Melbourne and Sydney record the highest dwelling value increases over the Month of August

16th Sept 2016

According to CoreLogic latest data, property values continue to rise in six out of eight capital cities in the month of August.  Melbourne and Sydney have seen the most movement in dwelling prices, recording an increase of more than 1% month on month.  Since June 2012 to date, Sydney has recorded  64% cumulative growth and 44% in Melbourne.  Brisbane over the same cycle period has the third highest rate of capital growth, recording 18% and Darwin over the same period was 4%.  Perth and Darwin recorded a fall in values over the last twelve months both recording a fall of 4.2%.

CoreLogic head of research Tim Lawless said, “Despite a strong month-on-month reading, the pace of annual capital gains has trended lower compared with the 2015 peak in growth conditions, when capital city dwelling values were rising at 11.1% per annum.” 

Over the most recent twelve months we have seen dwelling values rise by a slower rate of 7% growth.  Property values in select markets are still trending well, with interest rates at record lows, there is a pick up in first home buyers and investor market. 

“Cash Flow Positive Property Investment Strategy”

What is a Dual Key Occupancy Property?

A dual key occupancy property is a great way to achieve a cash flow positive position, without having the risk of investing in regional markets like mining towns.  Investors today are seeking ways to invest in property that can build a passive income and not effect their lifestyle.  A dual key occupancy property is for example, a 5 bedroom, 3 bathroom home constructed on one title.   This property can be divided by a common wall to create two living areas that can be rented out to separate tenancies.  This allows investors to supercharge rental returns and become cash flow positive from day one.

Advantages of a Dual Key Occupancy Property

• Cash flow positive from day one
• Additional depreciation and tax deductions comparative to a standard new home
• One land title, so only one lot of land & water rates
• Dual rental income;  if one tenancy becomes vacant the other tenancy still provides rental income to support the mortgage 
• Better servicing with the banks as they will take into account about 80% of the rent as income, great for lower income earners to build a sizable property portfolio
• Combined dual rental incomes can range from $30,000- $40,000pa, can be cash flow positive $100 – $150 a week after tax depending on specific property and personal financial circumstances
• Can be built in high growth locations
• Affordable rent for tenants

Disadvantages of a Dual Key Occupancy Property

• The dwelling cant be sub-divided and sold off separately, its not a duplex 
• Can’t construct them in all areas, council approval is required 
• More expensive to build than a standard home
• Not all builders build them

• Need to have a block size generally over 450m2, depending on local council requirements

Is this strategy suitable for you?

Investing in property is never a one size fits all mentality, you should always seek professional help to ensure your property strategy is aligned with your financial goals.  At Curtis Property Group we assist all our clients to develop a personal wealth strategy before purchasing any property.

If you would like to find out if this particular strategy is suited to your circumstances, give our office a call and book your complimentary strategy meeting today.

CEO Wade Curtis has posted a video on “Dual Key Occupancy Property” on our facebook page,  get across and check it out!

Wednesday 10th Aug 2016

Out of the top 25 suburbs with the highest median house prices, there were only two outside of NSW, one in Western Australia ( Peppermint Grove)  and one in Victoria (Toorak). 

Suburbs with a median value of at least $1 million, as at June each year

Monday 1st Aug 2016

The A grade strategy savvy property investors use to pay down home mortgage debt faster.

If you are holding a mortgage on your own home and are not using an “OFFSET ACCOUNT” you are more than likely paying hundreds of thousands of dollars extra in interest payments over the term of the loan. What could you do with for example, an extra $200,000 in savings over the term of the loan?

What is an Offset Account?

What we often see when we initially meet with our clients, is that very few do not have a debt reduction strategy to pay off their home mortgage quicker.

This is a strategy that savvy property investors use and one that the banks won’t tell you about when you take out your mortgage – This is when you require a knowledgeable and well experienced finance broker on your team!

An offset account is essentially a savings account directly attached to your home loan account which means any funds you have sitting in this account at any one time will reduce the interest payable on your home loan, paying off your loan faster without making any extra repayments.

Example on How it Works:

If for example you have a $450,000 mortgage and you have an offset facility set up with say, $20,000 dollars in savings in it, this would mean that you would be only paying interest on $430,000 reducing your interest which is calculated daily.

On top of this you have your salary of say $8,000 dollars per month going into your offset account, only then are you paying interest on $422,000. To truly benefit from this strategy, you then get a credit card with 55 days interest free, to pay all your monthly expenses, bills etc, and then pay the credit card off in its entirety before the end of the 55 days interest free period. This allows you to use your salary and savings to remain in your account for as long as possible, reducing daily interest charges. This debt reduction strategy is using the banks money to pay off your home loan faster, without making any additional repayments. It can save you hundreds of thousands of dollars and knock years off your loan term.

Is This You?

What I often come across is that mortgage owners have separate savings accounts for different things that they put money aside for each week – e.g School fees, holidays, car rego etc. They would be earning very little or zero interest on that money in a standard savings account. If however, they put it all into the offset account to their home loan it would be saving them circa 5% in interest and if interest rates do rise in the future it would be saving them even more. Its all about working smarter with your money and not harder for it!

Are you maximising your cash flow? The team at Curtis Property Group can provide the education and ongoing support that is required to reach your financial goals. Get in touch today for your complimentary review by clicking on the links or call Wade Curtis directly on 0438 206 446 www.curtispropertygroup.com.au

The information provided is of general in nature and not to be taken as financial advice. We recommend you seek independent professional and legal advice before employing any such strategies to ensure they are suited for your personal circumstances.

Tuesday 21st June 2016

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