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One of the best ways to make buying a property more affordable is to buy it with another person. Your partner, a sibling, a friend, a parent etc. and with that, there are several important things for you to consider.

Type of ownership

When you choose to buy a property with another person or several people there are two options.

Joint tenants – as owners you own the whole of the property together and is generally used for couples. The right of survivorship applies so that if one owner passes the ownership is transferred to the surviving owner.

Tenants in common – shares in the property can be equal or unequal in size. If any of the tenants was to pass away the share is to be dealt with as part of that individual’s will and estate.

Foreign owners

When you are buying a property and one or more of the buyers are foreign you need to apply to the Foreign Investment Review Board for approval. When the purchase is as tenants in common then application fees and a foreign surcharge duty may be payable. If you are buying with your spouse then the circumstances change as you will be joint tenants. Ensure you have professional advice based on your circumstance.

Taxation

When you are investing in property with another person is wise to get tax advice. Getting tax advice first ensures that you are maximising any future tax deductions relevant to the property when it is an investment. Only your taxation professionals can provide advice as they know your circumstances.

Legal agreement

If you choose to buy a property as tenants in common with another person it is smart to create a simple legal agreement. This legal agreement can cover the rights and obligations of each of the owners of the property.

So, should you buy a property with another person

When you are buying a property it is important to look after yourself legally and financially. If you would like specific advice tailored to your circumstance please contact Select Conveyancing Lane Cove. 

Note: Every circumstance is different so this article is only general information not specific to any one purchase.

If you have owned your home for a little while, chances are you now have equity. You can use this equity for many things including buying a bigger home.

Equity = The difference between the value of your home and the balance of your mortgage. eg. If your home is valued at $1.5 million and you owe $600k you have $900k in equity. 

Make sure you seek independent advice before making any decisions about your equity.

Ways to use the equity

Sell – You can sell your home and use that money to buy your next property. Upsize to a larger home or to another location to suit your family.

Keep – Keep your home as an investment and use the equity to provide a deposit for your new home. Rent out your original home to pay back the mortgage of the 1st home.

Keep – Use your equity to buy an investment property. You won’t have to move but you can still grow your property wealth.

Renovate – Borrow additional money to renovate and increase the value of your current home using the equity.

Check your numbers

Selling or keeping the banks will still evaluate your ability to pay back any mortgage you have. They will look at your expenses and the potential income you may have if you keep your property as an investment.

Know your own budget and down get too carried away with what you are planning.

Utilise professionals

Financial advisors, mortgage brokers, conveyancers and more all can help you ensure that you know the costs involved in what you are planning.

You don’t have to move

If you love where you live then renovate make your home better or use the equity to buy an investment property. Do what is going to work for your family and your circumstances, there are no set rules. Equity just gives you the freedom of a few more choices.

Naturally, if you are buying or selling we would love to help, contact Select Conveyancing today.

If you are fortunate to have an investment property, landlords insurance is a must-have.

Having landlords insurance is not a just in case you get the ‘tenant for hell’. Or your tenant decides to vandalise your property and leave you with a large damage bill. This is just part of the reasons you need it.

Freestanding house – If you have a freestanding house that you are renting out you will need landlords building and contents insurance.

Strata Title property – If you have a strata title property then you need landlords contents insurance as the strata insurance covers the building.

Damage

• Extreme weather can cause flooding to your property
• A tree may fall onto your property
• There may be a fire at your property
• Earthquake or storm damage
• A tenant leaves without notice and rent owing (rental default coverage)
• Faulty wiring or plumbing causing an injury
• Burst water pipes
• etc…

Coverage

Speaking to your insurance broker or insurance provider you can ensure that you are covered for everything you need or want to be covered for. Curtains, blinds, carpets, kitchens and bathrooms are all expensive to replace and a simple burst pipe can damage all these items. Unpaid rent, the need for your tenant to be rehoused and more can all be a part of your insurance coverage.

It is vital that you have a valid lease in place and you have regular property inspections so that if you need to claim it will be accepted by your insurance company.

If you are thinking of buying or selling an investment property – contact Select Conveyancing for all your conveyancing needs.

Note: This article is not providing advice it is just a suggestion to speak to your insurance professional to ensure you have the coverage you need. Speak to your current provider or speak to an insurance broker to ensure you are covered.

The vast majority of Australians are choosing their home-based on their lifestyle.

So, if you are considering buying a property what are you taking into consideration?

According to a report by RealEstate.com.au about life in Australia, the number one consideration for people is safety.

9500 people were surveyed to find out that the five most important attributes Australians value include feeling safe (67%), high-quality health services (60%), affordable decent housing (58%), good job prospects (41%) and reliable and efficient public transport (33%). In Sydney however, these results were a little different with feeling safe (63%),  high-quality health services (57%), affordable decent housing (57%), reliable and efficient public transport (46%) and good job prospects (36%).  not to mention it came in at the 7th most livable city.

Buying a home is about the lifestyle

Once upon a time in Australia, the dream was about having your very own quarter acre block. It was deemed as being the great Australian dream, with houses only taking up a very small portion of the block, it was all about having a piece of land. Having a large garden where you could grow your own produce and have a lawn for the backyard cricket match.

Within Sydney, a block of this size is almost unheard of as most have been divided up to add more and more homes. The demand to live in Sydney remains high even though the report mentioned above rates is not as livable as other cities.

Without having a large plot for your home it is all about the lifestyle. Being close to schools, cafes and amenities outweigh the need for a large block of land, we are happy to settle for a courtyard space. All this nearby activity provides us with a feeling of community and a feeling of safety.

The news provides us with a constant report of suburbs and associated crimes rates which also helps buyers to choose an area that is deemed as safer than perhaps another. This constant reporting is much higher than it used to be so while crime rates are down, the reporting of crime is up. This reporting gives us all a perception that our lifestyle is in jeopardy. How do you feel?

Becoming a local

To enhance your lifestyle at your new home you want to become a local and discover the places to be and the things to do in your new neighbourhood.

• Go for a walk or a bike ride
• Take your children or fur children to a local park
• Chat with your neighbours
• Sample and then pick your local cafe
• Shop local
• Look for local events

So if you are looking to buy into a new suburb – how will you decide which one you choose?

Make sure you contact Select Conveyancing to ensure your purchase runs smoothly for the lifestyle you are looking for.

You have decided that you want to purchase a property. Should you use a mortgage broker or just contact one of the big banks or perhaps deep dive into Google and do all the research yourself? Do you even know what a mortgage broker does?

A mortgage broker

The most important thing to know is that a mortgage broker is working to find you the best lender based on your circumstances and needs. It is their speciality to go through your facts and figures and come up with one or several options that suit you. A mortgage broker will generally come to you and spend an hour or more understanding your needs so they can advise you.

From here that will assess your borrowing power and determine the amount that you will be able to borrow and can afford to borrow. They will help you to fill out the paperwork and submit your application for approval – yes they do the paperwork for you!

As a general rule, on average most mortgage brokers are accredited with more than 30 of the best lenders.

A mortgage broker is paid by the lender so there should be out of pocket for you.

What are the benefits

• Saving you time and money
• Knowledge to find you the best deal currently available
• Management of the paperwork to gain your preapproval
• Peace of mind that they are looking after everything that is required
• A mortgage broker is independent which means there is no favouritism to one lender
• The broker is accredited with 20 to 40 or more lenders to choose from

What you should ask

• Are they accredited and registered ASIC
• Have a credit license
• Association memberships are a bonus
• Find out how many accreditations they have so you have more choices
• Ask your friends and family for recommendations of people they have used
• Some brokers do charge fees so ask first
• If they are members of the Mortgage & Finance Association they are required to disclose their commission from the lender
• How much information they need from you so you can be prepared when you meet.

When you are ready to buy a property ensuring your finances are in order is the first step. You can then confidently search for and buy your property. At Select Conveyancing, we work directly with your lender to ensure the settlement of the property on the day of settlement.

We are in the era of homes being staged for sale. This is so they look their best for the buyer and it is easy to fall in love at an inspection. You walk into a house that just happens to be presented exactly as you have always dreamed and boom you are sold. However, if you are truly serious about buying this property you need to make some simple checks yourself.

It is this simple open for inspection checklist that can save you a lot of money in the future.

Check the following:

• Check the walls for signs of moisture.
• Check near showers and baths and their adjoining walls.
• Look inside the cabinets of the bathroom and kitchen for damp mould or mildew.
• Look over the bathrooms and bedrooms for mould and ask if it was recently cleaned or painted as this can disguise issues further.
• Check the walls for any large cracks, more than 2mm in width can be a major issue and should be checked further.
• Look for map cracking (looks like the lines of a map) on plaster as this may cause the plaster to come loose when you attempt to hang a fixture.
• Look over the ceiling for any sagging spots.
• View the roof lines from outside – are they nice and straight or are they dipping, if they are dipping this may be a costly repair.
• What do the gutters look like – Any rust or corrosion will need repair.
• Where do your downpipes run to – it should always run to the stormwater drains and not just the ground.
• Look around the property for any signs of previous flooding or water issues.

All these checks are fairly simple to do yourself. If you are happy you should then get a professional to asses the property and provide you with a report so you can have peace of mind with your purchase.

Make sure you contact Select Conveyancing to look after the contracts for your new property.

Planning to buy your first home can be the most exciting time. However, there are many things that you need to consider and think about as first home buyers that your parents did not have to worry about.

Banks are warier

Following the banking royal commission, it is important for banks to include more items in the lending process. For example, scrutinising potential buyers spending habits was not mandatory – now it is part of the lending process. Since 2017 it has been that much harder for everyone to borrow as lenders have become far more responsible.

TIP: Make sure your saving is consistent and your debt is minimal or non-existent.

Uber Eats & Afterpay

We all love the convenience of getting our meals delivered and it is very easy to do this every other night. You should know that your lender may look right through all the transaction on your account and see a pattern of spending.

TIP: Calculate the approximate payments of your future home loan. If this is going to be $600 per week you should be saving this amount each week to demonstrate your ability to meet the requirements. And if you are renting and paying $450 per week then you should be saving the other $150 each week.

Remember that Afterpay is a debt and an ongoing debt if you are a regular user of this facility. It is another expense that lenders are going to be closely reviewing when you apply for a loan. Debts include car loans, personal loans and Afterpay.

TIP: Remove any unnecessary subscriptions and regular payments and show that you are a frugal saver.

Buyers Market or Sellers Market

It is always best to buy low and sell high. Keep an eye on what the experts are saying about the market, do your own research. In a buyers market, you can often negotiate a good price for your property.

TIP: Remember that buying property is a longterm investment and buying in the right location at the right time can be amazing for your future.

Lenders

You don’t have to stick with one of the big banks – shop around and get a deal that suits your circumstances. Visiting a mortgage broker is great for this as they can look at many different lenders to get the best deal for you.

Incentives – There are still first home buyer incentives available through the government, ask your lender about this.

When you are ready to purchase speak to Select Conveyancing. 

This is almost an eternal question – Should you sell first and then buy or buy first and then sell?

Of course, there are no specific rules and everyone’s circumstances are different which leads to the actual answer being different for everyone. Buying first and selling second can potentially leave you with two mortgages. Selling first can leave you making a rushed purchase or needing to rent somewhere in between.

There is a third option – Settle on the same day. Serendipity… I hear you say. In a perfect world, the sale and purchase settle on the same day, paperwork exchanges without issue and all is well in the world. This however rarely happens and it mostly needs help to do so.

Here are some ideas to help you

Look at the market – In a rising market, it can be the perfect time to buy first and sell second. Buying at the start of the rise and selling at a higher price. Again you run the risk of not being able to settle and having a bridging mortgage or two mortgages. Also, there is a risk that you will accept a lower price as you become desperate to sell.

If there is a cooling market it is advised that you sell first and buy second. The pressure to accept a bad offer is reduced and you know exactly what you can afford to spend on your next purchase. However, you may find yourself renting if you can’t find the perfect property to buy.

Ask your agent – Working with one agent for the buying and selling increases your chances of buying and selling on the same day. Serendipity.

Extended settlements – By negotiating an extended settlement you increase the chances of a simultaneous settlement with your property’s. By negotiating 3 or 4 months you have the flexibility to work on getting the dates to match up. This can be tricky to agree to as the vendor may be in the same situation and need their own dates to work out.

Subject to completion – You can make an offer subject to completion. This means that your offer is only valid once your home is sold. While this reduces your risk it may not work for the vendor.

Bridging finance – Buying first and not selling your home will lead you to bridging finance. Typically interest only it is a loan on top of your existing home loan.

Conclusion

Make sure you do your research and decide on what will work for you. Contact us for your conveyancing needs and discuss how we can work with you to get your property settlements to occur on the same day.