I am thinking of a number between 1 & 3

I am thinking of a number between 1 & 3.

Can you guess the number?

Give up?

There are only 2 numbers that matter right now.

Only 2 numbers the RBA cares about.

  1. The inflation rate.
  2. The unemployment rate.

So what are both these numbers doing right now?

In the December quarter, the headline inflation rate reached 7.8%. This is the highest rate in more than three decades.

On Wednesday we got the March quarter number which was a slight drop to 7%.

So even though it’s jumping around a bit, it’s still uncomfortably high.

The RBA started raising rates last year in May because they wanted to increase unemployment, hoping that would stop people from spending. They raised rates 10 times in a row, an unprecedented move.

So how did unemployment react?

Australia’s jobless rate held steady last month with employers adding more than 72,000 full time positions. The country’s unemployment rate for March was 3.5%, which is near the lowest since the mid-1970s.

Last month the RBA finally paused, opting to keep rates steady taking a ‘wait & see’ approach. Immediately the media & property spruikers were quick to herald the top of the interest rate cycle declaring the end of rate rises and some even predicting rate drops later this year.

So whilst the media & various commentators are saying one thing, the data/numbers are saying something very different.

So what do we do?

We sit & we wait.

And that is exactly what I am betting the RBA will likely do next week.

Kiril Ruvinsky

Tips for buying sight unseen

There’s no doubt about it. Buying sight unseen – that is, purchasing a property without viewing it in person – can be risky.

What if it has a strange smell when you finally do enter the property?

What if it’s a little darker than how it appeared in the advertisement photos?

What if the neighbour has a junkyard encroaching on your doorstep or there’s a huge electrical tower outside?

These are all valid concerns, but despite this, some property hunters are still diving in with a sight-unseen regional or interstate purchase. Why?

One common reason is that low levels of new listings is creating fierce competition between buyers in some markets, and savvy investors know that when an opportunity arises, sometimes you just need to jump.

So, how do you mitigate risk when buying sight unseen? Here are some tips.

Know your ‘why’ and do your research

Investors usually buy for either capital growth potential or for cash flow. What is your driver? This will ultimately affect the type of property you buy.

If capital growth is the end goal, consider:

  • Population changes – Is the area expected to grow? Are more jobs likely to become available and attract more people to the area?
  • Supply and demand – Is there a strong demand for housing in the area? A lack of supply and strong demand could be a recipe for price growth.
  • Lifestyle appeal – Is it a place where people want to live? Is it a ‘leafy’ suburb, for example, or near the beach? Is the area being gentrified with new properties and amenities?
  • Statistical indicators – Consider the historical capital growth. What are the vacancy rates like? Are vendors discounting?
  • Infrastructure and amenities – Are there any planned infrastructure improvements or zoning changes that could affect capital growth? Is there good access to amenities like transport links and schools?

If you are buying purely for cash flow, you’ll want to find a property with a high yield. With this strategy, the rental income will likely cover the costs associated with owning the property.

Our Sydney Buyers Agents have transacted over 2000 properties since we first set up our business in 2005 – this is what they do best, day in and day out. Check out Buyers Agents Services

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Do an inspection  

If there’s one thing that the pandemic taught us, it’s that you can do more than you think remotely.

With so many online resources available, it’s possible to find your next real estate investment, do extensive research online, get a feel for the neighbourhood on Google maps, and even do an inspection – all from your computer, iPad or smartphone.

These days most real estate agents will happily do a virtual walkthrough with you via a video call. However, if you can get someone to physically inspect the property on your behalf, that’s always preferrable.

It could be a family member or friend whose judgement you trust. Otherwise, you may consider hiring a buyer’s agent. They can do inspections, offer advice and bid on your behalf at auction.

As with any property purchase, don’t forget to get building and pest inspections.

Get a valuation

An official valuation is a great way to get a true indication of a property’s value and to make sure you’re not overpaying.

If you’re purchasing sight unseen, it’s worth considering paying the money for a valuation for peace of mind.

Speak to a property manager

Once you buy an investment property, you’ll likely get a property manager to take care of it for you. Why not consider enlisting their help sooner rather than later?

If you’re buying sight unseen, they can provide market insights and help answer any questions you may have.

Ready to get started?

Keeping an open mind to opportunities that aren’t necessarily in your own backyard can pay off, as long as you do your research and due diligence.

If you’re considering buying an interstate or regional property sight unseen, it’s important to have your finance in order.

Speak to us about organising pre-approval, so that you’re ready to go when the right property comes along. Get in touch today. 

You are welcome to have a look at our website to get an understanding of our full service offering – https://stratgroup.com.au/services/ 

How to manage your own investment property

You’ve just purchased an investment property (go you!), so what comes next?

It’s time to find some quality tenants and sign them up for a lease. When it comes to this step, you can go one of two ways.

You can pay a property manager to take care of the nitty-gritty for you. There are all sorts of perks to doing this, but of course, there’s a cost involved.

Otherwise, you can choose to manage the property yourself. Here’s what you need to do if you decide to take this route.

Familiarise yourself with the law

How and when do repairs need to be completed? Who pays the utility charges? What kind of notice is required before an inspection?

The answers to these kinds of questions and more can be found in your state or territory’s Residential Tenancies Act. The rights of both tenants and landlords are protected by these laws and you’ll need to be across them if you plan to manage your own investment property.

Prepare the paperwork

Next, it’s time to get your documentation in order. You’ll need:

  • A lease: usually a fixed term for 6 or 12 months.
  • The bond: an upfront payment by the tenant (usually one month’s rent) paid in advance as security for rent owed or damage, and held by the governing authority in your state or territory.
  • The condition report: takes note of the condition of the property before the tenant moves in and can serve as evidence if the tenant damages the property. Your tenant may also submit a condition report once they get the keys. Be sure to take photos.

Set the rent and list the property

To get an idea of how much to charge for rent, you could:

When you advertise the property, make sure you pair quality photos with a great listing to attract the kinds of tenants you want.

Remember to include any stipulations about pets and/or smoking.

Find quality tenants

Finding quality tenants all comes down to how thoroughly you screen candidates.

You’ll need to verify their ID and income (such as their most recent payslips and/or a bank statement highlighting their income), call their references and investigate their previous rental history.

Online tenant (renter) databases allow you to check whether candidates have been ‘blacklisted’ by previous landlords. Examples include:

Be aware that there are laws governing things like disclosure and how these databases can be used. Make sure you get up to speed with the rules in your state or territory.

Get the ball rolling

Once you find the right tenant, file all the necessary paperwork, lodge the bond and start collecting the rent. Keep in mind that each state or territory may have different requirements, so do your research.

Look into landlord software apps, which can help make your life easier with things like rent tracking and expense management.

Respond to repair requests

If you take care of your tenants, they will be more likely to take care of your property.

Make sure you respond to any requests for repairs and maintenance in a timely manner. Remember to check the rules and timelines around completing repairs in your state or territory’s Residential Tenancies Act.

Don’t forget inspections

You’ll want to organise regular inspections to ensure your property is being looked after. Rules may differ depending on location, so again, make sure you do your research.

It also pays to be meticulous about your record-keeping and documentation. Keep a record of all interactions with the tenant, as these can help protect you should issues arise.

Ready to become a landlord?

As you can see, there’s a bit involved with managing your own investment property. However, if you want to have complete control over your property and save yourself the commission you’d pay a property manager, it may be the way to go.

We are here to help with any questions you have, so get in touch today. 

 

You are welcome to have a look at our website to get an understanding of our full service offering – https://stratgroup.com.au/services/ 

Why use a mortgage broker to refinance?

Do you remember dial-up internet access?

How about audio cassettes?

Don’t worry if you don’t; they are, of course, a thing of the past.

A 30-year mortgage with one lender is a bit the same – a thing of the past and something that is largely obsolete nowadays. Especially given the current climate.

With the cost of living going through the roof and home loan interest rates shooting up from a record low of 0.1 since last May, more and more people are refinancing their mortgages – 2,370 every working day in Australia, to be precise.

Homeowners have experienced the fastest tightening cycle in a generation, and many are ditching their current lender for a more competitive mortgage elsewhere.

Analysis from the Australian Banking Association (ABA) found 70 per cent of bank customers who refinanced their mortgage in the past six months did so with another lender.

If, like them, you feel it’s time to shop around, here’s why you should use a mortgage broker to refinance.

Expertise you can trust

At the moment there is intense competition in the home loan industry. Banks are hungry for your business and are offering all sorts of sweeteners to get you on board.

Cashback offers. Rate discounts. Package deals. The whole shebang.

So, how do you know which home loan is most suited for you?

That’s where you need a professional on your team. A mortgage broker is a trained finance specialist. We know the system and which products best suit our clients’ needs.

We are also across all the latest industry developments, so you gain access to a wealth of knowledge by working with us.

Tailored finance solutions

There are no one-size-fits-all mortgages. Everyone’s financial situation and goals are different, which is why you need tailored financial solutions.

We’ll find a loan that’s appropriate for your specific needs. If we think you could benefit from loan features like an offset account or redraw facility, we’ll explain why. But we must work in your best interests and won’t push any extras on you that you don’t actually need.

Options, options and more options

If you go directly to your current lender asking for a more competitive rate, you only get what they are able to offer i.e. their loan products and the rates they are prepared  to put on the table.

We, on the other hand, have access to the full smorgasbord – a panel of lenders with different types of products, features and benefits.

What about commissions? The commissions we receive are pretty similar across lenders. This ensures there’s no incentive for a broker to recommend one over another. Our role and obligation is to act in our client’s best interests.

Make your life easier

Trying to understand all the different home loan products out there can be stressful and overwhelming. With a mortgage broker, we can take the burden out of refinancing.

We can also liaise with your chosen lender and facilitate the whole process.

Prepare for the fixed-rate cliff

One-fifth of Australian home loans will revert from fixed to variable in 2023. Do you fall into this category?

If you do, it’s worth speaking to a mortgage broker about your refinancing options. Your current lender’s variable rate may not be the most competitive or appropriate for your circumstances, so it’s important to get a second opinion.

When your fixed rate expires, you have 3 options:

  1. Refix
  2. Reprice
  3. Refinance

Common reasons to refinance

  • Secure a more competitive interest rate
  • Make the most of possible interest-saving features like offset accounts or redraw facilities
  • Access equity for renovations, additional properties or other financial goals
  • Consolidate debt.

Like to chat?

We understand the market. We understand mortgages. And we’ll take the time to understand your financial situation and goals.

Speak to us about how your home loan compares to others and we will explain if switching lenders could be financially worthwhile. Get in touch today.

You are welcome to have a look at our website to get an understanding of our full-service offering – https://stratgroup.com.au/services/