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Investing

2009 is estimated to be the year rental prices overtake mortgage repayments in some areas of Sydney. What does this mean?


It means that if you have the means to purchase an investment property you may very well be able to have your tenants pay it off for you. What constitutes having the ‘means’ to buy an investment property? You need a steady, reasonable income and some equity in your own home. It’s as easy as that. To find out if we can tailor an investment strategy to match your needs, contact us today. There’s no obligation and you may be surprised to find how easy it is to start building your own property portfolio – and your wealth – today!

The Federal Minister for Housing Tanya Plibersek stated that "Australia could have an under-supply of 200,000 homes by 2013". A keen investor herself, Pauline Sultana knows about the best ways to invest in property. Why not call and speak to her now and take advantage of her experience in property investment?

The Advantages of Investing in Property


Increased income: Any seasoned property investor will tell you how much easier it is to finance your fourth property than your first. Once you have an investment property bringing in a rental income you’re seen as having a diversified income ie. Income coming from different places – which the bank sees as safer than one income.

Becoming a property millionaire: This is a term you have probably heard before and can achieve yourself, but you may not know how easy it is. Within a few years you could become a property millionaire. If you'd like to find out how to use your existing equity to purchase another property, contact us now!

Strong rental demand: The population continues to grow (2007/08 tax year saw almost 200,000 new migrants settle in Australia, the largest number since the 1960’s and estimated to grow for the next few years) and around 30% of houses are filled with renters not owners. In 2008 only 140,000 new houses were built, far short of the estimated 200,000 the Commonwealth Treasury deemed would be necessary. The drop in new constructions means that the rental market is becoming much more competitive, driving rental prices up and making rental vacancies scarce. Even during the Global Financial Crisis property is appreciating. In the period between January and May 2009 the median price for apartments in Australia rose 3.9%, confirming that population increases and rental demand will grow the market in high-density housing.

Tax structuring: Property investments can be negatively geared – saving you on tax; positively geared – making more money than they cost to upkeep or negatively geared with positive cash flow – meaning they are losing money on paper and saving you on tax, but they in fact are bringing in surplus funds. We are not tax accountants, but we are mortgage professionals, and we specialise in investment (Pride Mortgage Services proprietor Pauline Sultana has not only built up her clients investment portfolios, but her own as well. She can share the secrets that have made her clients wealthy as well as what she has learnt first hand!) and can tailor a property investment strategy to meet your exact needs, just call us today.

Also Note...


Buying investment property comes with many of the same costs as buying your first home (click here to see some of the costs associated with buying property), and can also make you more vulnerable to rising interest rates.

When renting out your property, there is always the worry of having a nightmare tenant. While this is a reality, there are measures you can take to guard against potential loss from having bad tenants. Landlords insurance can cover you for any loss or damage at the hands of your tenants. Pride Mortgage Services can also help you with many of your insurance needs. If we don’t carry the product that’s right for you, we can certainly point you in the right direction.

Property


Property generally doubles in value every ten years, making it one of the safest investments, as safe as houses, in fact. Prices – like in any market – will fluctuate here and there, but property is a long-term investment and over time, with prices correcting, levelling out and appreciating, you will find that your net worth may increase over the course of years, without having cost you any extra. To discuss ways you can make your money work smarter and harder for you, call us now and ask about ways you can start your investment portfolio.

“With property prices still recovering (i.e. prices are still affordable now, but are tipped to be on the way up), interest rates low and rental prices steep (rents have increased by 34% in the last three years) it could be possible to buy and pay off the mortgage on an investment property without it costing you a cent over the course of the loan. With your property/ies increasing in value over time, you have more equity to buy another investment and another.

For example: Median rent in Sydney is $420/wk, this represents the entire mortgage repayment of a loan of more than $315,000 in today’s borrowing conditions. So if you have even a little equity in your home, you could buy a 2nd property, rent it out and let the rent pay off the mortgage. You would own the property without ever making a mortgage payment on your own. So if you have any equity on your home and would like to investigate starting a property portfolio – without increasing your repayments – give us a call.” –“Investing without spending a cent” from the Winter 2009 Pride Mortgage Services newsletter.

To see the entire article click here to go to our archive section.