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ABOUT HOW TO PROPERTY

All Things Property Investment in Australia

What is How to Property?

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How to Property aims to be your go-to resource to assist you with everything you need to know about property and growing your wealth. From negotiating the best home loan deals, to saving money on the property purchase price, to using the best investing strategies to get ahead – we’re here to help you, every step of the way.

As an Australian-owned, subscription based website, How to Property is a resource where you can educate yourself on how to invest strategically in the Australian property market. How to Property boasts an experienced, knowledgeable and creative research team, sharing the most competitive, current and relevant information curated from multiple reputable sources.

We aim to be the premier portal for all investment property advice, to answer all of your needs to do with property investing Australia wide.

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How can How to Property help you?

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Are you considering investing in property or buying your own home? How to Property may be able to introduce you to strategies, ideas and concepts that benefit you.

For instance, many people don’t know that the four big banks in Australia don’t always offer the best variable rate, and that smaller lenders may offer a better deal in the market. We regularly interview finance and mortgage broking experts for the latest advice and trends in property lending, to show you how you may be able to save money on your investment property.

Overall, by helping you to expand your research and knowledge bank, How to Property may be able to show you different loan product types that suit your needs and assist you to develop your overall financial strategies for ongoing and future investments.

It’s also our goal to provide you with ongoing access to experts in other areas, such as property management, financial management and insurance, to answer any questions you have in regards to investing, property management and being a landlord in Australia.

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Why choose investment property?

How to Property knows that the most popular and secure form of investment that Australians turn to, continues to be property investing. To secure your financial future, building wealth through real estate and property investment is a popular and proven strategy for success. How to Property’s experienced team knows this only too well, as we are all property investors ourselves.

Shares are transparent when making an investment in a company, but with real estate unlike a share price, values aren’t set due to the nature of property investment and changing markets. The advantage to the lack of transparency is clear for those who do their research and investigate what property is selling for in each area, as you may be able to negotiate and buy the right property below market value.

Don’t be fooled into believing that property investing is a completely safe road to travel, however. Often, people make the mistake of thinking that property investing is a fast track to getting rich quickly. The reality is, in most cases, educated property investment takes time to gain you the financial rewards you are seeking. This is only achievable if you do your research.

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How to Property realises that the gains available definitely outweigh the risks, which makes it the main reason buying investment property remains the number one wealth creation strategy in Australia. When you know what you’re doing, it is a straightforward and simple way to grow your wealth, and after tax benefits are considered, the cost of buying an investment property is relatively low.

Long term, the team at How to Property know that investing in real estate is all about growing your capital. Choosing the right property and knowing where to buy investment property is crucial to achieve this goal. How to Property will guide you on everything from researching the market and how to buy investment property with the best investment loan rates.

With an ongoing education, you’ll learn to tell the difference between ‘cheap’ property and affordable, under-market property opportunities.

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Why choose investment property?

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Undoubtedly, paying the right price is one of the most important factors when making your investment decision. How to Property will educate you for the best property investments and who to go to for the best investment interest rates.

Never buy investment property in an area you haven’t thoroughly researched first. Where to invest in property relies on your knowledge and expertise to know your investment property market prices and knowing how to identify a healthy property market before investing in property.

Real estate marketing companies may try and sell you property at hugely inflated prices. What you may not know is that they can be paid handsomely and receive high commissions, to market overseas and interstate investments in areas you that won’t be familiar with. Don’t be fooled.

Ultimately, you don’t want to buy the wrong investment as that can lead you down a path toward financial difficulty. So, do your homework and if you aren’t sure of a property’s value enlist the help of a reputable and independent valuer for property investment advice first. This can be organised through a small lender or bank, or directly, if you’re prepared to pay their small fee yourself. Information is key and with the right keys you can often negotiate a better price.

Why do you need an investment strategy?

How to invest in property is about knowledge and helping you to educate yourself. Asking can I afford an investment property in the location that I want to buy is a great first step, but you also need to devise your own investment strategy.

There are many great locations for property investment Australia-wide and you can gain valuable data from a range of resources, when deciding how to buy an investment property. It’s our goal at How to Property to curate all of the latest information and most up-to-date sources into one place, so you have all the information you need at your fingertips.

For example, just because you may receive your first investment property tax deduction by investing in a high-depreciation, new investment property doesn’t mean that is necessary the right property for you.

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This is possible due to negative gearing. How does negative gearing work? What is negative gearing? In summary, negative gearing gives you tax benefits due to loss of money on your investments. Tax benefits are derived from depreciation, maintenance and loss of profit.

Basically, when your income doesn’t exceed the cost of your investment you will be able to deduct this amount against your income tax. If your property costs you $600 per week, but your rent is only $450 per week, then your $150 ‘loss’ can be claimed against your income tax.

The advantage of negative gearing Australia wide is that our laws let us deduct these losses so we are able to reduce the amount of tax that we are required to pay. However, when you’re becoming a landlord, don’t simply consider the tax deductions; investment property is about much more than tax.

There are many factors to take into account and How to Property will reinforce that you need to educate and research before investing.

How to Property may also be able to work out how to find the right property, to suit the demographics of the people living there. Homes close to schools and parks with large back yards will attract families with children, while quiet streets will always be more popular than properties on busy roads. City apartments close to universities may attract students or businessmen with a disposable income. These are the kinds of trends and demographics you need to be aware of.

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Equity

Equity in your existing property, whether it’s your home or an investment, can be used to finance other property purchases with a line of credit loan. If your property is worth $500,000 and you have a loan worth $400,000 then your equity is $100,000.

You may ask, what are line of credit loans?

Equity in your home, also known as home loan equity, enables you to borrow money against your existing assets. The amount of credit you can borrow is calculated on the value of your home, minus what you owe.

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If you need to do renovations, further your investments by purchasing more property or for personal reasons, a line of credit may be the way to go. How to Property can help you research the various types of loans on the market, to decide what type of flexible mortgage will ideally make your investments work best for you.

Home Loans

How to Property uses a range of resources to help you find the best home loans Australia wide. We can help work out how to find the best home loan to suit your needs, with the right tools to compare and find the best home loan rate.

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No longer do you need to go to one of the four big banks to find the best home loans. We want to help you to make the right decisions, stripping away the confusion when looking for the right provider to give you cheap home loans and preferred loan terms.

To make that decision, start first by knowing how much you can borrow. You will have ‘how much can I borrow’ home loan questions, which you can answer by using borrowing calculators and other resources. When working out how to get a home loan with the right lender, knowledge is power – so we aim to educate you about all aspects of the process.

In this way, How to Property will also teach you about loan to value ratio, referred to as the LTV ratio which is a risk assessment financial establishments and various lenders will assess prior to approving your mortgage.

How to Property can also assist you with self employed home loans and investment home loans. If you’re a small business owner you’ve already proven your business savvy and would understand that you need to get your dealings right to run a successful business. This is no different when it comes to selecting the right home loan. Being self employed you’ll need to give the bank detailed information such as your tax returns for the last two financial years.

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How much do you need for a house deposit?

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The majority of lenders and banks in Australia need you to have between 5-20% of the property purchase price available as your deposit.

For example, if you’re looking at a property valued at $500,000 you’ll need $25,000 as your minimum deposit, up to $100,000 for a 20% deposit.

Every home loan has LVR requirements. You’ll need to work out which loans you will be eligible for by knowing your maximum loan value.

Once you have calculated your borrowing capability you can then research the types of loans available to you and find the one that fits your requirements.
It’s important to have a clear credit history, steady employment and few (or better still, no) bad marks against your credit file. Holding down a full time job with a minimum of at least six to twelve months will greatly improve your chances of gaining loan approval.

A good income will also show lenders you are a reliable risk, as will a low value of personal debts. If you have too many credit cards or personal loans, which total more than seven percent of your property purchase price, then lenders may not approve you.

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Are you a First Home Buyer?

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How to Property will give you a ‘first home buyers guide’ or ‘overview’ to help you navigate the road ahead. First home buyers can substantially benefit from tax exemptions and other concessions offered by various states and territories in Australia when it comes to first home buyer stamp duty, with the exception of the Northern Territory and Tasmania.

So what is stamp duty?

Stamp duty is a cost that everyone investing in or buying property will need to pay. It is one of those inevitable expenses that eats into your initial investments, but one you have to learn live with.

In Australia stamp duty needs to be paid thirty (30) days after the date you signed your documents and purchased your investment property. Stamp duty is a government tax you will legally have to pay when you purchase assets such as real estate, cars etc as a business asset.

You can also be charged stamp duty for gifts, some insurance and home loans. This tax is paid at a flat rate calculated by the value of your investment. You will pay stamp duty when you sell a property, transfer land even if you receive land as a gift.

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In Australia stamp duty is different depending on where you buy, because the levies are set by our states and territories, which can be confusing. How to Property will show you the rates payable for every state and territory and guide you towards any concessions and rebates. There may be concessions for sales off the plan, where you reside, family farms, new farmers, first home buyers, deceased estates and pensioners. This information can be found using How to Property.

Mortgage stamp duty is the duty charged on the amount secured by your mortgage.

In, Victorian first homebuyers receive a 50% stamp duty discount on any property investment valued up to $600.000. New South Wales residents get an exemption from stamp duty with new investments priced up to $550,000 and discounts for new homes priced between $550,000 and $650,000.

How to Property can help you stay up-to-date on any changes within these first home buyer grants, while also giving you the information and calculations you need to make informed decisions. If you are wise and use stamp duty discounts and government incentives to your advantage you can save yourself a fortune. Do your research and use the information provided on How to Property to your advantage.

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Considerations when Buying a House

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The first thing you will need to do is research where you want to invest in your property. Familiarise yourself with the area and the prices properties are selling for. Always try to visit the property you want to invest in personally. Nothing beats a close up inspection to see your properties actual potential.

You will then need to work out how much you can afford to spend by working with a mortgage broker to calculate your borrowing potential, along with the money you will need up front. You can also work out what your repayments will turn out to be.

The state of current Australian interest rates and the overall state of the market can also influence a property’s value. Current market conditions will ultimately decide for you what a property is worth and what people are prepared to pay. Of course, experienced agents in the suburb you are searching are able to give you the best indication of property value, so leverage off their experience. If you are selling, always get three separate valuations to determine the value.

Ultimately the market will decide what it is prepared to pay, but you need a realistic starting point – and you never know a vendor’s motivation for selling. Their motivation can translate to be a powerful price reduction incentive. Always be sure to ask the real estate agent why the vendor is selling, as it may give you valuable insights that can give you the upper hand during price negotiations.

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At How to Property, our goal is to provide you with all the information you need to ascertain fair market value and negotiate hard to secure a strong discount. Once you have bought your home or investment property and settled into a repayment schedule, you may wish to do future renovations, repairs or even embark on a subdivision or development.

How to Property aims to assist you by giving you access to all of the knowledge and education you’ll require, to help you with smart and concise research. It is important to arm yourself with as much information and data as possible Buying a house in Australia.

What you need to know about buying at auction

Note that there are a number of key tips for buying a house at auction, such as researching the area you want to buy in, looking at what property is selling for in that area and going to other auctions to learn the ropes.

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Make sure you seek out legal advice and organise your finance in advance, and ideally have at least 10% deposit ready before you start property shopping. Set a limit that you can affordably spend and stick to it.

Also, don’t get emotionally attached to a property as in the process, you could get caught up in the bidding frenzy and go over your limit. You need to be intelligent when investing in property on auction day. Doing your research on How to Property regarding auctions will teach you to approach buying a house at auction with confidence not allowing other bidders intimidate you on the day.

If you’re wishing to purchase a property before auction you will need to give your solicitor the properties contract to look over and notify the seller of your desire to buy first.

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