Author: Frank Barragan

Is it smarter to invest in property than buy my first home? If you’re young and considering buying your first home, it pays to know about the other often-overlooked option for those just beginning their property journey.   Choosing to invest in property while you’re still young means you’ll get all the benefits of owning while still having the flexibility of being able to rent in a hot suburb.   The best part is that investment loans give you a larger borrowing capacity because your salary and any potential income from renting your investment property out are both taken into account.   What’s in it for me?   Your tenants pay for your asset while you rent, so you’ll still have extra funds to do what you love.   There’s a lot to consider when it comes to investing. I can put all your options on the table and help you work out if it’s the right choice for you.   Let’s chat! My Very Best To You Always, ...
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LVR - What is it and what does it mean for you? Loan to Value Ratio (LVR) is a complicated term that even financial institutions can have trouble simplifying.   At its core, it is a measure of how much of your property’s value you do not have debt against.   It is a calculation of your loan balance divided by the assessed value of your property. For example, a 75% LVR would be a $750,000 loan balance against a property value of $1,000,000.   If you’re looking to purchase a property it’s critical to know all the costs involved. This will give you a true indication of your loan size and how much your LVR will fluctuate as you look at different properties valued at different prices.   Many banks offer loan discounts and other savings if you have an LVR below 80%.   Still don’t understand?   Don’t worry, you can call me anytime and I will break it down for you. My Very Best To You Always,  
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Could You Be Eligible For a Home Loan Discount? Who doesn’t love a good discount?   You might be surprised to learn that lenders are pretty happy to offer lower interest rates to the right customers.   If you: Have a low Loan-to-Value ratio (LVR) Want to upgrade the size of your loan or; Are looking for a loan for an owner-occupied purchase It could be you!   To see if you’re eligible for some of these savings let's talk! My Very Best To You Always,  
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Tips For Finding That Perfect High Yield Property Any property guru worth their salt will tell you that a dream property investment has nothing to do with a prestigious address or sleek amenities.   The ultimate goal, is to find that perfect “high yield” property that will give you maximum returns for as little input as possible.   Yield refers to the amount of cash a property produces as a percentage of its value and is calculated by the rental income you are receiving compared to the purchase price. There’s a lot more that goes into the calculations, which I’m happy to run you through, but to give you an idea on what to look for, I’ve put together some simple tips.   Do your research. There are plenty of stats out there that will give you the median rental yield for each suburb. This is a great place to start! Look for dual income properties such as a house with a granny flat. You can potentially have two streams of rent coming i...
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Fixed or Variable Rates? Do you know the difference between a fixed and variable rate?   If you don’t have a background in finance, it can be difficult to understand how they work.   Here’s a quick breakdown;   Variable Rates (Move Up and Down)   A variable interest rate will move up and down as lenders react to decisions made by the RBA and the marketplace. Variable interest rates do not have a fixed term but some can have discounted interest rates over a period of time. These are known as Introductory Rates or Honeymoon Rates.   Variable rate loans can be quicker to pay off as they allow more flexibility on your repayments.   Fixed Rates (Stay the Same)   A fixed rate loan will stay at the same rate regardless of anything that happens in the market or with the RBA. This means your repayments will be regular and you’ll always know how much money will be withdrawn from your account. This makes budgeting ...
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Which cash flow strategy works best for investors? Before you invest in property you need to decide on a cash flow strategy. There are two main options to choose from and they both offer different tax benefits.   Positive Cash Flow Strategy   If you are making a profit from a rental income this is known as positive cash flow. This is a popular choice when interest and vacancy rates are low because you can capitalise on loan-to-value ratios (LVR) and reduced repayments. You can claim on depreciation and take advantage of special loan features such as offset accounts.   Negative Cash Flow Strategy   If your rental income is less than the expenses your property generates, never fear. This is a strategy some people use to reduce their taxes and make more money in the long term. It’s a great option if you have a reliable salary as you can offset any losses against your income.   Negative gearing can be complicated so I def...
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What is a Redraw Facility on a Home Loan? One of the great features of a home loan is the ability to redraw any of the money you’ve made in extra payments on your mortgage.   It’s a handy service for those needing access to a lump sum of cash and is often used for household renovations or unexpected expenses.   The biggest drawcard is that the compound interest you are making on your mortgage payments is most likely more than you’d get from a savings account. Savvy borrowers know this means more bang for their buck and that if they exercise restraint they can save thousands of dollars over the life of their loan.   The only drawback?   Depending on your lender, you may have different fees and restrictions on your withdrawals. It always pays to speak to a broker, who can advise you on which loans will work for you, if you are factoring redraw into your home loan plan.   I am happy to chat with you about these facilities ...
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There are three main reasons people invest in property.   Capital Growth   Simply put, this is how much the value of your property will increase over time. This isn’t something that happens overnight so be prepared to hold onto the property for a few years if you want to see significant growth.   Rental & Investment Yield   This is the amount of profit you make from rent after you deduct expenses such as upkeep and taxes. Rent prices in Australia are sky-high right now so you can expect excellent returns.   Tax   There are plenty of ways to save on your tax bill if you invest in property. You can claim expenses such as renovations and capitalise on negative gearing by offsetting any losses you incur on your property against your taxable income.   I’m an expert on the financial benefits of investing. If you want more information, give me a call.   My Very Best To You Always, &...
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What a rush!   After attending a million inspections, scanning countless websites and being introduced to more agents than you can bare to think about, you’ve finally found your dream home.   It’s been worth every minute and you can’t wait to start moving in the furniture.   Unfortunately, that’s when the boring part begins.   Buying property is a huge undertaking and as such, there are some fairly stringent legalities that you have to consider. Since most of us aren’t fluent in property law, it’s advisable to get someone who is, to help you navigate the process.   A conveyancer will: Prepare and lodge your contract and accompanying legal documents Thoroughly check the history of the property and its certificate of title Act on your behalf with a vendor or agent Handle your deposit Ensure your rates and taxes are correct Act as your representative through settlement   ...
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How Does Debt Consolidation Work? Debt consolidation may sound daunting but in reality it’s just a few simple steps that can help make your finances much more manageable.   Let me walk you through them. The first thing you need to do is get your property valued. This will determine your loan value ratio (LVR) which lenders need to work out how much money you can borrow Rather than settle for the first valuation you’re offered, shop around and see what other lenders have to say. A higher valuation means more equity and more equity means more money to renovate, invest or withdraw. Work out a budget and speak to a professional about how much debt you can realistically add to your home loan Once you’ve done all your research, it’s time to apply for your new loan Good news! Now the loan is settled, your lender will pay off your other debts and add them to your mortgage repayments Streamlining your finances through debt cons...
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