If you prefer a location close to the city, and the size of your home is not your main concern, a side-by-side, front-to-back duplex is for you. This type is typically found on suburban blocks that once had a single house before they were divided into two homes due to the value of the land.

A large house in an outer suburb

If you like a bigger, more modern house, a home in an outer suburb is for you.  The main advantage is that you get more space for your money. Houses in the outer suburbs normally have several bedrooms, multiple bathrooms, and double garages, so there are a lot of internal and external space for you to enjoy.  The disadvantages are that you might have to spend more time on transportation to get to your job in the city, and public transport and local amenities are limited in suburban areas.

A unit in a small block

This is also a great option for home buyers who want to live in the city. There are no costs in maintaining a garden if you live in a small block. There is easy access to facilities and public transport. However, you need to pay body corporate fees, and you also need to share building repair expenses.

An apartment in a high-rise building

The advantage of an apartment in a high-rise block is that it is in the city, so you can save time and money on transportation. This also offers modern fixtures, fittings, and amenities. The downside is, it comes with body corporate fees.

A townhouse or villa unit

If you prefer location and amenities, townhouses or villa units are a good option. Gardens or pools are managed by a strata manager.

Got other ideas on real estate in Australia? Share your insights in the comments section.

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Simple Tricks to Add Value to Your Home

Real estate in Australia is an ever growing industry. More and more people want to enter the market as they buy their own home or purchase property to be rented out. Investing in real estate involves a great deal of money, and it only makes sense to come up with ways to add value to your home so you can get more out of your investment. But what are the things that you can do?

These tricks are simple enough, you don’t really need special or technical skills to pull them off. When done properly, your real estate investment can be a lot more valuable should you end up selling it.

Make some easy kitchen fixes

A lot of home buyers are drawn to nice kitchens. You can buy new cupboard doors and handles, and taps to update your kitchen. You can also replace the benchtop. Bear in mind, however, that it should work well with the colour and pattern of the kitchen floor.

Replace splashbacks

This alone can bring a huge impact to the overall look of your kitchen. One of the popular types is the glass splashback, though it can be pricey. A cheaper one is acrylic that comes in different colours, so you can easily add a personal touch to the area.

Give rooms some new paint

A good paint job is an inexpensive way to add value to your home, especially if you’re going to do it yourself. You may want to paint the walls one room at a time. It only needs a few hours in between coats. In general, if you start painting the walls in the morning, you’ll be finished with one room at the end of the day. But if your budget permits, hire professionals to do the work for you, especially painting the ceilings which can be a tricky part.

Update the entrance

First impressions last, so make sure that the first thing that people will see in your home looks visually appealing. A fresh paint on the front door can instantly lift the look of the entrance. Clean the surroundings and check if your letterbox and fence, if any, need some quick fixes. Also, make sure that your garden is well-maintained. Remove weeds, and you can add some nice potted plants.

Do you know other tips to add value to your home? Share your real estate advice in the comments section.

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What is rentvesting and is it a good idea?

Who doesn’t want to have their dream home? Owning a home is a great achievement. However, with the ever increasing prices of real estate in Australia, it has become difficult to enter the market. People who cannot afford to buy their dream home enter the real estate industry through rentvesting.

This is the process of renting a home and investing in property that you can afford. If your dream home is a three-bedroom home in the city centre, the prices obviously are high and you may not be able to afford it as of the moment. With rentvesting, you will rent the property that you want then buy a property in an area where prices are within your budget. You can turn it into investment property which can help you pay your rental payments.

Is rentvesting a good idea? Here are some points to think about:

Your purchasing power doesn’t affect the lifestyle that you want.

Rentvesting enables you to live your preferred lifestyle and at the same time, have an extra income and build your property portfolio.

You can have a property sooner and with a smaller deposit.

Rentvesting allows you to enter the property market sooner, which will help in building equity. Eventually, you can use the equity to buy another property as investment.

Buying an investment property offers tax advantages.

Rentvesting comes with deductible costs such as interest payments, property maintenance, insurance, as well as depreciation. Take note that it is better to seek advice from an accountant so you will better understand the taxation advantages that you can get from your property.

You can make smart decisions when purchasing a property.

Buying a home comes with a lot of emotions since it’s your dream and you already have a picture in mind of the kind of life that you and your family will have when you live in the house. On the other hand, buying an investment property doesn’t come with emotions that you have when buying your dream home. When it comes to the investment property, you think about its potential ROI.

So, is rentvesting a good idea? It really depends on your goals. Bear in mind that this method of entering the real estate industry is not for everyone. Make sure to understand how investing in real estate works and determine if rentvesting will work well for you.

Do you think rentvesting is a good idea? Share your real estate tips in the comments section.

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More affordable options to enter the property market

Getting into the world of real estate investment obviously costs money, and with the ever increasing demand for houses and properties, you can expect real estate in Australia to become more expensive especially in prime locations. But this does not mean that you cannot go into the real estate industry. There are actually several more affordable options that you may want to look into so you can get started with investing. Here are some of the options to take into account:

1. Family equity loan

In this option, parents can serve as guarantors on a loan and even offer their home as security, while the principal borrower’s name will be on the loan as well as in the title.

2. Buy with other people

This option involves more than one buyer of the property. It can be with family or friends and the loan will be split among them. Bear in mind that banks implement different rules when it comes to lending and joint loans so make sure to study the terms carefully. You can also ask a lawyer to explain things that you’re not sure of. Also, buying property with other people can be risky. It’s essentially a business partnership and challenges may arise later on if one of you wants to sell the property, for instance.

3. Rentvesting

Enter the market sooner with this option that involves renting where you want to live while buying affordable property and putting it up for rent. Since the property is cheaper, you may not need to save a lot for the deposit. The major advantage of this option is that it enables people to live where they want and at the same time, use the investment property to grow their savings.

4. Consider properties in regional or rural areas

In general, homes are more affordable in rural areas compared to those in cities. Of course, it’s a matter of preference but as far as affordability is concerned, this is a good way to enter the real estate industry without shelling out a lot of money for deposit. Just make sure that the property is suitable for your needs and lifestyle.

These are some of the affordable options that you can consider if you want to enter the market and you don’t have enough funds for the investment. Do your research and choose which option works well for you.

Got other tips on investing in real estate investment? Share your real estate advice in the comments section.

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How to Search for Your Dream Home and Stay within Your Budget

Buying real estate in Australia is a milestone that needs careful consideration. After all, it costs a lot of money, and a lot of factors come into play when investing in real estate. When it comes to your dream home, you obviously look out for various details to ensure that your home has everything you wish for. But before you get caught up with all of these, make sure to keep these guidelines in mind so you can find your dream home while staying within your budget:

Know your budget and stick to it

As with buying any other major purchase, it is always important to determine what you can afford and stick to it.  It is very easy to get carried away, especially when details of your dream home are concerned.  Just think about what you can spend on your dream home and work around that amount.

Identify your needs

Do you wish to move in right away or do some renovations? This is an important factor as it will affect the type of home that you look into.  You can stay within your budget if you will get a house that’s ready for moving in. However, make sure that it meets your dream home requirements.  On the other hand, it will cost more money to buy a home that you want to customise to fit your needs. Take note that if you’re looking at a house and it’s close to being beyond your budget, you won’t have any funds left to renovate it.

Choose the right builder

With so many builders out there, it is wise to do your research before investing in real estate. Look for one that has been in the industry for several years. Have a shortlist of potential builders and check their portfolio. You can also seek advice of family members and friends who have experience in investing in real estate in Australia. It is likewise important to ask about insurance and warranties.  Getting a building permit is usually done by the builder, but confirm it just in case.

Check the neighbourhood

Make sure that the community suits your needs. Check if establishments such as banks, local shops, schools, and restaurants are near your area.  Proximity to major roads and public transportation is also one thing to consider. You can likewise talk to residents so you will have a clear picture of what it’s like to live there.

Got other real estate tips? Share your ideas on investing in real estate in the comments section.

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10 Features of a Good Suburb

The real estate industry in Australia is continuously growing, with more and more homes and real estate investments being offered to people with varying needs and preferences.

If you’re looking for a good suburb for residence or you’re investing in real estate, you’ll find a wide range of resources online, informing you about what to look for. But what does a good suburb entail? Here are 10 features that you may want to take into account:

1. Location

If there’s a single real estate advice you can get, it’s choosing the right location. A game-changer in the industry, the location should be at the top of your list. A good suburb is located in an area that is surrounded by or close to establishments and facilities that you need for your everyday life.

2. Easy access to transportation system

Whether you have your own car or not, it pays to be close to main roads and public transport links, particularly buses and trains.

3. Schools and centres for child care

Families usually look for areas that are close to good schools and child care establishments.

4. Employment opportunities

A good suburb is near offices and other establishments that offer employment for people in surrounding areas.

5. Recreational facilities and parks

Another feature that makes for a good suburb is the availability of amenities and areas where people can play sports or do their hobbies and interests. These can include basketball courts, jogging and/or cycling paths, etc.

6. Shops and supermarkets

The presence of a range of retail stores and supermarkets significantly adds amenity value to a suburb.

7. Hospitals and medical facilities

We need medical care at certain points in our lives so it is essential to live in an area that is near hospitals, clinics, and other medical facilities.

8. Population demographics

If you have kids, you may want to live in a neighbourhood with families and children as well. In this case, the age and structure of the population add value to a suburb.

9. Views

It may not be a basic necessity but for others, views matter when it comes to looking for a good suburb.

10. Mix of housing types

An area with numerous rows of identical homes is not that appealing to a lot of people. A good suburb should have a good mix of different types of houses with their own property attributes.

Got other things worth considering about real estate in Australia? Share your real estate tips in the comments section.

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Top 5 Tips When Buying a Property at an Auction

Buying a property at an auction can be a roller coaster ride. The tough competition in real estate in Australia makes property auctions overwhelming for buyers. If you don’t have enough experience in home buying, auctions may not be for you. Aside from the possibility of losing hundreds of dollars, it can be hard for you to deal with the fact that the home you’ve come to love is not within your set budget.

Should you decide to invest in real estate in Australia through an auction, arm yourself with knowledge to lower the risk of financial loss and emotional damage. Here are five tips to consider:

  1. Visit auctions before bidding. Auctions present a certain degree of uncertainty, so know what you’re getting yourself into. Besides, buying a home is an expensive affair so it is important to learn what you can about auctions before making any bids.
  2. Seek professional advice. A lawyer can be really helpful when buying a home as he/she can better explain the contents of any legal document and even speak to the agent on your behalf.
  3. Set a budget. Emotions are running high during auctions that you may make bids above your budget, especially if you really love the home. Your maximum limit can be the amount of money that you can borrow from a bank. Some get pre-approved loans before going to an auction to ensure that they will not bid more than their budget.
  4. Check everything. Auctions come with agents who can mislead you by giving you a quote and even fraudulent bids. Be cautious and make sure to check everything thoroughly. Also, ask questions, but when asked, don’t give definite answers.
  5. Confidence is key. When applying for a job, you will most likely wear a business suit because as they always say, dress to impress. The same goes for bidders. First impressions last, and if you look professional and confident, your personal appearance can work in your favour.

When inside a room, you can sit up front or stand in the back to get a view of the competition. Also, make sure to call out your bids confidently, but do not fall into an agent’s trap by bidding too soon. Going slow on the bidding can push the seller to lower the reserve price, giving you a higher chance of buying the property within your price limit.

Got other tips when investing in real estate in Australia? You can share your ideas in the comments section below.

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Why You Should Consider Investing in Property Around Hospitals

Hospitals push up rents and help drive capital growth.

Popular communities have lots of services and infrastructure. Think schools, parks, businesses, public transport and hospitals. These services make the area an attractive place to live. As more people find an area attractive, property and rental prices rise.

Good suburbs don’t only attract more people; they also attract higher quality tenants. Higher quality tenants mean less risk, more long term tenancies, high rents and better returns.

This is why it always makes sense to buy property in suburbs that have excellent services and infrastructure, like hospitals.

Hospitals, however, have two additional advantage for property investors. They employ a lot of people, and draw a consistent supply of people who need to stay near by.

Large hospitals operate 24/7, and while the regular 9-to-5 worker may be happy to waste an hour each way travelling to work, shift works are less inclined to. After a gruelling night shift, the last thing you want is to spend an hour on the train. Hospitals provide an ongoing supply of fully employed people looking to rent in the local area.

There is also a lot of short term accommodation offered around hospitals for families or patients who need to spend extended periods receiving treatment. This takes some of the long-term housing supply out of the market, and increase the price of whatever is left.

Both factors help raise rents.

Higher rent is will obviously give you more income in the short term, but if maintained, it will also drive capital growth in the long-term. Investors will always be attracted to quality areas, with high rents.

While no investment should be made purely on the basis of a single factor; such as the proximity to a hospital, it should be something to consider in conjunction with other relevant information.

In the short term, you should expect to pay more for high yielding areas. While it may be okay to pay a premium for a quality asset that will provide you with higher returns, you always need to balance out the cost vs benefits.

If you’re looking to make a real estate investment, consider suburbs around a hospital. There will most likely be higher rental demand which increases your yield and keeps prices growing.

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