What Are My Options

The use of property options continues to grow in popularity.

Property options are a form of property vendor finance which, up until that last few years, has been predominately used by large scale property developers to obtain the right to buy a property before a set future date for an agreed price. 

During the time between the agreement and the cut off date, they push the development application through and purchase the property.

However, smaller scale investors can also use property options but in a slightly different way.

This is what is known as a “rent to buy” arrangement.

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Thinking of Converting Your Main Residence

Recently we have received a number of queries regarding the implications of converting a main residence into an investment property.

There are lots of reasons for people to consider this change, such as, being relocated for work, not wanting to sell your home, needing to upgrade or downgrade or perhaps realising that your main residence may be a fabulous investment property.

Whilst this strategy may appear to be a good financial decision there a number of factors that need to be considered.

As with any investment property the owner is entitled to certain tax deductions.  If you have paid a significant amount off your  main residence mortgage and then decide to turn it into an investment using the equity you have raised to help you buy a new home, you may find the tax deductions and financial incentives are skewed the wrong way. 

What do we mean?  

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Myth Busting

The popularity of Self-managed superannuation funds (SMSF’s) continues to grow and grow and grow.

The latest statistics show that there are now almost 520,000 SMSFs in Australia controlling over $500 billion in assets. This represents 31% of the entire “superannuation pool”!

Part of the ongoing growth in the SMSF sector, is the desire by property investors to realise their property investment goals.

However, there are still a number of myths and misconceptions being peddled that leave people confused.

Gone are the days where, as a trustee of your own SMSF, you can invest in “questionable assets”, take little or no responsibility for investment decisions or benefit from tax breaks not available to those in normal super funds.

Many of the SMSFs that need to be closed down have reached this point as they were not set up correctly in the first place. 

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Looking to Borrow?

One of the best ways to fast track your property portfolio is to maximise your “borrowable equity”.

Leveraging against assets to invest is a time-tested investment strategy that can work really well – assuming you invest in quality assets of course!

Maximising your ability to borrow can assist you with many things including upgrading of your home, buying an investment property, investing in the share market and funding short-term cash flow challenges. 

Therefore, maximising your borrowable equity is key to ensuring you maximise your financial opportunities.

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