FREQUENTLY ASKED QUESTIONS
Some common questions
Do I need financial advice?
If you could achieve your financial goals by simply putting money away in the bank, you wouldn’t need a financial plan. Unfortunately, life is a little more complex – it’s hard to understand the intricacies of investment, taxation and ever-changing regulations, so you need professional help.
What is financial planning?
Financial planning is about understanding your financial goals and putting a strategy in place which will help you achieve these. Financial planners are trained experts who can help you build, manage and protect your wealth.
Topics a financial planner can advise you on include:
- tax effective (wealth creation) strategies
- debt elimination
- investments – inside and outside of superannuation, including direct property ownership considerations
- life and income protection insurance
- maximising your super
Does Strategic Investor Group charge for the first meeting?
No, our initial ‘Introductory Meeting’ is both cost and obligation free.
The meeting provides you with the opportunity to ask us a range of questions and gain a deeper understanding of our services, our core values, our approach to delivering financial planning advice, and our fee structure. It also allows us to learn about you, your current situation, your goals and aspirations and identify areas of concern or opportunity.
Put simply, it’s about determining if we are the right fit for one another.
How long does it take from when we first meet to when I am presented with advice?
Provided all required information is made available by you and relevant third parties (superannuation funds, insurers etc.), our ambition is to deliver advice within 2 weeks of the initial meeting.
What does your affiliation with Hillross mean in terms of advice provided?
Hillross is 100% owned by AMP and provides our licensing, compliance and the framework under which we need to operate.
What is the difference between a variable and fixed rate?
Home loan products are generally divided into either variable or fixed interest rate options. A variable interest rate loan is a loan in which the interest rate charged on the outstanding balance varies as market interest rates change.
A fixed interest rate loan is a loan where the interest rate doesn’t fluctuate during the fixed rate period of the loan. This allows the borrower to accurately predict their future payments.
What is a split rate?
A split rate mortgage combines elements of the fixed rate and variable rate options. e.g. You can have 80% of your home loan at a fixed rate , while the remaining 20% is at an interest rate that varies with the market.
This is good for borrowers who want the options and features provided by a variable rate loan, but also want some certainty around their repayments.
What is a comparison rate?
Home loans often carry administrative fees. The advertised interest rate on a home loan is the base rate of interest you pay each month, but does not always give a good indication of the true cost of a home loan.
A comparison rate, however, takes into account the loan’s base interest rate and any other fees and charges and expresses this cost as a percentage. To work out a home loan’s true value, always make sure to look at the comparison rate.
Some borrowers also choose to use mortgage brokers. Mortgage brokers receive a commission from lenders for introducing borrowers. Brokers can help guide you through the home loan process if you need extra help.
What is lenders mortgage insurance (LMI)?
Lenders mortgage insurance, or LMI, is an insurance policy that covers your lender against loan defaults. This means if you cannot pay your home loan, your lender is compensated (by an insurer) to protect them from financial loss.
LMI is generally only required when a deposit of less than 20% is available and the Loan Value Ration (LVR) is above 80%.
What is stamp duty?
Stamp duty is a tax levied by all Australian territories and states on property purchases. The stamp duty a buyer pays is based on the property purchase price, location and loan purpose. Some states charge different rates on investment properties than on places of residence.
With regards to purchasing a home you are legally required to pay stamp duty within 30 days of settlement on the property.
Use this STAMP DUTY CALCULATOR to calculate your Stamp Duty.
What is an offset account?
An offset account is a transaction account linked to a home loans. Offset accounts reduce the amount of interest payable on your home loan. They do this by offsetting the interest calculated on your loan by the amount in the account.
For instance, if you have a loan balance of $500,000, but have $50,000 in an offset account, you’ll only be charged interest on $450,000.
What is a redraw facility?
A redraw facility allows you to borrow money you’ve already repaid and is usually offered with variable interest rate loans. A redraw facility allows you to be flexible with how you repay the loan. If you have spare money in your savings, you can pay this onto the loan.
Redraw facilities can useful tools to help in case of emergency or to fund things like renovations or improvements. It is important to note that loans with redraw facilities often carry additional fees.
What is the difference between an investor loan and an owner-occupier loan?
As the names imply, the difference between owner-occupied residences and investment properties comes down to what you intend to do with them. When you’re buying a home or apartment you intend to live in, it’s called an owner-occupied property. If you are buying an investment property and plan to rent or lease it, it’s considered an investment.
The primary differences between an investor loan and an owner-occupier loan is the loan’s purpose, and perhaps its cost.
What is negative gearing?
Gearing is when you borrow money to make an investment.
Negative gearing is a tax minimisation strategy used by property investors. This tax concession allows investors to offset any losses they make on an investment property against their personal income. For example, if the interest, maintenance and ongoing costs of an investment property are more than the income generated by the property, the investor can claim a deduction from their personal income at tax time.
What is capital gains tax?
Capital gains tax, or CGT, is tax paid on profit made from selling an asset. This profit is calculated by deducting the expenses associated with the asset from the final sale price of the asset. Capital gains tax is levied on the sale of property, but property owners can be eligible for a full or partial exemption from CGT depending on their circumstances.
What is a buyers agent?
A buyers agent (also known as a buyers advocate) is a licensed real estate professional who works exclusively for the buyer. Services of a buyers agent include searching, evaluating and negotiating the purchase of property on behalf of the buyer.
How is a buyers agent different from a selling (or sales) agent?
A selling agent is engaged by the vendor to sell a property at the highest possible price and most favourable terms for the vendor. A buyers agent does not sell real estate and is engaged by the buyer to purchase a property at the lowest possible price and most favourable terms for the buyer.
What are the benefits of using a buyers agent?
Save Time – it can take up to 100 hours to properly research and find the right property to buy. Why not free up your weekends and outsource this to someone working in your interest?
Save Money – have you ever wasted money on a building and pest inspection report, or feel you paid too much for a property, or been caught in a rising market? A buyers agent uses their market knowledge and negotiation experience to save you money which often more than pays for their fees.
Save Stress – for every successful purchaser, there are dozens of frustrated and stressed under-bidders. Why not save yourself this stress and frustration and leave it in the hands of someone who does it for a living?
Access to more properties – a buyers agent often gets earlier access to a wider range of properties (including silent and pre-market listings) which can allow a property to be secured before it’s even seen by the general public.
Are selling agents happy to deal with buyers agents?
Yes, absolutely. Selling agents like dealing with buyers agents because they represent qualified buyers who are serious about purchasing a property and are usually prepared to decide and act quickly. Buyers agents understand the process, know what’s happening in the market, and are more experienced in evaluating a property and assessing its fair value. This generally makes them easier to deal with for selling agents, not to mention a repeat source of business.
Is there a conflict of interest?
There is no conflict of interest as we work exclusively for the buyer as their agent in representing their best interests in negotiating and securing a property. We do not sell property or represent any vendors, nor do we receive any financial benefit relating to the purchase of a property (other than the fee paid by our client).
What areas do you cover?
Whilst we specialise in the Sydney market and we also have a strong referral network in most capital cities in Australia.
What types of properties do you purchase?
We cover residential property for owner occupiers and investors as well as commercial property.
How long does the process take?
Once our clients have their finances in order and we start our search, it will typically take between 1-3 months to secure a property. However, factors such as market conditions and a client’s requirements can influence this timeframe and make the process take a bit longer.
Is it expensive?
No. Our fee represents a very small percentage of the purchase price. We typically save our clients more than our fee through our negotiation strategy in securing the property at a much lower price than our client could have achieved. When our fee is weighed up against the cost of missing out on properties in a rising market, the costs of paying for building/pest reports, the value of your time looking each weekend, and the risk of overpaying or not correctly evaluating a property, many people see the value and benefit in having a professional do this for them.
Can you help me if I live or work interstate or overseas?
Whether you are local, interstate or overseas we are able to help you purchase a property. With the right authorities in place, we can undertake all aspects of the property search and acquisition on your behalf. Whilst you will be unable to physically inspect a property, we will inspect, assess and provide our recommendations to you along with any photos, floorplans and virtual tours. We ensure that you have the information you need to make an informed decision.
What happens if I find a property myself after engaging you for a full search?
Once you have engaged our services, we undertake an extensive search on your behalf including local market analysis, physical inspections and contacting many agents to uncover opportunities which have not yet hit the market. As such, full fees are payable even if you find a property on your own. If you do happen to identify a property that we haven’t seen, then by letting us know we can use our skills and experience to do a full assessment on the property to determine its market value and raise any potential issues.
Are you fully licensed and insured?
Strategic Property Buyers Pty Ltd holds a corporation licence and our buyers agents all hold full real estate licences. Our professional indemnity insurance covers up to $6 million in aggregate.
How do I get started?
Call 02 8014 7770 or email us at enquiries@stratgroup.com.au to arrange for a free no obligation property consultation where we will discuss your requirements, explain how we can help, and answer any questions you may have. We look forward to hearing from you.