Investment; Houses vs. Units/Apartments

So, you’re an aspiring property investor. Where to start? is it best, for the sake of investment, to purchase a house, or a unit/apartment? In this article, the pros and cons of each will be examined in as objective a manner as possible, and the question will be left to the intelligent reader to answer, on the basis of the knowledge which has here been presented.

All About Appartments

  • Ease of Entry – The fact of Appartments being the cheaper option means that for the novice investor, it is easier to enter the market through the purchase of such a property. This allows one to gain a foothold in a particular area, or, at least, secure a modest investment through the ownership of property. Although an apartment will almost never appreciate to the degree at which a house will, the fact remains that there is great benefit in having a foothold in the market by most any means.
  • Potential for Appreciation – As previously mentioned, an apartment is highly unlikely to appreciate to the degree at which a house will. That said, the level of appreciation is nothing to dismiss, with an apartment of good quality potentially possessing the ability to increase by a quarter in value through the course of but five years. This is amplified by conditions such as sought after, inner-city locales, the purchase of which is generally only made possible to the average buyer by virtue of the property size being smaller. Another facet which could increase the appreciation and value of an apartment is if it is period; should an apartment be Victorian, or Art Deco, for example, the demand for and value of the property will increase exponentially with the years, and, in fact, increase by virtue of the years themselves.
  • Access to Locale – As touched upon in the last point, an apartment can be a desirable property with potential for appreciation by virtue of the fact that many thereof are located in highly desirable and trendy areas. Apartments are usually to be found in the inner-city or inner suburbia, and are, therefore, closer to most forms of entertainment, night life, work and offices, facilities and resources. For most people, a home in this tantalising locales is only made possible by the fact that they come in the form of smaller, more affordable appartments, which will increase in value as the population of any given city rises.

How About Houses?

  • High Appreciation – The fact of the matter is; houses will always appreciate more than apartments. This is because the value of a house comes not only from the structure itself, but also from the land upon which the structure is built. Think of it this way; new apartments are built every day, but no one can create more of the green Earth upon which they’re built. Therefore, it is the land itself which is the more scarce resource, and not the buildings. Naturally then, it will be the houses, which can double their value in a decade, that are more prone to appreciation in price.
  • Renovation Friendly – As mentioned, when one purchases a house, one has purchased the land. This means that one has freedom to extend or shorten the buildings length, build a pool or playing field, or add a second story to their home so long as they have the money, stay on their property and are in line with their local council. With an apartment, such is not the case. One does not have the freedom to take down walls and make great structural changes, even to the property which they, themselves own, due to the fact that the body corporate which dictates the “nays” and “yays” within the complex are likely to veto anything potentially disruptive to other residents. Therefore, in the instance one renovating, and being able to turn a house you like into a home you love; houses win the day.
  • Difficulty of entry – For all the benefits which houses have over apartments, one fact still lingers; the price. A house will almost always cost more than an apartment, and as such, the purchase thereof can be daunting to aspiring investors and home-owners alike. Even so, the seemingly impossible becomes ever more achievable when one shifts their focus for the bright lights of the inner city, and into the sleepy haze of outer suburbia. In some cases, and in many cities, a three bedroom house in the outer suburbs can cost as much as a one-room apartment in the inner-city. Think of what could be saved! And when one considers the potential for appreciation? The mind runs wild with the possibilities.

Conclusion

Therefore, it can be rightly said that to different people, in different circumstances, units, apartments, and houses all have different benefits and drawbacks. No matter what your situation or preference is, however, its unlikely that you’ll be able to bear the cost without a home loan. If you’re looking to buy a home, be it an apartment or a house, Natloans is only a phone call away. Out dedicated home finance team has, over many years, helped hundreds of Aussies into their dream homes, of all shapes, sizes, and categories. Call us today! Its all that stands between you, and your new home.

So, you’re an aspiring property investor. Where to start? is it best, for the sake of investment, to purchase a house, or a unit/apartment? In this article, the pros and cons of each will be examined in as objective a […]

Investment; Private Vs. Commercial Property

The First Distinction

Right off the bat, let’s discuss the functional difference in the two property investment types. Commercial properties are properties in which commerce is supposed to go underway, hence, they are meant for the use of a business, primarily.

Residential properties are properties in which one intends to live or have someone live. Hence, they are a place of residence.

Practical Distinctions

Here are some of the more tangible differences between the two sorts of property investment, in no particular order:

  • Lease Terms & Length – Commercial properties will often have a much longer lease than residential properties, due mainly to the fact that it is much harder to find a tenant for a commercial property than a residential one. One will also note that, distinct from residential properties, commercial properties have lease terms which tend to vary quite widely, and are subject to quite a wide scope of negotiation.
  • Maintenance – With residential properties, the price of electricity, plumbing, land tax and rates are usually billed to the landlord rather than the tenant, with commercial properties, the opposite is often the case. Therefore, in a commercial property, the tenant will usually bear the burden of maintenance. At the same time, this provides the commercial tenant with an incentive to take closer care of the property, not just because they will have to pay the upkeep thereof, but also because it is their place of business and often the success thereof is contingent upon its good appearance.
  • Rent increase – Whilst most residential leases do not tend to include a fixed annual rent increase, commercial properties often do. This is typically within the range of 3-4% annually.
  • Risk – Residential properties are usually considered to be the safer investments of these two. No matter what is ongoing with the economy; people will always need a place to live, whilst commercial properties, on the other, can be subject to some quite significant shocks and tremors when faced with economic shocks.
  • Interest – Interest rates paid on properties tend to be significantly higher in the commercial realm. This is partly because an institution is presumed to have more money for payment than an individual or unit thereof.

Finishing Thoughts

This was a basic summation of the key differences in the two property types. Some information may be specific to the property in question, and there are other minute details which have not been discussed here. It is best, therefore, to see this as a starting point, and to make sure to do your own research to the best of your abilities if either of these matters of subject piques your interest. For more information, check out our homes loans section. See you soon!

The First Distinction Right off the bat, let’s discuss the functional difference in the two property investment types. Commercial properties are properties in which commerce is supposed to go underway, hence, they are meant for the use of a business, […]

How To Win At Auction

How to win at auction. It’s a stumping question. Many an aspiring property owner has found themselves withdrawing from their first auction feeling timid, shattered, and disappointed as the process at which they thought they were sure to excel ended in the home of their dreams being taken by another. So how can you turn this around? How can you make it so it’s YOU that walks away with the keys? In this article, we’ve compiled several tips from Natloans’ very own Mary Nebotakis, which we will be sharing with you, so as to boost your odds at winning in auction.

Confidence is Key

In many ways, an auction is similar to a game of poker; one can increase one’s chance of winning by bluffing their opponents into shying away from the table. Think about it; if you were at an auction, and bore witness to one of your fellow prospectors raising their bid higher and higher, time and again, seamlessly and without so much as a quiver in their voice, what would your first thought be? Naturally, you’d suspect that this person wants the property badly, and that they’ve got the money to get it at any cost. The effect? A feeling of intimidation and impulse to fold on the behalf of their fellow bidders.

Therefore, the inherent value of this stratagem, to the ends of achieving a win at auction, is self-evident; when one seems confident, and gives off the impression that they are going to win, their fellow bidders are more likely to fold and actually allow them to do so.

It is recommended that if one wishes to build their skill, confidence and experience as it respects auctions and sales, then once should attend a number of them before one in which one has genuine interest, so as to expose oneself to the environment and study the behaviours of successful bidders first hand.

Starting Low

This one may seem obvious, but “a wise saying bears repetition”. If a house (a doll house presumably) is priced at $100, it would naturally be foolish to begin your bid at $110, increasing the price of the property by a full ten percent. At the same time, by virtue of the nature of an auction, beginning even at $100 is likely to set the stage for the price to elevate, due to escalating bids, to a higher price anyway, likely somewhere around $110. Therefore, the wise thing to do would be to begin one’s bid low right off the bat, at perhaps $90, so as to make it so that even through natural elevation during the auction, the price of the property will be unlikely to become such as that it is out of one’s initial price range.

Stick Within Your Price Range

In the moment of heat, it can be tempting to push just a little bit further, and to, increment by increment, push far beyond the price at which you were happy to buy the property to begin with. Be wary of this. The fact of the matter is, if you win at auction by going $300,000 over budget, you’ve really lost. No matter what the temptation may be, no matter how you may feel in the moment of adrenaline and emotionality, ensure that you stick to the figure which you conjured in a premeditated, calm, and rational state of mind.

Good luck!

How to win at auction. It’s a stumping question. Many an aspiring property owner has found themselves withdrawing from their first auction feeling timid, shattered, and disappointed as the process at which they thought they were sure to excel ended […]

Buying Off The Plan

Buying Off The Plan

What Is This?

In brief terms, ‘buying off the plan’ refers to the practice of signing a contract with a developer, which purchases a property that has not yet been built, but rather, is being planned for building, usually an apartment or complex thereof. Therefore respecting this purchase, there is no property to inspect, and the buyer is limited to blueprints and artistic renderings to make their decision upon.

Very often, there is a temptation in us all to label a decision as either ‘bad’, or ‘good’. In this article, the author will attempt to lay out the facts and conditions surrounding buying off the plan in as neutral terms as possible, so as to give the reader the most objective introduction, or frame of reference possible in forming their own opinions thereof.

What Are The Benefits of Buying Off The Plan?

There are several benefits, notably and namely;

  • Stamp Duty, Price

Perhaps most notable to some is the fact of a reduced price often being associated with buying off the plan. This comes from the fact that when one does buy off the plan, they do not need to pay stamp duty on the final product which has been built, that being $18,700 in the state of Victoria alone, a buyer will certainly save a very significant amount of money on account of having chosen to purchase through this channel. That being said, this alleviation applies only to the building itself, with a stamp duty still being due with respects to the land upon which it was built. Nonetheless, such a sum is no thing to sneeze at.

  • Low Deposit, Longer Window For Preparation

Usually a deposit for this sort of purchase will be around the 10% mark. That said, it can range as low 5% and as highly 20%. That being said, securely the contract is relatively easy, and the fact of the wait for the structure to be built means that one is afforded with plenty of time to save up for the purchase before the time comes to begin paying back.

  • Potential For Contributing To Design!

If you fund the building of the complex or structure, you may be able to contribute, to varying degrees, to the interior design and aesthetic of the building itself. To this end, however, one will have to verify with their developers to know for sure what is possible.

  • Maintenance, Condition

The fact of a building being erected more recently means that the technology which powers and maintains it is more modern, more green and more advanced. This equates to tax benefits, should something like a carbon tax ever be reinstated, but also means that the technology will be more efficient and therefore cost-effective by default on account of its advancement.

Moreover, a building being brand new means that wear-and-tear will be absent in totality, and damage from previous owners and tenants can be a concern totally unheard of! This means no, secret peeling paint and rickety floors for residents and tenants, and no dodgy plumbing or ventilation to be fixed for landlords and investors! Brilliant!

Are There Are Cons?

As with all things, with pros come cons.

  • Sunset Clause

This is a statement which puts a limit on the time in which the developers can finish the project for their investors. It is a plainly stated date, upon which, if the project is not yet completed, the developers will be forced to return the investors deposits.

Sounds good, right? Well, whilst the clause was initially introduced to protect buyers from excessive delays, it has been exploited in some cases by crooked developers. These developers will take the deposits, begin building the buildings, and then deliberately transgress the clause so as to terminate the contracts, and then sell the properties to other buyers for a higher price.

As stated previously, research and invest wisely. Do not turn a single stone in ensuring that your investment is solid, and that the people with whom you are working are trustworthy.

  • Disappointment Of Expectations

As mentioned previously, the fact of purchasing a property which is not in existence at the time of buying means that one cannot walk through and determined for themselves whether they like the place as a home or not. Thus, when reduced to only blue prints and virtual constructions, one may find themselves disappointed with the final product upon which they had waited, should it not match up to home of their fantasies.

  • Developer Bankruptcy

It is strongly recommended that a buyer researches the prestige and history of the developer with whom they are considering to work, so as to minimise the probability 0f one’s stepping into a contract which could serve to detriment their finances.

If a developer should go into bankruptcy in the middle of your project, you can expect to never see your deposit again, and thus, have lost what may be a rather sizeable investment. Research and invest wisely.

For More Information…

Be sure to get the best financial advice possible before embarking upon any big decision, such as buying off the plan. Here at Natloans, our team is happy to hear out any qualms you may harbour, and to provide you with a quick quote respecting the matter. If you’re interested, be sure to call us at 1300 791 955, or, check out our website for more information about home loan solutions!

Buying Off The Plan What Is This? In brief terms, ‘buying off the plan’ refers to the practice of signing a contract with a developer, which purchases a property that has not yet been built, but rather, is being planned [...]

Are You Eligible For A First Home Buyer’s Grant?

Are You Eligible For A First Home Buyer’s Grant?

          Buying your first home is one of the most exciting — and expensive — milestones of your entire life. Lucky for the aspiring property-buyer, since 2000 the federal government has introduced a scheme designed to help in the purchase of a home, and which serves to offset the costs accrued by the GST (goods and services tax); the First Home Buyers Grant. In this article we’ll be discussing what precisely the Grant is, and, if you, the reader are eligible to receive it.

 

What is the Grant?

           Basically, the Grant is a sum of money granted to you by you state government meant to help you out by going towards the purchase of your first home. The grant is not means tested, which means that your eligibility is not affected by conditions such as your income, and other financial considerations. The payment is one-off, and only for the purpose of purchasing a home in which you will live. The amount of money granted to you differs depending upon your state of residence. Below is a short table with all the information you’ll need respecting this matter:

State Sum
Victoria                                                     $10,000 – $20,0001
Tasmania                                                     $10,000 – $20,0002
New South Wales $10,000
South Australia $15,000
Queensland $20,000
Western Australia $10,000
Northern Territory                                                     $10,0003 – $26,000
Australian Capital Territory  $7,000

 

  1. If the property is a new home in a regional area
  2. If the contract is between January 2016 and 30 June 2019
  3. $10,000 granted for merely a renovation grant, $26,000 for a new home

          This money could obviously serve well as a deposit on a new house (potentially covering it in it’s entirety), leverage for attaining a home loan, or even just a fine contribution to the building of the house itself.

 

Eligibility

          Whilst, of course, specific rules and clauses vary by state, and it is up to you to check with your local government as to whether you meet each of their requirements, a good rule of thumb to begin with is whether you meet all of the following:

  • Have never been given the grant or owned a property beforehand
  • Are of age as prescribed by your state (usually 18)
  • Are a citizen or permanent resident of Australia
  • Plan to live in your property for the minimum time required, which differs state-by-state. This also means that the grant is not available for investment properties.
  • You must buy as a private citizen, that is, not as part of a business or other entity
  • You must apply for the grant within 12 months of settlement on the home.
Are You Eligible For A First Home Buyer’s Grant?           Buying your first home is one of the most exciting — and expensive — milestones of your entire life. Lucky for the aspiring property-buyer, since 2000 the federal government has introduced [...]

Looking to do home renovations

Looking To Do Home Renovations?

          How many times has it been that you’ve banged your head on that ridiculous low-hanging cupboard in the kitchen? And how much has your partner hinted about needing a new bedroom for the kids? And how long has it been since you’ve wanted to get that shabby, 70’s wallpapering in the living room done over? 

          The likely answer; too many, too much, and too long. What you’re in need of is a home a renovation — and you know it! But the whole process can seem daunting and expensive, and perhaps you don’t know exactly where’s best to start. In this article, Natloans will take you through a few steps, tips and considerations that will help you out in your efforts in turning your house into your dream home!

 

Things to Consider

          The first thing to consider when renovating a home is the precise reason why it is that you want to do so. Specifically, do you want to improve your property because you want:

  • To improve your own living space

or,

  • To make your house’s value higher for sale

          For different purposes, there are different types of improvements that you may want to embark upon. For example, if you want to increase the house’s market value, then it’s likely that the types of renovations you’d be doing are modernising (i.e new-style carpets, wallpapers) and repairs (i.e no more leaky pipes), which are improvements that bolster the bargaining power of the seller of the property in an auction.

          If you were interested in improving your living space, however, then it’s likely that you’d be looking at spending a little more on renovations, on things like an extra bedroom, a second story, or a new security system. Whilst these features aren’t necessarily mutually exclusive, knowing them, and how they relate to the broad category of renovation that you wish to make can be very helpful in making the early plans for your home renovation, as it concerns the costs associated with it.

          Once you’ve decided the reason why you want to renovate, you can shift your focus onto what the specific renovations you want are! Once you’ve decided what, precisely, it is that you want for your home, browse the websites of some online retailers and experts to get a feel for the specific pricing associated, and, once that’s done, take your plan to a builder to have it evaluated for additional costs and construction time.

 

How can Natloans Help?

          The costs associated can be daunting, and with the income you make you may not be able to pay for the entire job up front. Luckily, Natloans has you covered. Our expert team is ready and waiting to find you a quick, affordable loan solution which meets every requirement as outlined in the previous section. We can help your efforts by providing you with a Personal Loan Solution with which you can be granted as much funding as you need for your specific project for the purpose of making renovations to your home. 

          As well as the previously mentioned abundant funds, Natloans can promise to give you access to fixed interest rates on your repayments, as well as fair loan terms that’ll ensure you’ll be able to pay out your loan comfortably.

 

Looking To Do Home Renovations?           How many times has it been that you’ve banged your head on that ridiculous low-hanging cupboard in the kitchen? And how much has your partner hinted about needing a new bedroom for the kids? And [...]