Your Trusted Adviser
Wouldn’t it be great to know you
can trust your mortgage adviser
to give you the best advice and
steer you down the right path?
Well you can! Here’s why…
We are licensed
The mortgage industry is regulated
by the industry bodies MFAA and
FBAA, with a Code of Practice
that requires high professional
standards, fair business practices,
ethical behaviour and compliance
with laws and regulations.
New national regulation for the credit
industry, including mortgage advisers,
commenced in July 2010 (known as the
National Consumer Credit Protection
Act), bringing the regulation of
residential investment property under
the control of ASIC (Australian Securities
and Investments Commission).
By law mortgage advisers have
to practice “responsible lending”,
which means extending credit that is
unsuitable to the needs and financial
capacity of the consumer is an offence.
We are honest
It’s standard industry practice for
mortgage advisers to be remunerated
by lenders and receive commission
on the loans we settle. This puts us in
the position to be able to negotiate
with a range of lenders
and mortgage providers
on your behalf to find the
best situation for you.
We are up front about the
fees associated with our
service and we will happily
provide client testimonials.
MARCH /APR IL 2013
We offer top notch advice,
service and support
It is our job to advise, educate and help
you to meet your financial needs.
We are well versed in financial services,
have years of market experience and
a wealth of market knowledge.
It is early days but the signs are good for this year’s
property market. Low interest rates, improving
rental returns and potential rises in home prices have
attracted buyers to make a comeback – see article
below.
Combined with this expertise is the
personal commitment we make to our
clients to listen and respond to their
needs. We care about our clients and
thrive on keeping you happy and being
available when you need us most.
We recently had a client who told
us “your enthusiasm for constantly
keeping in touch and updating us on
the market and possible providers has
made us feel comfortable and confident
about making our next purchase.”
On page 3 we profile the rising popularity of self-managed super funds (SMSFs) and
the growing number of people using super to invest in property. The funds held in
SMSFs now exceed those held in either retail, industry, corporate or the public sector.
Self Managed
Super: a growing
trend
Your Trusted
Adviser
Buyers Make a Comeback
While many buyers kept out of the
property market in 2012, there are signs
of a comeback.
2012 saw many buyers adopt a ‘wait and
see’ attitude, but they are once again
becoming active as the market starts
to stabilise and interest rate reductions
lower the cost of ownership.
Money Simplicity
23 Milton Parade
Malvern Vic 3144
Join us...
The right time
Enjoy this newsletter and feel free to pass it on to family and friends.
It’s feedback like this – from a
happy client – that reminds us why
we became mortgage advisers
and why we love our job!
Buyers Make a
Comeback
Does this mean the time is right for you to enter the
property market? On page 2 we look at the issue of
timing and discuss whether buying at the right time
of the property cycle is an important consideration.
Lastly we discuss the importance of having access to a ‘trusted adviser’ and why we are
qualified to fill these boots.
DISCLAIMER: This newsletter is intended to provide general news and information only.
Readers should rely on their own enquiries before making any decisions touching their own interests.
Please do not rely on any part of this newsletter as a substitute for specific legal or financial advise.
With compliments
NE WSLE T T ER
t
03 9832 0802
f
03 9832 0803
e
[email protected]
w
www.moneysimplicity.com.au
Four cash rate cuts by the Reserve Bank
during the course of last year have
meant that the rate now sits at a historic
low of three per cent. The combination
of low interest rates, improving rental
returns and potential rises in home
prices is tweaking buyer interest. The
strength of the share market and relative
economic calm overseas is also helping.
RP Data’s Tim Lawless is among the analysts
who believe house prices will make a
modest recovery during the year ahead,
driven primarily by low interest rates.
Chief economist at the Housing
Industry Association, Harley Dale, also
says he expects to see “some modest
growth” on buying prices in 2013.
Property expert, John McGrath, predicts
residential market price rises of 5-10 per
cent. He also says: “rents will continue
to climb due to the housing shortage,
providing investors with increasing
yields over the next few years.”
Many agree that the recovery will be gradual
and is likely to vary from city to city and even
suburb to suburb according to demand.
We are members of the Mortgage & Finance Association of Australia (MFAA),
the peak industry body.
All members are bound by a strict code of ethics to ensure the highest levels of
service, integrity and professionalism.
The
Right
Time
Predicting the perfect time to buy
is difficult, even for the experts, yet
many investors get caught in the
fear of buying at the ‘wrong time’.
The truth is that when to buy is not
nearly as important as actually buying a
property, particularly if you are planning
to hold onto it long term. As long as
you are prepared to keep your property
through the good times and the bad, you
needn’t worry too much about temporary
shifts in prices because it is still likely to
end up being profitable in the end.
If there’s a timing issue that’s important,
it’s getting your personal timing right: are
your finances ready, do you have a plan...
Do you have a plan?
Book
Review
Write down your goals for property
investment – do you want to become a
landlord or would you rather renovate
and sell properties? Do you want a
positive cash flow property, a high
capital growth property or a balanced
investment?
Self Managed Super:
A Growing Trend
Be clear on what you are seeking
to achieve and what type of
property fits your strategy.
Are your finances ready?
Your finances should be in place before
you go shopping for a property. As
your mortgage adviser we can help
ensure your finances stack up, which
will narrow down the most suitable
areas for your research efforts.
Have you researched?
As an investor you need to use statistics
to not only find the right suburb but also
the right property within the suburb.
Look for areas with low vacancy rates,
broad buyer and tenant appeal, high
employment and good transport links.
Are your emotionally ready?
You need to be prepared to put your
emotions aside and think like an investor,
not a home owner. The property you
buy doesn’t need to be one you love,
or even particularly like, as long as it
meets the needs of the rental market.
You also need to be detached enough to
walk away from the property if the deal
doesn’t work out the way you wanted.
Are you prepared for risk?
Events such as a major repair,
employment change, extended sickness
or sudden interest rate rise could put
you in an uncomfortable financial
situation. Make sure you are ready
for the ups and downs of investing to
ensure that your journey as a property
investor is a long and profitable one.
Have you sought good advice?
By talking to experts you will be able
to avoid many of the pitfalls that
inexperienced investors encounter.
As your mortgage adviser we can
help guide you through the property
investment process and refer you
to expert advice where required.
Financial Management:
Theory & Practice
Lenders continue to launch new loan
products to cater for the soaring
popularity of self-managed super
funds (SMSFs).
With many of the features of regular
home loans, these products entitle
trustees to borrow within their SMSF
to buy residential investment property
or refinance an existing SMSF loan. The
loans are repaid from rental incomes and
contributions paid into the funds.
Since the laws were changed in 2007
to allow SMSFs to borrow funds to
acquire residential property, this type
of property transaction has become
increasingly popular. Currently more
than 800,000 Australians invest around
$280 billion of superannuation through
the SMSF structure and this is a trend
that is expected to accelerate. SMSFs
make up around one-third of the overall
superannuation sector and have an asset
value of $14.87 billion.
One of the many attractions of a SMSF is
that is puts you in the driving seat and
allows you to do something pro-active
about your financial future. As the trustee
of the fund, within the boundaries of the
law, you have the flexibility to decide how
your funds are invested and how the fund
is to operate. Unlike the ups and downs
of the share market, property investment
provides the security of yielding positive
returns for investors, especially if it is a
long term investment.
Better tax management is another
attraction as investing in an SMSF has
numerous tax advantages. There is also
the ability to pool funds with up to four
members, which means family members
can pool their savings to buy a property
that would otherwise be beyond their
reach.
Did
you
know?
Data from the Australian Taxation Office
shows that more than 3,000 SMSFs are
set up every month and that the sector
is growing at a rate of 10% a year. In the
four years to 30 June 2012, the SMSF
sector grew by $109 billion, which makes
it the strongest growing sector of the
superannuation industry.
The statistics show that SMSFs have truly
positioned themselves as one of the most
popular forms of superannuation savings.
If you are tempted to join this growing
trend, speak to us today about how we
can help you set up your own SMSF.
•
The largest proportion of SMSF funds
have existed for over 10 years, with
over 90% of funds established in the
10 years to 2011 still in existence.
•
In the four years to 30 June
2012 SMSF numbers grew from
almost 376,000 to over 478,000
– a growth of over 27%.
•
At 30 June 2012, 84% of SMSF
members were 45 years old or
over. The ages of members in
more recently established SMSFs
are generally younger. Of SMSFs
established in 2011, almost 62% of
members were under 55 years old.
•
SMSFs included $10.83 billion
worth of assets in residential
property in June 2008, rising to
$14.87 billion by March 2012.
Stats: Australian Taxation Office,
30 June 2012
By Michael C. Ehrhardt & Eugene F. Brigham
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MARCH/APRIL 2013 NEWSLE T TER
MARCH/APRIL 2013 NEWSLE T TER