Property Finance

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For more than 30 years we’ve been in business and assisted hundreds of people with property finance to acquire their dream home, develop property portfolios and purchase commercial properties to allow them to grow their businesses.

Every client has different property finance needs and circumstances and we consider it vitally important that we take the time to understand what yours are.  Once we’ve achieved this, we then set about finding the most suitable product and lender to meet your requirements and then structure the facility to meet your needs.

Once upon a time, if you needed finance to purchase your first home, your only option was to march down to the bank that you deposited your hard earned wages into, dressed in your Sunday finest, and beg the Manager to provide you with the funding.  If he liked what he saw, and your figures stacked up, then you got the loan, on the terms that he wanted.  Thankfully, those days have changed!

The home loan market is now a totally different beast with an ever-increasing number of lenders offering a huge number of loan products packed with different features and capabilities.  Many loans are designed for specific types of borrowers and ascertaining whether a loan is suitable for your individual needs can be daunting to even the experienced property purchaser.

Our experience and processes will ensure that we understand your needs.  We will then set about to not only finding you the best home loan product to meet these needs but also teaching you how to use that product to your benefit and in the process create wealth.

Below you will find the many ways that we can assist with your property finance needs.

Owner Occupier

As a First Home Owner the process of purchasing your first property can be very confusing and stressful. Suddenly you’re exposed to a whole new world of foreign terms and very important deadlines. Add to this the complexity of the current Government Grants and the stress just keeps building.

We understand what lies ahead for you and it’s why we take the extra time to help you through the process. To us, it’s not only about obtaining the most suitable mortgage, but it’s also about leading you through the process with the minimum amount of stress.

Refinance

Refinancing your home loan is another term for mortgage swapping. With refinancing you could stay with you current lender but change to loan products or you can move to a different lender, who will take over your existig mortgage.

There are advantages to refinancing your home loan:

  • Saving money
  • Borrowing more
  • Restructuring
  • Consolidating debts

Property Investment

We all know that property investment can be an excellent form of wealth creation. Unfortunately, for the majority of people, their residential property will be the only property that they will ever own, despite the fact that they could quite easily have one or more investment properties creating wealth for them.

Our experience over the years has shown us that the majority of people under achieve when it comes to building a property portfolio that’s capable of providing them with a residual income which allows them to maintain the same lifestyle in retirement that they enjoyed through their working years. This usually occurs because of one of the following reasons:

  • They don’t think that they will qualify
  • They don’t think that they will be able to afford the loan
  • They don’t believe that they have enough savings to purchase another property
  • They didn’t have the right mindset

How We Help You Grow Your Portfolio

We all know that no two people are alike and that everyone has different goals and different financial capabilities.  We also know that virtually everyone that we meet and work with would like to make their money work harder for them.  The aim is to retire either owning their residential property outright or at least with enough capital so that their current lifestyle is not compromised significantly.

When we meet with you, the first thing we do is take the time to understand your current financial situation and to understand what your future financial needs will be during both your working years and then into your retirement years.

Once we understand where you’re currently at, what your current financial scenario is and what your goals will be, we then set about working with you to design an individual plan that will show you a path to achieving your goals.

Property Development

Regardless if you are an property investor looking at expanding your portfolio or a looking at taking that first step into the Property Development Market we can provide you with some insight into the diverse, complex and sometimes tricky business of Property Development.

When you are entering the world of Property Development it is important to note that you will need to create a team of experts that can assist you through the process. Depending on the complexity of your development, these may include some of the following:

  • Real Estate Agents
  • Finance Broker
  • Accountant
  • Lawyer
  • Town Planners
  • Architects
  • Engineers
  • Building Contractors
  • Development Managers
  • Quantity Surveyors
  • Property Strategist

As a general rule with Property Development, if you are looking to develop a large project (more than four units) you will need to secure a commercial property development loan. A commercial property development loan will provide the funds to construct multiple properties on one title. If you are looking at developing four or less units, such as duplexes, triplexes or townhouses you can secure funding through a residential property development loan.

Below we have provided you with the nine steps guide you through the expectations of Property Development.

This stage in the process will require the developer to start investigating properties that fit within their finance pre-approval.

During this stage it is important to note that a feasibility study will need to be conducted and as such would be a great time to consult some of the experts you have bought onto your team.

In order for an accurate feasibility assessment to take place please consider the following requirements:

  • A solicitor to check the contract of sale
  • Town planning to determine the site’s development potential
  • An architect to design the development concept
  • Your builder or project manager to advise of the build cost

Always be sure to consult with the planning department of the local council, this will ensure that any future planning or zoning projects are advised as this may limit the developments future.

By now you should be ready to enlist a Buyers Agent to start the task of negotiating contract terms and finalising the purchase of the land.

It is recommended to always use a Buyers Agent as they have a greater understanding of the development process and in a majority of cases the fees charged by the Buyers Agent will be covered by the savings you will acquire in their negotiation skills.

Through the discussions you have with the Buyers Agent you should be considering how much you are willing to pay for the land and the end value including the dwellings. This will provide you with an opportunity to work towards becoming a developer that makes a commercial profit.

If you haven’t already consulted with an architect, you can request the development plans that fit within the planning regulations set out by the local council guidelines.

As this stage can be quite complex it is recommended to consult your Town Planner, as they can provide assistance by offering feedback throughout the design process, assisting in writing the development application, all while handling any further requests and objections.

At this point you will need the services of a Land Surveyor, who will establish the title land boundaries, conduct a survey surrounding properties and the potential impacts from your development. It may also be required that your Land Surveyor would need to consolidate a number of titles into one title, in the instance that you have purchased more than one block or plans are drawn up for subdivision.

Once development approval has been granted this is the stage where you will finalise your your build plans and this will require the involvement of an architect and engineers.

Your architect are considered your creative designers for your development but they can also assist in town planning, consultation and preparation of working detailed drawings and finally administrating the building contract.

It is important to know that while your architect can assist with bringing your development to life, you need to ensure that the development will be structurally sound. In order to do this you will need to consult with an engineer and in some cases you may need more than one type of engineer. These different types of engineers may include:

  • Geotechnical or Soil Engineers – they test the soil in order to establish the necessary conditions required for a structural engineer
  • Structural Engineer – they work above the ground to ensure a structural design that is both functional and cost effective, by working with the architect to consider the weight of materials
  • Civil Engineers – they design the roads and bridges, so from a residential development property this may not be required
  • Hydraulic & Fire Engineers – they work on high-rise apartments or commercial buildings to assist with pipes for water, gas, waste as well as fire hydrants, hose reels and sprinkler systems

Now is the time to start looking for the right builder. This can be a daunting process so you can always enlist the help pf your Project Manager.

When looking for the right builder it is advisable to sort out recommendations. These recommendations could come from friends, family, or even your architect.

It is important to only employ a registered building practitioner and be sure to request a copy of all their builder’s insurance certificates.

Once you have decided on a builder, the contract between yourself and the builder should include overall terms agreed by both parties and outlining the price and the payment schedule.

More importantly it will outline the scope of the development project, who is involved in the development project and what each party is expected to do to contribute to the development project.

Construction has started and you are on your way to completion.

Please bare in mind that some build can take anywhere from six to 12 months, as you will need to take into consideration poor weather, and other potential disrupters.

If you have taken on a Quantity Surveyor to support you through the Development Process they will assist in ensuring that the payments are made to the building contractor.

During the construction, a Building Surveyor will need to certify that work has been completed in accordance with regulations and also to specific building standards.

Upon completion of construction, the build is complete and you can finalise the project.

It is now the time to submit the plans for subdivision in order to obtain separate titles for each dwelling.

This is the time you finalise your decision on either leasing or selling your development property.

What do you do with your property development upon completion?

You have two options:

Option 1 – Sell Your Development

There are some developers that prefer to use their property development for a short term profit as opposed to long term profit. The advantage to selling your development is that you will make a profit straight away, pay off the development loan quickly and then move onto their next project with both more experience and more funds.

The disadvantage to this decision is that there is no opportunity to make more money from the property.

Option 2 – Retain for Long Term Investment

By retaining the property development for a long term investment you can also benefit from the following:

  • Higher rental yields through the tenants paying retail rent for your wholesale investment property.
  • Greater financing opportunities as banks will use the development properties current market value to allow you to refinance and withdraw additional funds.
  • Capital works depreciation allowances which are available to different properties depending on their type, industry and construction commencement date.

Commercial Property

Whether you’re a Business owner looking to purchase a premise from which to operate your business or a professional property investor looking to expand your portfolio, Commercial Property finance can be confusing.

We’ve been able to provide some of our greatest savings to our clients in this market, either from a simple loan restructure to a complete refinance.

Here are some Commercial Properties we have helped out clients with:

  • Childcare centres
  • Gymnasiums
  • Industrial Warehouses
  • Medical Centres
  • Hotels & Motels
  • Convention Centres

Self Managed Super Fund (SMSF)

In recent years it has become more popular amongst Australians to use their Self Managed Super Fund (SMSF) to buy investment properties.

A self managed super fund is a savings account that you manage yourself to fund your retirement, as opposed to a fund that is managed by a superannuation provider.

How does the borrowing work?

Once your SMSF is established, and your existing superannuation is transferred across, you will be able to use the existing superannuation as a deposit. If you decide to invest in property and use borrowings to achieve this end, you will be required to establish a Bare Trust which will hold the property on behalf of the SMSF.

Once your Bare Trust is established, Lenders will then advance (subject to servicing guidelines) up to 80% of the purchase price to assist with the settlement of the property.  The SMSF will then need to have sufficient funds to cover the deposit and settlement costs.  It’s also important that the SMSF has some surplus funds available after settlement.

The loan will be serviced from a combination of the rent received, returns from other investments, SGC payments and any Salary Sacrifice contributions.

To comply with the legislation, the borrowings will have to be Limited Recourse borrowings, meaning that the lenders only have recourse against the security property in the event of default, thus protecting your remaining Superannuation assets.

Lenders Loan to Valuation Ratio’s and servicing guidelines differ significantly, as do the costs and the interest rates charged.  It is essential that you have your finance sorted before you proceed with any property purchase.

There are a number of benefits to investing in property via your superannuation fund.

Most Superannuation funds are predominantly invested in a combination of equities, share market listed property holdings, bonds and perhaps straight cash.  As the past few years have indicated, this exposure can have a major impact on the value of your superannuation investments due to the volatility of the world’s share markets.  It can also prove cheaper to run your own fund as opposed to what you may be getting charged from your current Fund Manager.

We all know that leverage is    an excellent way to enhance the returns on your investments.  If you’re invested in a retail or industry fund, there is no way of obtaining leverage on your investments.

This may not appeal to everyone, but to many the idea of being able to decide where their funds are invested and to manage those funds is quite appealing.  Property is an investment class that most people feel comfortable managing.

Without going into too much detail, as this is an area that warrants it’s own article, purchasing property via a SMSF provides a number of taxation benefits both immediately and in the future that just aren’t achievable when you invest outside of super.  For instance, Superannuation Guarantee Contributions  (SGC) and Salary Sacrifice contributions to the SMSF are only taxed at 15%, whereas if this income was paid to the member as a salary it would be taxed at their marginal rate which is most likely above 30% and possibly as high as 42.5%.

The ability to use your superannuation     guarantee payments to service any proposed loans means that you can purchase a property without impacting your day to day lifestyle.

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