Capital Properties buyers agent service
Are you in the Defence Force and are considering buying a property within your posting locality? Or maybe an established investment property? Our buyers agent service will help you find your ideal property and negotiate the lowest price and settlement with ease.
Capital Properties buyers agent service specialises in sourcing all types of property options. We research current market value for owner-occupied properties. We recommend investment properties with higher yield potential, as well as high growth property investments. And we’ll evaluate return on industrial and commercial property and investment properties that have value add potential with subdivisions and renovations.
How our buyers agent service works
Meet with one of our Capital Properties buyers agent experts for a Free Discovery Session and we’ll give you a taste of what it will be like to work with us. If you like what you see – and we’re confident that you will – we’ll grab your information and determine your borrowing capacity. Then we’ll follow up with a second meeting, or “Strategy Session”.
During this Strategy Session, we’ll ask questions like “How much do want to be worth when you retire?” and will develop a strategy to help you achieve your goals. Once we’ve nailed your criteria and agreed a plan, we’ll help you complete an engagement letter and contract to buy.
Then we find the most suitable property candidates and present you with the best options.
Although we have a 3-month buyers agent service engagement period, we’ll check in with you weekly for updates and to discuss options.
What you get with Capital Properties buyers agent service
We offer full buyers agent services to help you find the ideal property. No stress. Just results.
What is a buyers agent?
Buyers agents are licensed professionals who specialise in locating, evaluating, and negotiating the purchase of property on behalf of buyers. They do not sell real estate. They are engaged independently and paid for by the buyer to act on their behalf. Whereas a selling agent can accept a commission from both parties in the same transaction, a buyers agent can only legally act for the buyer.
Benefits of using a buyers agent service
Get the edge in a competitive market. Having your own property professional representing your interests throughout the purchasing process saves you:
When you’re searching for property, finding the ideal house or block of land can feel all consuming. Many of our clients tell us that they spend an exorbitant amount of time on realestate.com.au without ever finding anything suitable. A lot of that time online is fruitless when you don’t know exactly what you’re looking for.
They often come to us with the same questions. What’s the best way to find the ideal property? Then once you’ve found it, what do you need to do to make sure you secure it?
Engaging a Capital Properties buyers agent means we answer these questions and more to ensure you find your perfect property. Our Capital Properties 7-step process allows us to short list suitable property options, and we work with you to ensure you have everything you need to make offers and close the sale. The first step of this process is locking down your requirements and our Capital Properties Buyer Checklist is the perfect place to start.
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When kicking off this Capital Properties Buyer Checklist you must first ask yourself what specific type of property you’re looking for. For example:
YOUR PROPERTY BUYER CHECKLIST
In this blog post we’ll share some tips to help you choose the best location and speed up your property search. The Capital Properties Buyer Checklist will streamline the process for you to ensure you have a clear picture of what you want and a strategy to get it. Try to be specific as possible when working through this list for the best outcome.
We start with finance, simply because it’s the best place to start. When you know your budget and have finance sorted, you’ll have the confidence to start making offers and be in the best possible position to negotiate on properties.
Take time to think about what types of conditions you might want to insert in the contract prior to making offers. Then when your offer is accepted you can communicate those conditions through the vendors agent.
Here are some examples of contract conditions to communicate with your offer:
As there are some unfortunate schemes that set out to con potential buyers, having a buyers agent to help you negotiate the conditions of sale is wise. For example, your buyers agent can provide title searches to confirm if the seller is the actual owner.
As buyer, you can negotiate when deposits are paid. We recommend that you put down a small initial deposit of approximately $1,000. Then the balance deposit will be due once the contract of sale goes unconditional.
The settlement terms are one of the key negotiating contract conditions in purchasing. In ‘hot’ markets vendors prefer shorter time frames, so its advantageous if you can settle quickly. However, you need to be realistic that you can achieve those milestones.
Consider what you’ll need to achieve to meet your ideal settlement timeframe first, and then work out what the pessimistic time frame might be. The realistic time frame might sit somewhere in between. A 28-day settlement is a pretty standard timeline. Longer settlement periods would apply to properties without a finance cause.
You can’t decide on a location without also considering what type of property you’re looking for. This is where the answers to the first question above will come into play. For example, decide if you’re purchasing a home to live in or buying an investment property? If it’s an investment, are you focused on residential, commercial and/or industrial? Are you considering using the property as holiday home? Is the purchase for your business and/or for development? Each of these different scenarios should strongly influence your decision-making process about where is best place to buy.
To settle on the best location, create a wish list with some broad areas of interest or specific suburbs and concentrate your search there.
When considering the size of the property, you must first think about the size of the land. Is the land suitable for residential, commercial, industrial or development? Clarify how many bedrooms/bathrooms/living areas you require. Will open plan or separate living be best? How much off-street parking is required for vehicles?
There are many different construction methods, so this comes down to personal taste. For example, do you prefer brick veneer over timber weatherboard? What styles suit your personality? Modern or contemporary? Are you more likely to choose a Queensland colonial style, workers cottage or art deco? Are you looking for an un-renovated project, or a turnkey project?
Consider what property features you want/need? For example, in hotter climates air conditioning is a must. If sustainability is important, then properties with solar power/batteries are worth the investment. If you, or any potential future buyer, is likely to work from home then the property will require access to technology like NBN or 5G mobile phone coverage. If you want to keep animals, you’ll need to consider fencing and water supply. Or you might want a pool and/or views?
This Capital Properties Buyer Checklist should give you a good start in formulating a buying strategy. It will also help you to narrow down and create a short list for your property search. Spending a few moments to consider these points will end up saving you heaps of time and stress and allow you to focus on getting you exactly what you’re after.
As always, our Capital Properties buyers agent service is available to help you source all types of property options. A great place to start is with our Free Discovery Session which will give you a taste of what it’s like to work with us. Then our follow-up Strategy Session will help nail a plan to help you find your perfect property and achieve your goals.
The Windfall Gains Tax (WGT) was first announced by the Victorian government in May 2021. On 20th November the ‘Windfall Gains Tax and State Taxation and Other Acts Further Amendment Bill 2021’ was passed into Parliament. The WGT is scheduled to come into effect from 1st July 2023, with widespread concern that it will lead to an increase in land costs and resulting housing shortages in regional areas.
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What is the Windfall gains Tax?
The Windfall Gains Tax (WGT) is a new Victorian tax, that will be payable to the State Revenue Office after there’s been an uplift of more than $100,000 in land value due to rezoning. See below for exemptions*.
Who will the Windfall Gains Tax affect?
The WGT applies to Victorians with land that’s been rezoned resulting in a land value increase of more than $100,000. If the land is held on trust, the trustee will be assessed for the WGT. If the land is owned by multiple parties, the owners will be jointly assessed. Where the land is managed by corporations and/or trusts, all members of the group will be liable for WGT. The legislation for grouping rules is wider than the comparable rules for land tax purposes, especially when applied to groups of trusts.
To put it simply, the WGT targets developers in regional areas who purchase development sites that will be rezoned to a more valuable land class, for example from farms to residential land.
When is the Windfall Gains Tax payable?
The landowner/developer will become liable for WGT at the time of the rezoning event. The Commissioner of State Revenue will issue a ‘notice of assessment’ which states the liability and the due date of payment.
It’s up to the person that’s been sent the ‘notice of assessment’, to notify the Commissioner if there are any errors or omissions within 60 days of the assessment issue date.
*Is anyone exempt from the Windfall Gains Tax?
The Treasurer may allow exemptions to the Windfall Gains Tax, for “excluded rezoning” such as these examples:
How much Windfall Gains Tax will be payable?
The maximum tax payable is 50% of the uplift. If the rezoning adds $100,000-$500,000 in value to the land, the landowner/developer must pay 62.5% of the uplift above $100,000. If the rezoning adds $500,000 or more, there’s a 50% tax rate on the purchase.
How will the Windfall Gains Tax impact construction?
Despite the Victorian ‘building boom’ being predicted to last for at least another year, industry experts are predicting a slump by mid 2023, meaning the Windfall Gains Tax will hit builders at the worst possible time.
Matthew Kandelaars, Chief Executive of the Urban Development Institute of Australia (Victoria) says that the industry has calculated an estimated $170m in lost stamp duty, 20,000 lost sector jobs and a further 100,000 jobs indirectly linked to the WGT.
What does the Windfall Gains Tax mean for regional Victoria?
There is widespread concern that the WGT will negatively impact housing affordability in regional areas and create a more significant divide between metro and rural Victoria. We’ve already seen a significant shift of population to regional areas in the last 2 years, due to the pandemic and rising costs of property in Melbourne. With the increasing land costs due to WGT many developers will now reconsider development meaning fewer new homes are likely to be built.
When speaking to Nathan Mayby at The Herald Sun, Fiona Nield, Executive Director of the Housing Industry Association (HIA – Victoria), suggests that the Windfall Gains Tax could have a detrimental impact on regional Victoria. She said, “HIA modelling shows that the price of a housing lot in the Geelong growth area is set to increase by as much as $53,000 under the windfall gains tax”.
This significant increase in land costs could result in the loss of thousands of proposed projects, including the building of 300 affordable, social or disabled-access homes. Thus, resulting in a massive $7.7bn hit to the economy.
Also, home prices in some areas would surpass the regional cap on the government’s Homebuyer Fund, reducing homebuyers access to homes below $600,000. Incidentally, the Homebuyer Fund cap for Metropolitan Melbourne and Geelong is $950,000.
How will the Windfall Gains Tax impact Melbourne’s outer suburbs?
The Windfall Gains Tax will also likely lead to raised home and commercial prices in key infill pockets around Melbourne.
For example, in anticipation of the new Metro Tunnel’s Arden Station opening in 2025, the Arden Precinct in North Melbourne was pipped for rezoning to facilitate approximately 15,000 residents and provide 34,000 jobs. While developers have costed several projects at the site, some rezoning is yet to take place. If developers don’t meet the 1st July 2023 deadline, costs for buyers will increase dramatically and housing supply will be severely impacted.
What’s next for the Windfall Gains Tax?
The Windfall Gains Tax now is now awaiting Royal Assent before it can be implemented. As always, the team at Capital Properties will keep you updated on any changes to the WGT roll-out as well as any other relevant changes in the property market.
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Have you heard about the most recent APRA lending changes?
On Wednesday 6th October 2021, the Australian Prudential Regulation Authority (APRA) sent a letter to all authorised deposit-taking institutions (ADIs) – that includes banks, building societies and credit unions – to advise them of changes to mortgage serviceability buffers.
This letter stated that the minimum interest rate buffer on home loan applications needed to increase from 2.5 to 3 percentage points, effective from 1st November 2021. Thus, bringing the buffer in line with international practice.
We’ll discuss what the APRA lending changes mean for everyone, from first-time buyers to property investors with large portfolios.
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Why has APRA increased the lending buffer?
In Australia, the average household debt, in comparison to income, is historically high. APRA acknowledged in its letter that current residential mortgage lending is “underscored by very low interest rates and rapidly increasing housing prices.” And the rate of demand for loans is expected to continue to exceed household income for the near future, driving even more debt.
Although the Australian banking sector is currently sound, these increasing levels of debt are risky for the financial system. Therefore, APRA, with the support of the Council of Financial Regulators (CFR), is taking this step to reduce financial stability risks.
APRA chairman Wayne Byres said: “While the banking system is well capitalised and lending standards overall have held up, increases in the share of heavily indebted borrowers, and leverage in the household sector more broadly, mean that medium-term risks to financial stability are building.”
How does this buffer contribute to less risk?
Residential real estate values have jumped 20.3% (nationwide average) in the last 12 months. Although the market is strong, many are concerned that this level of credit growth is not sustainable. APRA noted that in the June quarter of 2021, more than one in five new home loan applications were approved to people who were borrowing more than six times their (pre-taxable) income.
Although the economy is expected to gradually recover post lockdowns, lenders still need to ensure that their customers can afford to service their loans. The 3% buffer provides a safe contingency to allow for changes in the borrower’s income or expenses, or any increases in interest rates during the lifetime of the loan. APRA estimates this lending change will reduce a household’s “maximum borrowing capacity” by approximately 5%.
How is the lending buffer changing?
Most ADIs are currently operating with a buffer of 2.5 percentage points. From 1st November, this will increase to 3.0 percentage points over the loan interest rate. This means that banks will have to ensure that any new borrowers can still afford their mortgage repayments if their home loan interest rates rise to be 3 percentage points above their current rate.
For example, if you were to apply for a mortgage with an interest rate of 2%, the bank needs to allow a 3% buffer. That means they will ask for evidence to make sure you can make repayments of a 5% interest rate. If you can’t, your loan application will be denied.
How will the APRA lending change be implemented?
Each bank/lender will implement these changes differently, so, as always, it’s best to speak to your mortgage broker/bank directly to find out how this will affect you.
The expectation is that any existing pre-approvals will be honoured. For example, the Commonwealth bank have assured their customers that if they have exchanged contracts, even if they haven’t settled yet, they will honour their existing loan approval. Therefore the 3% buffer will only apply to any new applicants.
Although lenders have flexibility with how they intend to implement the increased buffer, there will be a fine if they hold more reserves against losses, so swift implementation is expected to avoid any drop in profits.
What does it mean for my home loan application?
The reality is that most people don’t borrow at their full capacity, so these changes may not affect you. In fact, the Commonwealth Bank says only 8% of its home loan customers borrow the maximum amount they are approved for.
The 3% serviceability buffer means that the maximum amount you can borrow relative to your income and expenses will be lower than it was under the old serviceability test of 2.5%.
For example, if the most you could borrow up until now was $500,000, then after November 1st you will only be able to borrow $475,000. RateCity.com.au estimate that the maximum borrowing capacity for the average Australian family could potentially be reduced by approximately $35,000. That assumption is based on a household with one full-time worker, one part-time worker and 2 dependent children.
|Current borrowing capacity||5% less borrowing capacity||Difference|
What does the APRA lending change mean for first-home buyers?
Mortgages have increased significantly since the Reserve Bank started reduced interest rates in 2019. In NSW, the average mortgage has jumped by 36% to $755,000 while in Victoria it has increased by a third to $634,000.
The Housing Industry Association (HIA) is concerned that the new rule will make it increasingly difficult for first-home owners to get on the property ladder. HIA’s chief economist, Tim Reardon said “Over 90% of renters aspire to own their own home but less than half of them expect that they will ever achieve this goal.” This “will make this goal even harder“.
Although the interest rate buffer increase applies to all new borrowers, APRA said the impact is likely to be felt more by investors than owner-occupiers. That’s because investors tend to borrow at higher levels of leverage and often have other debts.
APRA says the increased buffer was essential due to a significant increase in the borrowing of large amounts in recent months. APRA also confirmed that, together with other members of the CFR, they are monitoring any increase in key risk trends.
They said “Growing portfolio concentrations of high debt-to-income loans also need to be monitored closely. Should concentrations of this lending continue to rise, APRA would consider the need for further macroprudential measure.”
As always, at Capital Properties, we’ll do our best to keep you informed of these, and other changes in the property market. To make sure you never miss out, join our like-minded, Switched-on Property Investors Program and learn about future possibilities.
The National Disability Insurance Scheme or ‘NDIS’ is an Australian Government program that funds costs associated with disability. It was legislated in 2013 and went into full operation in 2020. You probably already know someone who’s benefiting from it, so what are your chances of making it work for you?
Let’s start by saying it’s not a straightforward procedure. If it was easy, then everyone would be on to it! But because the returns are through the roof it’s definitely something worth investigating. Feel free to get in touch with us at Capital Properties so we can help you work through the process in more detail. For now, we’ll attempt to keep our guide to NDIS as simple and succinct as possible and have included some links so you can access more information.
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Here’s what you need to know about NDIS:
The National Disability Insurance Scheme (NDIS) has committed to providing more than $22 billion in funding a year (within the next 5 years), to an estimated 500,000 Australians who have permanent and significant disability. Let’s break it down…
National: The NDIS is being introduced progressively across all states and territories.
Disability: The NDIS provides support to eligible people with an intellectual, physical, sensory, cognitive, and psychosocial disability. Early intervention supports can also be provided for eligible people with disability or children with developmental delay.
Insurance: The NDIS gives all Australians peace of mind that they will get the support they need if they, their child, or loved one, is born with or acquires a permanent and significant disability.
Scheme: The NDIS is not a welfare system. It is designed to help people get the support they need so their skills and independence improve over time. This means providing people with information about services in their communities that can help.
SDA stands for Specialist Disability Accommodation which is a range of housing designed for eligible NDIS candidates that have extreme functional impairment and/or require a lot of support at home. SDA aims to help residents to live more independently. If you’re building or modifying a build to rent to a person with a disability, knowing the standards required to meet SDA approval is essential.
To meet SDA standards of accommodation, you must comply with 4 categories of design, as set out in the SDA Rules (2020). These are:
To learn more about each category and read what the definition and minimum requirements are, click here to access the SDA Design Category Requirements Guidelines PDF. At Capital Properties we recommend that you build to cater for Silver & Platinum Level tenants. This opens up far more opportunities which will ultimately make your property more rentable.
Make sure you choose the right builder
Building a house within SDA guidelines means more restrictions than a ‘normal’ build. These homes must deliver an outcome which satisfies the needs of the investor, providers, and residents. Only a specialist builder will be able to meet the needs of each shareholder and in particular, the residents.
Where to start?
Finance qualification – In our experience, experienced investors would be best suited to working within NDIS guidelines. Due to the extra construction costs of building this type of property, investors can expect a valuation shortfall.
It’s also worth noting that not all lenders provide lending for this type of property. Investors may need a minimum 20% – 30% deposit depending on the lender. Also (again, depending on lender), this type of transaction could be viewed as a commercial project and therefore may require commercial lending. We’ve discussed being finance ready in this blog: “Why being finance ready pays dividends”.
Location, location, location – Take your time to do your homework and scout the best location. We would suggest a location with good capital growth and an increasing population. Preferably near a major capital city that provides good infrastructure and easy access to health care.
Property type – Speak to NDIS providers in your preferred location and ask for insights on the accommodation best suited for the area. They can confirm if your plan for Silver/Platinum level housing is appropriate and in demand.
Run cash flows – It seems to be common practice with an NDIS property investment that the sales consultant will over-quote the achievable rental. The 2021-22 SDA price calculator is a useful tool that allows you to run through a couple of different scenarios. Click here or above to access the calculator.
Nail the design – It’s vital to choose an appropriate design. Make sure you work within the building accredited SDA design standard. You will need to engage an SDA assessor at the design stage. This assessor is the only person that can issue an SDA category compliance certificate, to confirm that the design has met the requirements of the SDA design standard.
Partner with private SDA provider – As an investor, the easiest and best approach is to partner with a company that provides the interface with the tenants and government to manage the SDA property on your behalf. As owner, you will essentially enter a SDA Management Agreement with a SDA Provider Group so that the lease agreement will be with the SDA Provider Group. That means that they’ll take care of the property management, maintenance, compliance, SDA recertification, participant engagement and placement audits, making your life much easier.
Deposits – Place deposits down on the land and get set to build.
Contracts – Enter contracts and get valuations under way. Then confirm finance.
Settlement – Land Settlement. We’ve written about this process in the blog “Yay! My property settled. Now what?”.
Construction – Start construction! As always, we recommend you use a building inspector when constructing.
Specialised Insurance – It’s vital to get specialist insurance advice for a SDA build. Bear in mind that insurance costs are likely to be over the odds for the build due to the extra SDA requirement. That’s despite the fact that these builds are government backed, because there’s always a risk that with a change in government those circumstances could change. A valuation short fall is to be expected and there’s potentially a higher risk securing the right tenants. Given these circumstances and the 10 – 20 year average lease, these builds are not recommended for the first timer buyer.
Check out this earlier blog post where we discussed further insurance requirements in “How to choose the right insurances for your investment property”.
Pros of a National Disability Insurance Scheme SDA build
Cons of the NDIS Specialist Disability Accommodation build
If you’re interested in learning more about an NDIS build, or any property investment, we can help. Click on this link to access a free Capital Properties discovery session. And if you’re already onboard, our Pinnacle Support Program will support you in finding out more.
What’s the Victorian Homebuyer Fund all about?
On the back of a tough couple of years for Victoria, the Victorian Government has launched a new home-buyer fund called the Victorian Homebuyer Fund (VHF). This is essentially a shared equity scheme which allows successful applicants to purchase a property with a minimum deposit of 5%. The Victorian government will then pay up to 25% of the purchase price in exchange for an equivalent share, or proportional interest in the property.
With a total fund of $500 million, the scheme is expected to support approximately 3,000 home buyers. We’ll share full eligibility requirements and answer some of the most common questions about the Victorian Homebuyer Fund below.
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Is the Victorian Homebuyer Fund the same as the HomesVic Shared Equity Scheme?
The VHF is an expansion of the government’s HomesVic scheme which was a pilot scheme implemented in 2018 to help low- to medium-income-earning Victorians purchase their first home. Under that $50 million scheme, the government helped over 300 first home buyers onto the property market in 33 target areas. Those “priority areas” included 7 peri-urban towns, 85 Melbourne suburbs and 130 regional towns. Applicants were invited from people with incomes up to $75,000 for singles, and up to $95,000 for couples/families.
So how is the Victorian Homebuyer Fund different?
With the VHF, the eligibility is broader than the HomesVic pilot scheme, making it accessible to even more home buyers. Buyers can now purchase homes in a wider range of locations, and income limits are not as restrictive as the initial pilot.
Plus, it’s no longer restricted to just first home buyers. What remains the same is that eligible buyers only need to pay a 5% deposit for the home. The government will then fund 25% and the remaining 70% will be financed by the home buyer’s chosen lender. Currently, both Bank Australia and Bendigo Bank are participating in the scheme. For eligible Aboriginal or Torres Strait Islander homebuyers, the government will contribute up to 35% and the minimum required deposit is 3.5%.
Eligibility requirements for the VHF
Home buyers are eligible to apply if they:
What type of property is eligible?
Both new and existing residential properties are eligible, as long as a certificate of occupancy has been issued prior to the contract of sale date. The property must be ready for the buyer to live in, or if it’s under a lease, that lease must have expired within 1 year of the sale date and be ready for the owners to move in. Off-the-plan properties and vacant land are not eligible.
The property must have a maximum purchase price of $950,000 in Metro Melbourne and Geelong, or $600,000 or less in eligible regional locations, see below.
Does the Victorian Homebuyer Fund allow you to purchase anywhere in Victoria?
Can you access other housing schemes or grants if you apply for the Victorian Homebuyer Fund?
Yes! Homebuyer Fund candidates may also be eligible for other Victorian government housing schemes, including the First Home Owner Grant (aka the 5% Deposit Scheme) and other grants – read this blog: “Great Government Grant Grab”.
Does the state’s share remain unchanged?
As a Shared Equity Scheme, the value of the state’s share/interest in the property will change in line with property value. Appreciation in the home’s value means that the VHF will share in any gains in the home buyer’s property’s value.
Home buyers can (with prior approval), repay the fund’s share in their property or buy out the government’s share of the property at market value by refinancing, using savings or using the proceeds when they sell the property. The government will reinvest those funds to help other prospective home buyers enter the market.
Are there strings attached to the Victorian Homebuyer Fund?
If you are an eligible candidate, then there are few limitations to the fund. Once you have been provisionally approved for the Homebuyer Fund, you have six months to enter into a contract of sale for an eligible home.
Successful applicants for the VHF must meet certain ongoing obligations. For example, you will need to notify the State Revenue Office of any changes to your circumstances (e.g. change of employment) within 10 business days. See below for some of these ongoing responsibilities:
– Annual review
After you’ve purchased your home, you must provide the State Revenue Office with an annual update confirming that you’re still eligible for the Homebuyer Fund. This includes payslips (for employees), tax returns (for self-employed candidates), utility bills, home loan statements and a building insurance certificate.
– Maintaining your property
You are expected to maintain the property to prevent unnecessary devaluation. Any structural modifications or renovations costing more than $10,000 or requiring council approval must be approved before works begin.
You must make all relevant payments on time. This includes utilities, body corporate fees, council rates, stamp duty and home loan repayments. You may be required to start repaying the Homebuyer Fund’s interest in your property should your financial circumstance change, e.g. if your annual income exceeds the agreed threshold for two years in a row, or you receive a windfall of $10,000 or more.
– Exiting the fund
You must seek approval if you choose to refinance or sell your property. You must also get approval if you want to make additional payments with an intent to exit the Homebuyer Fund or reduce the State’s equity below 5 percentage points i.e. from 25% to 4% in the first two years.
– What happens when the property is sold?
When you sell your property, the proceeds must pay off your remaining home loan to the bank and the equity share to the Victorian Homebuyer Fund. Of course, payments must also be made if there are other outstanding debts e.g. council rates. The remaining profit belongs to you, the homeowner.
Before you apply, check your eligibility and the list of eligible locations where you can purchase a property. If you meet these criteria, then prepare the documentation required to apply for a home loan. We’ve discussed this in the blog “Why being finance ready pays dividends”.
This link will take you to the Victorian Homebuyer Fund application.
If you have any questions about your eligibility for the Victorian Homebuyer Fund, we can help.
Most ADF members are so busy working they don’t have time to focus on other aspects of their life, not to mention long-term planning. Sure, the idea is to work an eight-hour day and then make time for you, but with training, exercises and deployments it sometimes seems impossible get off base. We know, we’ve been there.
Lucky for us, we had some great mentors who encouraged us to set aside some time for the important stuff. That’s why we encourage you to take some time to really think about your goals. Because what you invest in now will pay dividends in the future. You can mind-map it. Write it down. Or just wake up every day with a plan. It doesn’t matter, just as long as you promise to make that commitment to invest in yourself.
We’re not going to assume we know what’s important to you, but we want to share our top 6 things we believe are worth the investment.
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Education is the ultimate investment in yourself. As most military positions don’t have a ‘civi’ equivalent, it’s important to consider a plan for a future outside of the Force. Waiting to upskill once you pull in the pin is a risky strategy as many courses have entry requirements that you might not be eligible for.
The Defence offers a great range of training courses and study opportunities that you can do part-time. To find out more, visit unsw.adfa.edu.au/study/ or contact UNSW Student Administrative Services by email on firstname.lastname@example.org or on (02) 6268 6000.
At Capital Properties, our mission is to empower and educate Defence Force members to set goals for building financial independence, so our ‘Learn and Grow’ meetings are great learning opportunities and we have a heap of resources and tools designed to help you get ahead.
This is an easy one to take for granted. But in the words of Herophilus, “When health is absent, wisdom cannot reveal itself, art cannot manifest, strength cannot fight, wealth becomes useless, and intelligence cannot be applied.” And who are we to argue? We’ve all seen it. Those people that work every day of their lives only to retire and collapse with a heart attack within weeks. The reality is, you need to put the work in to stay healthy, just as you must with any other investment.
And look, we all know what that means. Take care with your diet. Put simply that means eating real, whole food. Eat ethically sourced meat and fish if you’re carnivore, or substitute with healthy protein sources if you’re vegetarian (and don’t forget your B12 supplements). Then enjoy plenty of vegetables, some nuts and seeds, some fruit, a little starch and minimal sugar. Avoid highly processed foods and keep your food/calorie intake to levels that support exercise but not excess body fat. Don’t over-indulge in alcohol and don’t smoke.
Exercise every day. Find something you love and do that but change it up every now and then to challenge your body. Whether that’s surfing, CrossFit, trekking, Olympic weightlifting or dancing, it doesn’t matter. Just get your body moving, elevate that heart rate and enjoy the feel-good hormones afterwards! Which is a great segue to the next key element of health…
Look after your mental health. This looks different for everyone but there are a few things we can all get better at. Take time out when you need it. Learn how to talk about your feelings and find someone you can talk to if there’s something getting to you. A problem shared is a problem halved remember! Utilise services like the ‘All-hours Support Line’ (ASL). This is a confidential service for ADF members and their families that’s available 24 hours a day, seven days a week. Organisations like www.beyondblue.org.au also provide information and support to help you achieve your best possible mental health.
Human beings are hardwired to connect to others from the moment we’re born. Brené Brown, Research Professor at the University of Houston and author of five #1 New York Times bestsellers explains that “We are biologically, cognitively, physically, and spiritually wired to love, to be loved, and to belong.”
Healthy relationships are a vital component of health and wellbeing. We know that maintaining a strong social network actively contributes to a long, healthy, and happy life. On the other hand, feeling isolated can lead to depression, decreased immune function and high blood pressure. In fact, one survey by the National Bureau of Economic Research found that doubling your group of friends improves your wellbeing as much as a 50% increase in income!
So, how do we nurture relationships? Firstly, make time for the people most important to you. Try to physically be there for them as much as possible and stay in touch when you can’t. When you’re there, pay attention. Put down your phone and communicate. Practice speaking honestly and listening well. Tell them and show them that you appreciate them. Own up to your mistakes and work on your faults. Be ready to forgive if they’ve mucked up and let them know that you’ve got their back. Commit to putting in the hard yards and talking through the tough times. And if you’re struggling – get some help. Relationship counselling can help you find tools and strategies to really enrich your relationship and move past the tricky stages.
We all have innate talents or interests. Some of us are lucky enough to discover these early in our lives and pursue them as hobbies or “passion projects” through the years. Others get caught up in day-to-day life and forget to make time for interests outside of work, kids, etc.
We now know that passion projects are thoroughly beneficial for our wellbeing. Apart from being super satisfying, it also promotes creativity and innovative thinking. Pursuing any passion project will give you a sense of purpose and will help you feel like you’re living life to the fullest.
To help you find your passion project, start with listing ideas that interest you, whether that’s fitness, food, finance…whatever! Then consider how much time and resources you can commit to it. Schedule the time to pursue your project into every day/week/month and set a goal to work towards. Remember, this is about investing the time for you to work on something you love, so there doesn’t really have to be an outcome other than enjoying the flow state. But you never know, one day you might end up making it a side hustle.
At Capital Properties we believe that it’s our moral responsibility to help combat climate change. Making small, but intentional changes will make all the difference to our future and our kids and grandkids future. After all, if we want our communities to thrive, we must ensure that nature thrives as well.
We’re not going to tell you to run away and join Greenpeace, but there’s a huge amount of satisfaction in developing an eco-friendly mindset and knowing you’re doing the right thing by the planet. It’s as simple as choosing to use eco-friendly products where you can, avoid plastic, minimise food waste, buy less crap, teach your kids to turn off the taps, use LED lights and plant a few trees. And take on board our suggestion to use solar energy in our blog “To solar or not to solar, that is the question”. You’ll see that being good to the planet also has advantages for the savvy investor!
We’ve suggested these “lifestyle investments” to help you make the very most of your one and precious life. But it would be remiss of us not to talk about planning for your financial future. And let’s face it, in Australia is the very best way to plan for your future financial security is by investing in property.
Property investment continues to deliver consistent capital growth over time and is far less volatile than investing in shares or cryptocurrencies. Property investors benefit from tax deductions and exemptions from the Australian Tax Office, including corporate fees and charges, advertising costs and rates reductions from the council, insurance and land taxes.
Buying-to-let means you’ll receive a monthly rental income while the home appreciates, giving you significant capital gains when you’ll need it most, in retirement.
If you want to talk about securing your financial future, we’ll help get you on your way with a free Capital Properties discovery session. And if you’re already onboard, our Pinnacle Support Program will keep you moving in the right direction.
As always, our free investor tools are available to help you with your property investment journey: Online property investment toolkit | Book Your Pinnacle Program Review | Property Investor – Self Evaluation
How important is the finance component to the property buying process?
In fact, aside from choosing the right property, in the right location, finance is the most important component to property investment. So, it’s essential to get it right.
But nobody’s born knowing this stuff. And many financial institutions seem to love making the process harder than necessary. That’s why the team at Capital Properties are passionate about helping Defence Force members improve their financial literacy and get started on their home-buying journey and/or increasing their property investment portfolio.
And because forewarned is forearmed we’ll break the process down here.
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Before you even think about browsing the property market, you’ve got to do some due diligence and nut out where you stand financially. We make this process really straightforward in the Capital Properties Discovery Session. In just one meeting we’ll help you collect all the information you need to provide to the finance broker/lender to work out your financial capacity.
We’ll work through a preliminary finance assessment form that details your assets, liabilities, income and investments which will help your Finance Broker to work out exactly what your borrowing power is. But that’s just step 1. We’ll talk you through all the stages you’ll face in a home-loan application here. It sure seems like a lot, but we promise you, doing it properly the first time is worth the effort in the long run.
LOAN PROCESSING STAGES
That means your passport, driver’s license, and/or state or territory-issued photo ID card such as a ‘Proof of Age Card’. If you can’t provide at least one of these primary IDs, then you’ll need to present two forms of secondary ID such as: your birth certificate, Medicare card, tax assessment notice, citizenship certificate, utility bills with name and current address and/ or debit/credit cards.
If you’re currently self-employed, you’ll need to go back even further! The lender will want your last two years personal and business tax returns and Australian Taxation Office (ATO) assessments. As well as the last two consecutive years’ profit and loss from your business.
If you receive a government income, they’ll need to see a letter from Centrelink confirming your benefits.
The lender will also need to see evidence of any other sources of income, such as:
As well as the above sources of income, you’ll also need to provide details of any assets you hold. That includes savings (you’ll need to show them your bank account), any vehicles that you own outright, share investment portfolio and your superannuation.
You’ll need to confess any outstanding debts, such as credit card balances and ongoing loan repayments.
Now that you’ve collated all the necessary paperwork, the next step is to get a clearer idea of how much you can borrow. This will allow you to narrow down your search for suitable properties and place you in a much stronger position when it comes to making an offer. We’ve explained why this is so important in “Why being finance ready pays dividends.”
Ideally, you’ll want to apply for AIP when you’re ready to commit to searching for your property. You’ll need to do your homework to choose a lender that offers a loan that suits you or discuss potential lenders with your finance broker. They’ll want to see all the supporting documents, confirmation of your deposit amount and an idea of the price range of the property you’re looking for.
Once you’ve submitted your application for AIP, the lender will complete a full credit assessment and responsible lending assessment, which includes details about where you’re looking to buy and the type and size of property you’re looking at.
Applying for AIP is free and usually lasts for 90 days once approved, assuming your circumstances haven’t changed in the meantime.
If your AIP has been issued by the lender, you’re ready to start property hunting! Yay! Just remember that if anything significant in your life changes, e.g., your income, employment type or expenses, you must advise the lender as it can affect how much you’ll be able to borrow. If you haven’t found a property or signed a contract within 90 days, you’ll need to re-apply for another AIP.
AIP doesn’t guarantee approval for a home loan. If the property that you want to buy doesn’t meet the lender’s loan-to-value requirements or you’ve had a change in your life that affects your financial situation, formal approval might be declined. So, it’s important to start moving towards applying for unconditional approval as soon as you’ve found the right property.
You’ll need to supply the ‘contract of sale’ or ‘offer and acceptance’ on the property and confirm that your financial situation hasn’t changed. They’ll also ask you to submit First Home-Owner Grant forms (if that applies). We’ve discussed everything you need to know about First Home Owner Grants in The Defence Force First Home Buyers Guide.
If you have more than a 20% deposit some lenders won’t require a physical property valuation before formally approving the loan. Many banks now use electronic valuation services like RP Data to confirm the property’s value. This blog post explains the process of valuations here in Australia: Desktop, kerbside & full property valuations – what’s what?
Conditional approval means that your lender has assessed and approved your loan based on the information they’ve already received. However, they may still impose restrictions or “conditions” before formally approving your home loan, so conditional approval is not a done deal.
This is often the last step for unconditional approval. Your lender will request a formal inspection of the property. That means that an independent property valuer will be appointed by the bank to physically visit the property and confirm its valuation. This valuation is then submitted with your loan for formal approval.
It’s time to celebrate! Formal, or “unconditional” approval of your home loan means that all your hard work has paid off and the lender has approved your home loan based on the property you’ve chosen to buy. Although you’re not completely done just yet, just a few more steps before you can call that house yours!
Your lender will now send you confirmation of your loan – or your ‘mortgage documents’, to read, sign and return. These will include:
As conditional approvals are only valid for a few months, it’s vital to get them signed and returned to your lender as soon as possible to allow you to settle on your new property. Once your lender has received your signed mortgage documents the next step will be the settlement process.
Settlement means you’re ready to transfer ownership of the property from the seller across to you, the buyer. Your solicitor /conveyancer will agree on a date, place and time of settlement. Two weeks before that date your solicitor will prepare a ‘Transfer of Land’ document for you to sign. This will then be registered at the State/Territory Land Registry Office on your behalf.
As well as the exact time of settlement, your solicitor/conveyancer will confirm the amount of funds that you’ll be required to provide. The funds need to be in your account at least a few days before settlement.
As soon as settlement has taken place, your solicitor/conveyancer will confirm by sending you a ‘Statement of Adjustment’ to confirm that funds have been paid. Now you can arrange to pick up your keys from the real estate agent and give yourself a pat on the back! You’ve just bought yourself a house!
In the unlikely event that there’s a problem with the deal and it can’t proceed, (for example in case of a fraudulent representation), the deal will be automatically archived after 2 weeks.
Although it seems like a lot, understanding this process will make buying a property so much easier. So, well done! If you’ve made it this far, you’re already ahead of the game. The reality is managing the finance component of buying a property is one of the most stressful events many of us will undertake in our lives.
That’s why we’re happy to lend you a helping hand to get you through the process. We’ll get you up to speed with our Capital Properties Discovery Session before you apply for a loan and help you clear any hurdles along the way.
Our Pinnacle Support Program will support you in finding out more. While you’re here, you can also check out our free investor tools: Online property investment toolkit | Book Your Pinnacle Program Review | Property Investor – Self Evaluation
Guest Blogger: Brian Beck | Mortgage and Financial Consultant
Free investor tools: Online property investment toolkit | Need to get a pre-approval underway?
Question: What does a sea change, tree change and smashed avo have in common?
Answer: A bloke by the name of Bernard Salt.
Question: Is it important to understand and interpret demographic data when purchasing property?
Question: Are the 2 questions above in any way related?
Answer: Absolutely. And if you’re interested in property investment you might already know why. If not, let us tell you about Bernard Salt and his influence on how we determine demographic data.
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Bernard Salt is a “speaker, a business advisor and a media commentator who is perhaps best known to the wider community for identifying and tagging new tribes and social behaviours such as the “Seachange Shift” and the “Man Drought”. He was also responsible for popularising smashed avocados… globally.”*
In other words, Bernard is a master of creating a story from data and identifying popular culture shifts that have occurred in Australia over the last 150 or so years. In fact, when we summarise Australian geographic and demographic culture, we can thank Bernard for identifying 3 prominent cultures.
The Australian demographic stories
Bernard tells us that in 19th century Australia there was a “bush culture”, where people yearned to live in rural ‘bush’ spaces. Then the data shows that a shift occurred in the 20th century where people sought out a “city / suburban culture”. And, later, in modern times, (i.e. the 21st century), us Aussies began to seek a “lifestyle culture”.
Today, Australians favour an urban lifestyle over regional / bush living. The culture that’s emerged over the last 30 years or so is a natural evolution of the Australian golden era of “beach / lifestyle culture”. The Australian dream of living by the beach is at an all-time high. Just look at the booming population migration to Coffs Harbour, The Gold & Sunshine Coasts and the Melbourne Peninsulas. Suburbs are shifting from city-bound to beach-side. And it’s the pursuit of lifestyle that connects suburbia and the beach. We’ve spoken about this trend before in this blog: “The great interstate migrate”.
Demographics and property investment
An essential question to ask if you’re considering purchasing a property, either to live in or invest, is: What’s the motivating force behind the average Australian’s housing requirements?
In the not-too-distant past Australians migrated away from the city, believing that suburban living offered a better lifestyle than living in a busy, congested concrete jungle. Access to cars and better public transport made travel manageable, and the extra space afforded in suburbia allowed for more room to raise children and signalled a greater opportunity for success.
But we’re in the midst of yet another demographic shift right now. More than ever before, Australians are choosing to move to the coast to pursue the full sea change experience. And it’s vital to acknowledge what that means for the current market before investing in property.
What to consider before investing
When you’re looking for an investment opportunity, it’s vital to consider what’s happening in the market and what’s motivating to people buy and sell. We’ve written about investment trends before in our blog posts “Why interstate investment is so hot right now”. Because, at Capital Properties, we’re continually assessing what’s really motivating Australians. What’s enhancing or embellishing sales?
Right now, it’s lifestyle.
For the average Aussie, the biggest driver and motivator for buying property is the pursuit of a better lifestyle. The aspirational culture of living by the beach with access to the amenities required for modern living (i.e. healthcare, schools, retail and hospitality, etc) is absolutely trending.
Even our homes are reflecting this switch to lifestyle. Our ‘lifestyle’ havens in suburbia or on the beach now require seamless indoor/outdoor living, work-from-home spaces, and entertainment rooms. Houses are no longer just a roof over our heads.
Projecting future trends
So, we know what buyers are looking for right now, but as property investors, we also need to make predictions for the future.
Before we purchase a property, we must get used to taking a long-term view of why this will be a good investment over the next 30 years or more. We need to ask the question of how it might contribute to the ideal Australian lifestyle in 2030 or 2040, which is when you’ll want to sell the property.
Look to the past
In looking to the future, we must also consider the past. How has Australian culture changed over recent decades and how will these ongoing changes affect your decision-making process for buying property now and in the future?
Australia is a multicultural country. Made more so by a significant cultural shift in the 70’s & 80’s when many Greek and Italian families migrated from Europe. Their arrival and subsequent prosperity directly influenced modern building design in Australia. And their legacy continued to change how Australians live today. I’ll explain why.
How European migration in the 70s still affects the way we live
The newly immigrated European parents came from world of limited opportunities. They arrived in Australia with dreams of making the world a safer, more prosperous place for their kids. They had a fierce work ethic, sometimes working 2 – 3 jobs so they could send their kids to school, and build businesses for them to work in. A tireless effort to ensure their kids would have a greater opportunity in life. This toil resulted in a social contract with parents and their kids. The kids of that generation understood that in return, they must make their parents proud by exceeding at school and pursuing successful careers.
And so, we saw that homes started to change in the 70’s and 80’s. Indoor-outdoor living became popular, and houses were built or modified to demonstrate success to the outside world – or just the nosy neighbours! For example, a typical suburban home of 3 bedrooms and 1 bathroom would position the living room at the back of the house. The idea was that the homeowner would take their guests through the house with bedroom doors intentionally left open so that the guests might notice the many pillows and the sumptuous styling that showcased their new-found prosperity. Then the guests would gather around an island bench in the kitchen to dine on the latest dishes from the Women’s Weekly, or saunter outside to gardens that might have reminded them of ‘home’.
Lifestyle influences design
So, this consequence of greater prosperity and the cultural influence of the proud Mediterranean homeowners impacted Australian house design to influence the style of homes we live in even now. We can certainly thank them for the ever-popular indoor-outdoor design or ‘alfresco’ living we’ve come to love and our ever-evolving aspiration for ‘lifestyle’ living.
Today we’ll still find that style of house across Australia, from Point Piper in Sydney to the suburbs of Gympie in Queensland. And that’s because us Australians still recognise the importance of comfortable homes to provide a better lifestyle for ourselves and our families. And right now, the Australian dream is living by the beach. Hence the emergence of the super charged coastal property boom.
So, what’s next?
That’s the million-dollar question that we daresay even Bernard Salt can’t quite commit an answer to. Especially in the wake of a global pandemic. But like him, we keep our fingers on the pulse of each new demographic shift in Australia (and beyond). For example, we’re predicting an even larger shift towards eco-friendly builds and green energy. We’ve written about some of these trends before in “To solar or not to solar, that is the question”. And we make it our mission to keep you informed with each change and each opportunity.
We’d love to help you get started with a free Capital Properties discovery session. And our Pinnacle Support Program will keep you informed of everything you need to know to make informed property investment decisions.
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