LEASING PERSONALLOANS

PLANT &EQUIPMENTHOME LOANS COMMERCIAL INSURANCE INVESTMENTS CASHFLOW

www.monopolyfinance.com.au

With 2016 on the horizon, are you thinking‘new year, new property investment’? Ifyou’re considering expanding your portfolio,you’ll likely be weighing up the benefits ofpurchasing a new asset ‘off the plan’ versusacquiring an existing residence. While theconcept of spending hundreds of thousandsof dollars on a property you can’t physicallysee is daunting, purchasing property ‘off theplan’ can offer landlords substantialbenefits. Although not the perfect fit forevery investor, buying ‘off the plan’ is idealfor landlords who are dispassionate abouttheir properties – making their buyingdecisions based on their knowledge ofexpected rental return, capital growth andthe tax benefits of depreciation schedules.The ‘off the plan’ investor is likely to haveless emotional attachment towards theirproperties than the owner-occupier, beingfocussed on the potential financial rewardsrather than the aesthetics or position oftheir asset.

Think ‘off the plan’ is for you? Next time yousee a suitable development, ‘get in’ on itearly! Being an early purchaser means beingable to choose the best property to buy in adevelopment, and can occasionally mean alower purchase price, too - as developerslook to draw buyer interest by boasting howmany of their properties have already sold.Also, the earlier you purchase means the

longer your property hasto enjoy market growthbefore settlement -which means you’reostensibly paying today’sprice for tomorrow’sequity. There are alsosubstantial governmentincentives for investorsbuying brand newproperties, namely stampduty concessions. Youmay also be able to claimdepreciation for the agingof fixtures and fittings inyour brand-newinvestment property –your accountant will assist you source adepreciation schedule specific to your assetwhich can improve your overall tax position.Aside from the initial financial benefits ofbuying ‘off-the-plan’, new properties alsobenefit from a seven year builders’guarantee. Any structural or interior faultswhich develop within this timeframe are theresponsibility of the builder, not the landlord– resulting in substantial peace of mind forinvestors and added value for potentialpurchasers if you sell within seven years.

Before jumping into an ‘off-the-plan’purchase, there are other factors to consider.While the notion of ‘today’s price,

tomorrow’s equity’ sounds great in abooming market, there is always a risk thattomorrow’s equity won’t have grown. Also,make sure you understand your rightsshould the development fall over. Weigh upthe benefit of stamp duty savings, too – areyou paying an inflated price for a newproperty instead of paying your taxes?Stamp duty savings are attractive, but theyshouldn’t come at the cost of payingover-the-odds for a property. Crucially,consult with your property manager toascertain the potential rental income fromany new investment – whether‘off-the-plan’ or existing. We’re always hereto help with our professional advice!

Buying an investment property“Off-the-Plan” – should you do it?

November / December 2015

Important note: Readers should not rely solely on the content of this newsletter. All endeavours are made to ensure the content is current andaccurate however, we make no representations or warranties as to the accuracy, reliability, completeness, or currency of the content. Readersshould seek their own independent professional advice before making any decisions based on the information contained herein.

MonopolyFinance Pty LtdAustralian Credit Licence No: 387784

Wladek CostabirB.Sc., G.Dip. Mgmt, Dip. Fin

Suite 7a, 82 Keilor RdEssendon VIC 3040Mob: 0419 650 750Ph: 1300 763 630email: office@monopolyfinance.com.auweb: monopolyfinance.com.au

Some of our lenders include

LEASING

HOME LOANS

COMMERCIALFINANCE

PLANT &EQUIPMENT

Our business is built on referrals and we would welcome the opportunity to assist any of your family or friends, also with their finance.

PERSONALLOANS

TimingthemarketGiven Australia’s historicallylow national cash rate, it’s arobust time for the propertymarket – presenting idealconditions for propertyinvestment and the chance forfirst time buyers to ‘get in’ at alow interest rate, too.

Many looking to buy property –either as owner-occupiers orinvestors – might be sitting onthe fence and waiting for themarket to lean more favourablytowards their position.

While some investors believeit’s not timing the market, it’sthe time you’re in the marketthat’s important, others arededicated to a counter-cyclicalstrategy.

Buying when the market is low,these investors look toleverage growth over a limitedtimeframe, selling whendemand soars. Confused yet?

Speculation surrounding thenext interest rate increase (ordip) makes it extremely difficultto know when is ‘go time’ foryou.

Ultimately, it’s essential toassess your own situation -both financially and personally- before taking on new debt.

If you’re an investor, somestrategic buying and sellingmight play to your advantage -but wait too long and your plancould backfire. In any case,now’s the time to consult withyour broker and put a plan inplace to play the market, yourway.

Just add equity:improving yourasset’s valueWhen it comes to selling or refinancing your property, your aimis to enhance the value of your asset to its maximum. Improvingyour home in simple ways can help attract more interest fromthe market, allowing you to command a higher price or strongervaluation.

The zones that benefit most from cosmetic renovation are the‘wet areas’: a well-appointed, modern and clean kitchen is adrawcard when it comes to inspections, as are fresh bathrooms– with old, tatty bathrooms devaluing a residence substantially.Maximising natural light throughout the home and installingappropriate lighting can also improve the atmosphere of theproperty – with dark, dingy properties putting off buyers quickly.Knocking down non-weight bearing walls can often give a feel ofspaciousness and abundance, too. Opt for large, open-plan livingand dining spaces to attract the most interest. Ducted heatingand cooling systems can also add value, allowing your propertyto compete against others with less attractive features.

Making changes to your property can be costly, so be sure toweigh up the potential increase in equity, sale value or rentalyield before beginning any project.

November / December 2015