We had a representative from CBA in our office the other day who mentioned an interesting statistic; only 10% or so of the approvals they’re currently doing are for people purchasing property outright, including first home buyers, upgraders and investors.
So what’s the other 90% of their home loan business consist of? Refinancing of course. Yes, there’s a swag of borrowers out there who are fed up with their current lender and are ready to jump ship for a better deal.
While we’re not complaining about the refinancing frenzy going on right now – it certainly keeps us busy! – we can’t help but admire some of the purchases that are coming across our desk of late. Quite simply, the deals are getting better by the day.
Now we’d be the first to concede that selling in today’s market probably isn’t the easiest thing to do, but if you have equity and are considering an additional property, now is a great time to make your move. We hope that this little snippet of where our clients are buying will inspire you to seek out one of the amazing opportunities that exist in this ideal buyer’s market.
Although we specialise in investor finance, we will also assist owner occupier’s too, so this month we thought we’d show you what a smart young couple have done in buying their first home. I think you’d agree they both have their heads screwed on the right way!
Settlement Date – 26th August 2011
Client – Local – Canberra
Purchase type – Initially Investment
Purchase price – $875,000
Transaction type – On Market
Suburb – Campbell ACT
Property Type – Four Bedroom, Double Garage, 2 bath + granny flat
Attributes – Campbell is a tightly held suburb in the parliamentary triangle and as such, this property will command an excellent rental in the short term of $760 per week for the house and $360 for the granny flat, representing a yield of 6.66%. The purchasers intend to renovate the property and tenant it for a year or so in order to claim back the land transfer duty, after which time they will move in themselves. After being passed in at auction, the house had been on the market for 6 months with the desperate vendors dropping their asking price by $50,000. Interestingly, the final purchase price was below the vendors’ reserve. Maybe the old saying – ‘Your first offer is usually the best offer’ is true after all?
Want to know more about claiming stamp duty on ACT investment properties? Call David Thomas on 1300 657 132.
Settlement Date – 16th September 2011
Client – Blackburn North – VIC
Purchase Type – Initially Investment
Purchase Price – $770,000
Transaction Type – Auction
Suburb – Mitcham, VIC
Property Type – This older brick home on a substantial 910 m2 block was purchased primarily for its land value, as large blocks in this area are becoming increasingly rare – especially ones that boast great views over the Dandenong Ranges. It will initially be rented out to support the client’s debt while plans for a new dwelling are drafted and down the track, the old residence will be demolished to make way for their dream home.
Settlement Date – 2nd August 2011
Client – Hinchinbrook Sydney – NSW
Purchase Type – Investment
Purchase Price – $377,500 (asking $399,000)
Transaction Type – On Market
Suburb – Orange, NSW
Property Type – This newly built, brick veneer home with colourbond roof boasts 4 bedrooms, 2 bathrooms and a double garage under the roof line. It sits on a 622m2 block in the large rural town of Orange, which has a population exceeding 30,000. With a university built in the community during the 1970′s and the Cadia goldmine opening in the 1980′s, the local rental market has traditionally been fairly tight. Now, with the current resources boom in full swing, interstate mines have started poaching skilled workers from the region and running a fly-in-fly-out operation. This has put further pressure on the city, which is one of the reasons it has been enjoying some strong growth recently. This particular property was purchased with an exiting tenancy that currently returns $480 per week – a gross yield of 6.61%.
Settlement Date – 5th July 2011
Client – Interstate – Belmont North
Purchase type – Investment
Purchase price – $359,000
Transaction type – On Market
Suburb – Kotara, NSW
Property Type – This 3 bed house on the central coast of NSW was purchased from a deceased estate. The property was initially passed in at auction, however the clients managed to negotiate a good deal afterwards. Due to its state of disrepair, the purchasers spent $15,000 and 4 weeks making minor cosmetic improvements to the property, including replacing the carpets, patching holes, giving the walls a fresh coat of paint and updating the landscaping. Upon completion, the house was revalued at around $440,000 by a local agent and is currently fetching $420 per week in rent.
Settlement Date – 20th July 2011
Client – Local – Canberra
Purchase type – Investment
Purchase price – $599,000
Transaction type – On Market – Granny Flat Potential
Suburb – Kambah, ACT
Property Type – This four bedroom home with a 1 bedroom granny flat gives the owners an impressive total rental income of $800 per week, making it just on cash flow neutral before tax from day one. Although the house is in need of some cosmetic renovations, these will be scheduled for a later date as the property was snapped up by a Canberra based national company that required accommodation for some of their interstate staff. They were also nice enough to pay 6 months rent in advance to secure it.
Settlement Date – 14th July 2011
Client – Local – first home buyers
Purchase type – Owner Occupied
Purchase price – $252,000
Transaction type – On Market
Suburb – Coree, ACT
Property Type – Coree is 25 minutes out of Canberra’s CBD heading due west and unfortunately lost a number of homes in the 2003 bushfires. Today, many of them have been rebuilt and are now bigger and better, however a few older properties are still scattered throughout the suburb. This property is one of the bushfire survivors. It is an entry level, 3 bedroom home perched on an 800m2 block and although it requires a bit of TLC to the tune of around $15,000 (including new carpets, fresh paint and an updated septic) it’s structurally sound and represents a great stepping stone for these first home buyers who understand you need to walk before you run. Excellent buying given the median for Canberra is over $500,000 these days.
About the Author
Since 2008, David Thomas has built a business aimed at servicing the needs of property investors, owner occupiers and small business owners. David is recognised as one of the top 10 independent mortgage brokerages in the country, David and his team have settled almost billions of dollars worth of residential and investment loans over the last decade.
Known for his straightforward, relatable style, David believes by educating people about property funding; they fare better in the market. By sharing his expertise openly, some of the people he educates will likely become his clients. It's a win-win approach.
David Thomas is a credit representative (Representative Number 506153) of BLSSA Pty Ltd, ACN 117 651 760 (Australian Credit Licence 391237).