With interest rates on hold again this month, many people are wondering where to next? Will we see them go down further or start to rise?

If you are a home owner wanting to do the best you can with your mortgage in the current economy, here are a few words from Mark Bouris of Yellow Brick Road.

Are you planning on making a switch or adjusting your current payments? Let us know, we would love to hear.

According to recent figures released by RPData, confidence in the housing market is improving and this is "showing up in improved development activity and demand for new homes."

On a National level this is great news for the building industry and the economy.  On a State level, "The New South Wales region is the driving force behind the surge in dwelling approvals with the latest August data showing a 48% lift in private sector approvals compared August 2012."

                                               View the full article by Tim Lawless here. 

Unfortunately many investors still overlook the benefits of claiming tax depreciation on their investment properties. Some key facts to keep in mind include:

• Ability to back-claim for previous years – if you failed to claim depreciation on your investment property in years past, the great news is you can still claim at least 2 years (in some cases 4 years) worth of depreciation by amending previous returns. This has the potential to boost this years tax return by thousands of dollars!;
  
  
• You don’t need to have spent anything on the property – tax depreciation is a paper loss, attributed to the fact that your property (the building and its inclusions) are ageing over time. You don’t need receipts, or costs, you just need a report from a qualified quantity surveyor;
  
  
• You can claim work you didn’t do – if you bought an investment property that had improvements or additions completed prior to your purchase, you get to claim the depreciation on those works. The great news is, as they are newer, they still have much more depreciation left in them and will generate higher deductions for you to claim;
  
  
• You can claim scrapping for items you threw out – if you have done some work on your investment property, such as replacing a kitchen or bathroom, flooring, or roof etc, not only are the new items you have installed depreciable, but you can claim the residual value on the items you took to the dump! You may think there is no value in those items, but many items are attributed new effective lives when you purchase the property and hold more “scrapping value” than you think. Don’t miss out on that extra cash!
  
  

For any further information about tax depreciation and how it can benefit you as the investor, don’t hesitate to contact the friendly team at Capital Claims on 1300 922 220, www.capitalclaims.com.au

After building up equity in your home, you may be using this to start or continue your investment property portfolio.

If you are starting to outgrow your home or on the opposite end of the scale, it is getting too big, are you considering making a move and turning your home into an investment property? Here are a few things to consider.

• Is it structurally sound? Inside and outside, are there any repairs that need to be done to not only make the house appealing to future tenants but also to make sure it is safe. Consider the bathroom, kitchen, outdoor steps or retaining walls, to name a few.
• Check the local rental ads, are there any properties in your area currently on the market? Take a look at the properties and make a note of the rental price. This will all help with your research and give you an idea of what rent you could ask for.
• Before you call your local property manager make sure you call your mortgage broker first. It is important to discuss your current mortgage and any investment loans you may have to make sure the right structure is in place before you make the switch from home to investment property. 

We offer the most friendly and accessible property management in Newcastle. Contact us and experience the difference today. 

Have you recently turned your home into an investment property? If so we would like to hear your helpful tips.

Have you been asking yourself the question... "Where do I start in selecting the right location for my investment property?"

You may already have a few suburbs in mind, so how do you pick the right one? Here are 5 tips that are sure to help.

1 - What are the current rents in the area? Check online through domain.com.au or realestate.com.au and see what a typical 3 or 4 bedroom home rents for. When you factor in the cost to buy or build will you receive a good rental return on your investment. Also keep an eye on the supply, if there are pages of rentals available in one particular area it may be a case that there is too much supply for the demand.

2 - Infrastructure. What is available in the area - schools, shopping centres, transport, entertainment - either established or soon to be developed. All of these features attract tenants.

3 - Link Roads, Expressways. Are the suburbs you are looking at close to major roads that potential tenants could use to drive to work. In the Hunter and Newcastle area, popular roads such as the Link Road and soon to be completed Hunter Expressway, are great roads to access for employment. 

4 - Take a closer look at the suburb, what are the houses like? Are they well maintained? Do you see majority houses or units? If you can, take some time to walk through the local shops and see who is living in the area. Google street view could also assist in viewing the area. Residents who take pride in their homes and community create a positive environment which will attract quality tenants. 

5 - Remember, you do not have to invest in your own suburb. Great investments are available state and countrywide. 

Do you have other selection criteria when you are deciding on an investment location?

Guest post by our Finance Guru, Wade Hooper from Inspire Property and Finance

Valuers are telling us that they have seen the bottom of the market which can only mean that prices will be on the way up.

House prices will not increase until interest rates start to increase so why not get in now before we see a turn in the market.

With the combination of low interest rates and the property market at its lowest, why wait? Taking advantage of the situation now will see an investor secure a great price and set themselves up for good capital growth.

Don't forget the NSW state government incentives that are now in place. All non- first home buyers and investors purchasing homes off the plan or a new dwelling up to $650,000 or vacant land up to $450,000, are eligible for a $5,000 grant. Further details available here.  


For the first home owner the conditions are just as positive. The new state government incentives provide great cash advantages. These incentives are directing more people to buy land and build houses and in doing so we will see an increase in land and house prices. Getting in now and making that purchase will get you ahead of the market. 

Whether you are an investor or first home owner don't delay, speak with your mortgage broker or real estate agent today. 

The stamp duty exemption may have expired but the State Government has introduced a new incentive to assist home buyers.

All non- first home buyers and investors purchasing homes off the plan or a new dwelling up to $650,000 or vacant land up to $450,000, are eligible for a $5,000 grant.

Under the NSW New Home Grant Scheme, this $5,000 grant is available as of the 1st July 2012 and was introduced to stimulate the construction of new homes in NSW.

When considering the costs of purchasing a property stamp duty is a factor that needs to be taken into account. However in the Hunter Region this grant goes a long way to compensating the buyer for stamp duty and other related costs. Another great point to remember is that there are no restrictions on the number of times a purchaser can apply for the grant.

Further details about the NSW New Home Grant Scheme can be found here.

Okay, so you have written down your budget. Your savings plan is underway and you can see those dollars increasing every week in your account. Fantastic, you are on your way to achieving your goal.

In preparation for your first property purchase there are a few more things to prepare and keep in mind other than your deposit.

Remember to keep your savings in a separate account, not just the account your pay goes into. This gives the proposed lender a clear view of your savings patterns.

It is always good to save more than your targeted amount as when you do move into your house there are always additional costs and expenses. Stamp Duty on the purchase of a house can be quite substantial as well as Conveyancing and Borrowing costs. You may also want to do additional landscaping or buy additional furniture. Your Broker can give you a full run-down of all costs involved in the purchase process.

If you do want that new lounge, TV or Fridge, it is always recommended you steer away from interest free deals or credit cards at this early stage.

Take extra care with your current Telephone and mobile accounts, and, if you are living with mates, electricity accounts. If you have a bad history in either one of these, it can stop you from getting a loan. Be responsible for your spending and bills especially mobile phone accounts as mismanagement of this could result in a default on your credit rating which makes it very tough to get finance.

You might have a good savings history however if you are overdrawn on another account this could also jeopardise your borrowing ability. It is important to keep your everyday transaction account as well as your savings account looking good.

Car loans. If your are thinking of buying a house don’t go out and spend a lot of money on a car. Lets say a car repayment is $500 per month, your car loan decreases your borrowing capacity. If you are thinking of buying a house and car, do the house first.

A few simple things to keep in mind when preparing to purchase your first property. All of these points can be clarified and explained further by your broker.

This is a question I am often asked by First Home Owners and it is one that I am more than happy to answer time and time again.

In making your first purchase in property, whether it be your first home or first investment property, it does not need to be daunting. With a little preparation the journey can be fun and you may even find that you want to stay on the ride.

Let's get started - First Home Buyer

Step One
Get an idea on how much you want to spend on your first home. In order to do this have a look at real estate websites like domain.com.au and realestate.com.au. This will give you a feel for what you might get for your dollar. For example, if you are after a 3 bedroom house with double garage in Charlestown, do your research on the above sites and see what this style of house is generally selling for.

Keep an open mind, you may have to go to an outer suburb if the prices are too high for what you want.

Step Two
Talk to your local broker for hints and tips on how to be in a position to borrow the money for that house.

Step Three
Save, save and save some more. Work on a savings plan. Have a clear, written budget which includes all your spending. Your broker can assist or you can find budget templates online.

Look at what your current surplus income is and set aside as much as you can for your deposit.

In saving for a deposit you are doing two things, one - you are saving the actual deposit that you require and two – as a regular savings pattern you are proving to the bank that you will be able to afford the loan. So it makes sense that the amount you save should be equal to the amount the payment would be. If you are renting you save the difference of the rent to the repayment.

This could be a 6 to 12month plan depending on your financials.

If Mum and dad want to give you some cash to help you with your first home, for the bank to consider this as your savings it would need to be in your account for ate least 3 months.

If you find that your surplus income is not enough to cover a loan repayment you may have to adjust your budget/living style or increase your income. Remember when you start your mortgage there will be a regular set repayment for fortnight or month. The bank want to be sure that you can make regular repayments which is why the savings plan is very important.

Please Note: The bank determines Genuine savings to be money is saved up over a 3 month period or funds held in your account for ate least 3 months. Please note it is possible to borrow 100% of the purchase price using equity in Mum and Dad's property however the bank still need to see that you have the ability to make the repayments.

Step Four

Once you get close to reaching your deposit amount it is time to approach your broker again to start the application process. Before you find a house you want, meet with your broker to make sure you fit the banks guidelines before you get your heart set on the property.

The best strategies are the ones that keep it simple. Following a few easy steps and being prepared can make your first property purchase an enjoyable one. Good luck with the house hunting!

Wade Hooper is a qualified Mortgage Broker and owner of Inspire Property and Finance.

There are a lot of options out there to help you find the best mortgage for your property. After discussing it with family and friends, doing your research online and keeping up to date with announcements from the RBA, when is it time to take the next step and organise your finance. Who should you talk to?
Answer: A Mortgage Broker.

1. A broker knows all of the lenders guidelines. They know what you need to do in advance to suit the guides and will provide you with every opportunity to get the loan approved.
 
2. A broker is more proactive with the guidelines as opposed to the Lender who is reactive. By the time you go to the Lender you will need to have all of the items in order, they wont give you the hints and tips on what to do.
 
3. As brokers they are not linked to any one institution, Brokers have access to most institutions. They don't have targets on any specific product or institution so they can concentrate on giving you the best loan every time, not the loan that will just suit their target.
 
4. Brokers get paid by the banks, it does not cost you anything to see a broker.
 
5. Your Broker has access to a panel of related industry professionals - accountants, solicitors, building inspectors etc. Professionals that your Broker regularly works with, providing a one stop shop for your property purchase.
 
Working with a mortgage broker can provide you with the peace of mind that you are receiving all the information required and expert knowledge to assist you in making one of your biggest financial decisions.