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Welcome to our new-look
newsletter.
You've probably toyed with the idea of investing in areas
other than property. In this issue we take a look at some
of the safer, and riskier, alternative investments on
offer. For those who rent their properties we have also
done some tenant profiling while also highlighting the
benefits of line of credit mortgages - a useful product
for borrowers whose income ebbs and flows.
I'd appreciate your feedback on the new newsletter so
please feel free to get in touch. Hope you enjoy!
Sincerely
Capital West.
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| Line
of credit mortgage - a nice fit for the yo-yo income |
If a graph of your annual income looks like the teeth
of Jaws, you're obviously in need of flexibility� a
line of credit mortgage may just be the option for you.
Line of credit mortgages are generally interest-only loans
with no set term for the loan to be repaid. This gives
the borrower the freedom to decide when they will make
payments on the principal, a useful tool for those with
incomes that ebb and flow or for property investors looking
to take advantage of investment opportunities.
One of the main concerns for a line of credit mortgage
is that the speed in which the loan is repaid is dependent
on the borrower. Borrowers will therefore need to exercise
a level of discipline, and |
there is a very good reason
why.
A line of credit allows you to make the bulk of your day-to-day
purchases or payments with a credit card. By using the
credit card - and the interest free period it entails
� you can then channel the majority of your wage into
your loan until your credit card payment is due. This
effectively reduces the balance of your loan for part
of the month, therefore reducing the interest payable.
This is known as offset savings. If you are disciplined,
you pay the credit card off each month by using funds
from the line of credit. If you are not, you can find
yourself in a bind.
Line of credit mortgages typically have a higher interest
rate than a standard loan so it's important to weigh up
the benefits of offset savings compared to a more traditional
principal and interest mortgage. While offset savings
will contribute to helping you own your own home faster,
only additional repayments will you really help drive
your mortgage down at a quicker rate.
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Capital West Mortgage Group
P/L
ACN: 125 798 852
ABN: 76 125 798 852 |
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| Tel: |
| 1300 765 234 |
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| Fax: |
| (03) 8621 0080 |
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| Email: |
| info@capitalwest.com.au |
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| Web: |
| www.capitalwest.com.au |
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| Postal Address: |
Suite 604 / 103 Oxford St.
Collingwood
VIC 3066 |
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Alternative
investments: dynamic
or high-risk? |
Netting good investment returns is not limited to real
estate alone. But beware, while non-traditional investments
can be fun to get involved in, they still of course involve
risk.
There are pros and cons to all investments. When diversifying
your portfolio keep in mind that 'attachment', 'feelings'
or 'emotions' can be very dangerous things� if you want
to invest with a better chance to generate a return, you
need to be cold and practical. Here are four alternative
investments that are constantly growing in popularity,
some of which yield better returns than others.
Sports memorabilia
The rule 'Caveat Emptor' is very relevant when investing
in sporting memorabilia, particularly if merchandise is
from overseas. Verifying the authenticity of an autograph,
for example, is basically impossible unless you're there
to witness it yourself. Therefore buy from a reputable
source and do your home work - take in a few auctions
before you make your bid. Also steer clear of |
personal favourites unless
they're universally popular or you may struggle to find
a buyer when it's time to sell!
Carparks
They may not be very glamorous but there's not too many
commercial investments that cost less than $50,000 and
don't require ongoing maintenance costs. The Australian
reports that in 2005 Sydneysiders paid up to $50,000 apiece
for 220 car spaces in the Crescent Apartments building
in Kings Cross, yielding around 4.5 per cent net per year
in rental! But before you take the plunge make sure you
can access funding as some lenders tend to keep clear
of these kinds of investments.
Art and antiques
Most experts agree that you should buy art and antiques
primarily because you like them and only secondarily because
they may return a profit. On a positive note, however,
art and antiques add to the character of your home and
can be enjoyed while they appreciate in value.
There are price guides available covering most antiques
and certain artworks which will provide the basis for
your research before you buy. If you're considering parting
with serious cash ensure that you're buying from a reputable
source.
And remember, antiques and art |
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are not always a liquid investment
- it may take a long time to get your money back.
Classic Cars
An unpredictable beast at best, picking a winner in the
classic car market can make the ASX seem like child's
play. A good example of the fickleness of the classic
car market is the Austin-Healey 3000: you can now pick
up a good example of this timeless gem for about $50,000;
five years ago they cost $80,000- $90,000!
According to expert car buffs, classic cars should be
regarded as an investment that's for enjoyment; the fact
that it might offer a good return further down the track
is a bonus. But if you want to charge in with an eye to
the future the classic cars of tomorrow include the Audi
TT, Benz AMG and the BMW M3.
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| Tenant profiling |
In a perfect world tenants always pay their rent in advance,
stay year after year and never come close to causing any
wear and tear. In reality, the perfect tenant is all too
difficult to come by.
If you're looking for new tenants or considering buying
an investment property, the following profiles will help
you determine which type of tenant best fits your needs.
University students
Whether it's your memories of the characters from the
1980's BBC comedy The Young Ones, or flashbacks to your
university glory days, students have never rated highly
among landlords as dream |
tenants. As tenants without
a regular income, there's a greater chance that students
will lapse on rent payments. If you do have reservations,
try and get a feel for their finances, including a reference
from their parents in case they do the bunk.
Also cap the number of student renters allowed in your
property - restricting the number of people translates
into less damage, parties and clean up costs. On a positive
note, student rentals tend to roll over from student to
student as one graduates and another commences their three-five
year degree, meaning a reduced need to continually find
new tenants to lease your property.
Backpackers and international students
Keep your guard up - backpackers and international students
probably rate as the least desirable type of tenant. Strapped
for cash, it's not at all uncommon for small apartments
to sneakily |
Soothe Soul for Cheap
With life's stresses becoming more intense, finding effective
ways to relax is taking on more importance. But relaxation
should not necessarily mean huge expense! Here are four
sure-fire cheap techniques to help you unwind.
Meditation - Neuroscientists have found that
meditation affects brain activity by shifting waves in
the brain's stress-prone areas to the calmer left frontal
cortex. This shift reduces the negative effects of stress,
mild depression and anxiety. One simple technique you
can use in the comfort of your own home is to sit on the
floor, straighten your back, put your hands on your lap
one on top of the other (palms facing up), close your
eyes and begin to breathe deeply and slowly in and out.
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Yoga - Yoga
helps achieve an emotional balance through detachment.
This in turn builds calmness and a positive outlook, which
also benefits your physical health. Yoga has gained immense
popularity over the past ten years and yoga studios can
be found in even the smallest country towns. Expect to
pay $5+ per yoga session.
Music - An underrated way of winding down, some
laid-back chill out music - like Sade - will soothe your
state of mind more than you might realise. Such music
has been proven to slow down the heartbeat and the rate
at which you breathe and think, therefore prompting relaxation.
Massage - For those with partners, massage
is the cheapest self-indulgence there is. Massage stimulates
the release of endorphins, the body's natural 'feel good'
chemicals, to help induce relaxation and a sense of well-being.
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house a cast of occupants. This
accelerates wear and tear; if it's an apartment building
also expect the neighbours to throw a few complaints your
way regarding noise levels. The upside: they're traditionally
a low-maintenance bunch and are less likely to demand
five-star furnishings.
Young Professionals
Today's young professionals typically dislike the hassle
of moving house and will have been through enough negative
flatting experiences to know a good opening when they
see one. These types of renters will probably value peripheral
things like the quality of furniture and flashy white
goods more so than any other renting demographic. So if
you have some dusty old sofas and 1980s furnishing best
to strip the place bare and rent it as unfurnished.
Families
Families score highly on areas such as reliability. They
are also more likely to stay put for a while as children
settle into schools and build friendships with neighbours.
If you want to attract the family demographic you'll need
to prepare your property to attract families. This means
a properly fenced garden and secure gates so that children
will be safe when playing outside. Families can also be
accompanied by pets - not high on the wish-list for landlords!
If you're prepared to accept pets factor regular carpet
steam cleaning into their rental agreement.
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| Build right, build confident |
It's an unfortunate fact that building disasters do happen.
But for those contemplating building or renovations, incorporating
some key measures into your plans should ensure a much
better result.
Whether you're simply adding another bedroom or building
your dream home, you can take comfort that there's a trusted
and respected organisation to help. Listing one of its
core aims as "making Australian building standards and
regulations more acceptable to the industry and responsive
to end user's needs," it makes sense to have the Master
Builders Australia as your first port of call when searching
for a quality builder.
Through their website www.masterbuilders.com.au you can
verify whether your prospective builder is a registered
master builder. To secure membership, builders must show
a genuine interest in the integrity of the |
industry and prove they
have the required skills and expertise to meet quality
standards. You can search for a builder in your local
area via the website.
Once you've confirmed credibility through registration
with Master Builders Australia, your next, and perhaps
most important planning step, is to shop around and ask
lots of questions.
There are a number of things that need to be considered
when sourcing a builder; one key suggestion is to make
sure you tell each builder that you are getting other
quotes - this will keep them on their toes. Some other
important tips include: |
Need
a builder?
• Check that they belong to a relevant state-based
Master Builders Association
• Get more than just one quote
• Listen to your gut instincts
• Check your prospective builder has experience
doing your type of project
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• Cheaper isn't necessarily
better, so back up quotes by speaking with previous clients
or through obtaining testimonials; any builder worth their
salt will feel comfortable giving you access to past clients.
• Listen to your gut instincts and let them
contribute to your final decision: will your project be
a priority and will you feel comfortable having the builder
around your home when you're not about?
• Some builders will also be better at certain
types of jobs than others. Determine each builder's specialisation
and match that to your project.
By using these practical measures in your planning, you'll
be taking a big step forward to achieving peace of mind
once construction gets underway.
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Entertainment
on a budget
DVDs versus the cinema - With outlets like Video Ezy
offering three DVDs (includes one new release and two older
titles) for ten dollars, going to the cinema at around $40 for
a couple is almost now unnecessary. Given the rate at which
movies on the big screen make it into the video stores, holding
back a month or two and having a quiet night in can add a few
more dollars into your budget each month.
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Photo exhibitions
- Many exhibitions are either free, or next to free, and well
worth the effort attending. Some exhibitions are also attached
to a charity so any fee paid will typically go to a worthwhile
cause. Visit www.photoreview.com.au for exhibition listings.
Community theatre - The fun, unpretentious raw energy
of community theatre is a must if you haven't been before. The
website www.bcl.com.au has an extensive list of community theatres
with an up to date guide of what's on offer.
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Disclaimer. This newsletter does not necessarily reflect the opinion
of the publisher. It is intended to provide general news and information
only.
While every care has been taken to ensure the accuracy of the information
it contains, neither the publishers, authors nor their employees,
can be held liable for any inaccuracies, errors or omission. Copyright
is reserved throughout. No part of this publication can be reproduced
or
reprinted without the express permission of the publisher. Readers
are advised to contact their financial adviser, broker or accountant
before
making any investment decisions and should not rely on this newsletter
as a substitute for professional advice.
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