Can you believe it’s Spring already? This year is seriously flying and there are only 16 more weeks until Christmas!
If you are looking to buy a new property this year then Spring is always a great time to buy, no matter whether you are a first home buyer, next home buyer or serious property investor. People are generally in better and clearer mindsets, and are more motivated to spring into action to achieve their goals before the end of the calendar year.
At iBuyNew, we have hundreds of new apartments, townhouses and house and land packages to choose from right across Victoria, New South Wales and Queensland and our expert Property Consultants are here to help you find the right solution to meet your needs and requirements.
There are many advantages of buying a property including financial security, building wealth and owning your own home, but as a property investor you can also save thousands of dollars every year in tax.
One of the first things you need to think about before buying a property though is to take a long hard look at your finances and work out exactly what you can afford, without overstretching yourself as this will put you under financial strain.
Now is the perfect time to spring clean your finances to ensure everything is in order to make this property buying process far easier for you in the long run. It’s also important to ensure you generally stay on top of your finances as a lot can happen in a year and things can change very quickly.
So what key things should you look at when spring cleaning your finances? Here are some of our top things to freshen up when buying a new property:
Spring Clean Your Finances 1. Finish your Tax Return
One of the first things you should do is complete your tax return to work out how much tax you have saved this year. The likelihood is that, for the majority of us, we will not claim back all of our tax from the taxman that we could have. However, through property investment, this can help you pocket more money next year, especially if you are a high income earner.
For those earning above $80,000, you will be taxed at a rate of 37%, and you could save $17,547 in tax, whilst those earning over $180,000, you will be taxed at 47% and could be saving $54,547 in tax which is massive!
You generally have until 31 October to lodge your tax return, but this can be later if you use a registered tax agent, whose fees are also tax deductible! If you do end up claiming money back from the taxman, then instead of celebrating and spending it all, you might want to put it aside to be used towards your property deposit. 2. Create a Budget
The next thing you need to do is to look at all of your finances and know how much you have saved already. This will help you work out how much more you may need to save to reach a 10% deposit. To make this easier for you, why not try out our Budget Calculator
which calculates all of this for you. 3. Savings Plan
If you haven’t yet reached your 10% deposit, then you need to look at ways you can increase your savings and cut out any unnecessary expenditure. This may mean bringing in lunch instead of buying lunch or skipping that holiday this year. It could also mean switching energy suppliers and cancel that gym membership if you are no longer using it.
You can always see if family or your partner can help, whilst our Property Consultants at iBuyNew can help you with a Savings Plan as well. Make sure you try out our Achieve My Savings Target Calculator
which will show you how long it will take you to reach your savings target. 4. Pay off Debts
To help present your case in the best possible light to lenders, it’s best to have no current debts. This means paying off any loans as soon as possible and show your lender that you are able to save money each month. Having a budget and savings plan to show lenders can also help with getting approved for a loan. If you have a number of different outstanding loans, then always pay off the highest interest loan first. 5. Reassess your Savings Account
If you are still saving for a deposit, then it’s best to look at your savings account and check the interest rates you are receiving. With interest rates at an all-time low, your savings account may not be the most competitive in the market anymore. It’s therefore best to shop around and move your savings if necessary to another financial institution offering a better rate.
You could also consider a term deposit which generally pays a higher interest, but means you need to lock away your savings for a set amount of time. Again, re-look at your goals and go down the path that best suits you. 6. Negotiate a Pay Rise
Are you due a pay rise? Now could be the right time to speak to your employer and negotiate a wage increase. If you succeed in achieving a pay rise, then instead of spending this extra cash, put it away to help you achieve your deposit goal faster. 7. Re-look at your Mortgage for the Best Rate
If you already have a mortgage then you should also check out what rates you are paying, especially as interest rates are at an historic low. Try approaching your current lender to see if you can negotiate a better deal. If not, then it might work in your favour to switch mortgages or lenders to reduce your mortgage rate. However, ensure that you do not compromise on the loan features to achieve this. 8. Re-look at your Insurance Policies
If you already have insurance, whether it is car, home, life or health, then you should review all of this to ensure they still meet your current needs. If you are paying for things you no longer require, now is the time to switch to a policy that better suits your needs. However, do not scrimp on insurance and always go for a policy that covers all of your requirements.
Why spring into a new property?
Once you have given your finances a spring clean, now is the time to look at buying that new property. So why should you buy a new property now? Here are our five top reasons: 1. Low Interest Rates
Interest rates are now at an historic low of 1.50 per cent making it much more affordable to purchase a new property. Property buyers can take advantage of extremely low mortgage repayments as well. 2. Tax Benefits / Government Incentives
As an investor there are many tax benefits available including depreciation and through negative gearing, whilst as a first home buyer you can take advantage of some of the Government incentives including the first home owner grant, where you could currently save as much as $20,000 in Queensland. 3. Provides a Solid Investment
Property provides a solid investment and is one of the easiest methods of investing. Everyone needs a home to live in and with the population of Australia constantly growing, more homes will be required for the future to meet this demand. 4. Proven Over Time
Property is a proven stable strong investment and over time property has always increased in value. We advise that you hold on to property for the long term of at least ten years, as property tends to double in value every ten years or so. 5. Everyone Loves New!
Lastly, everyone loves New property! Not only will you be the first people to own or live in this property, but it is also more attractive for tenants to rent out your property. You will also have less maintenance problems over the long term.
Spring is a wonderful time to buy a new property and we have a great variety of brand new apartments and house and land packages to choose from right now, whatever your budget. Spring into action today
and find out how easy it is for you to purchase that new property you have been pondering over. Simply give us a call on 1300 123 463
and speak to one of our expert Property Consultants who can guide you through the new property process and show you what properties we have available to buy today.
Published on 1st of September 2016 by Marty Stanowich