7 Tips For Saving Your Deposit

Investing in property is an enterprise that can take a lot of research, advice and sometimes even trial and error to get off the ground. And, most importantly, it takes money. There are many costs involved when it comes to buying a property, one of which is the initial deposit you’ll need to put down. Generally, most buyers aim to save or access a deposit of 10% of the purchase price, although a deposit of 20% is ideal if you want to avoid lenders mortgage insurance (LMI).


Prime Minister Scott Morrison recently outlined a First Home Loan Deposit Scheme that could help some buyers get their property goals off the ground with a deposit as low as just 5%. While the plan is intended to help first home buyers enter the property market, not investors, this could be a step towards rentvesting for those who are keen to leverage the scheme. For many, the prospect of saving a property deposit is daunting and is something they focus on once they are closer to wanting to buy. But to give yourself the best chance of growing the biggest possible deposit, you should ideally start planning and saving at least two years before you hope to buy.

This would mean you could save a greater amount and wouldn’t need to borrow as much from a bank or lender, which would serve you well in the current climate in which many investors are hampered by strict lending conditions.

 It would also increase your borrowing power and expand your loan options by allowing you to demonstrate a positive savings habit to potential lenders. In addition, if you could avoid having to pay the fee associated with LMI – which is a insurance policy that protects the lender in case of default – you could stand to save thousands of dollars.

For many investors-to-be, saving a property deposit can be a difficult prospect, especially if you find that you run out of money before you run out of month as it is. But with our tips for saving, you could be well on your way to landing your first investment property sooner rather than later.

1. Get budgeting

Budgeting sounds like the obvious tip – and it is. However, clear, strategic budgeting is about much more than simply saying you will put ‘X’ amount into your deposit savings every pay period. Instead, see if you can work out a budget that includes paying yourself a regular amount – enough to cover your essential bills, plus a discretionary spending allowance. You might find that it leaves you with more to set aside than your initial ‘X’ savings amount. To boost this value, look for opportunities to skim costs, such as by cooking more and eating out less. Go on a spending freeze for a month, when you don’t spend a cent on anything unless it’s absolutely necessary. Opt for Netflix and homemade comfort food rather than going out for dinner and a movie. In other words, make a few small sacrifices now to reap the rewards later.

2. Reduce your rent

This can be one of the most effective ways to save for a property deposit, as paying rent can take up a huge chunk of your earnings each month. While it’s not feasible in every situation, there are various ways to reduce rent, such as by housesharing, moving back in with your parents, or moving to a cheaper location. It might be slightly painful in the short term, but keep your eye on the prize: property ownership awaits.

3. Consolidate debts and credit cards

Consolidating debts and credit cards can reduce your repayments and interest, which frees up cash that can be redeployed into your savings account. Not only that, but the less debts you have, the more favourably your bank will look upon your home loan application. Banks offer debt consolidation or personal loans that allow you to combine these payments into one; or you can just make a plan to carve through your debts and smash it as swiftly as possible.

4. Simplify your life

Simplifying sounds… simplistic, but foregoing some of the little things will also help you save money. For instance, if you spend $100 over the course of the week on buying beverages – a coffee on the way to work or a beer at the pub after you’ve knocked off – then that’s $5,000 you’ve frittered away in a year alone. For every meal out that you would have bought, put that money into your savings. Work out what other things you can cut back on, and put the money not spent into your savings.


Do you use your gym membership, for instance? Could you use the exercise equipment in a park instead, or do you have equipment at 

home? Remember, cutting back to save a deposit doesn’t mean you have to live a completely spartan lifestyle, but it will be worth it when you reach your end goal.

5. Be a mindful consumer

Really think about your usage of fans, heaters and air conditioning throughout your home – energy bills can chew through thousands of dollars per year, and being smart about your consumption could see you make some significant savings. Could you hang your clothes out to dry instead of using a dryer, and wait to do your laundry when the load is full instead of in smaller batches?

6. Access the First Home Owner Grant

If this is your first home, you may be eligible for the First Home Owner Grant – however, there are conditions to be met, depending on the state or territory in which you intend to purchase the home, and the price of the property. Requirements vary, but generally you need to be a permanent resident or a citizen of Australia, and intend to buy the property as an individual and not as a corporation or trust. The applicant must live in the property as their principal place of residence within 12 months of the purchase, and remain there for at least 12 months.

7. Seek support

Some of the ways that family could help you get a leg up on the property ladder include lending or gifting money towards a deposit, or agreeing to go guarantor on the loan (using a proportion of the equity in their own home or investment property towards your property loan). As guarantor, they also become responsible for making loan repayments in case you are unable to do so; thus, you become a less risky prospect for a lender. The best way for this situation to work is when there is a win-win for both parties – for instance, if your parents provide a 20% deposit, then they retain 20% of the property’s value. Look for ways to exchange value, remembering that it might not always be monetary.

Applying these tips and learning how to save will not only help you get started in property investment but could also result in some important lifestyle changes that could benefit you in the long run. Not only will you be able to work towards saving a deposit but you’ll also be ready for a rainy financial day.

Source: Your Investment Property 25th July 2019

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.


Tax Talk: Renovations Versus Repairs

Upgrading your investment property can propel it into its next stage of growth, but it can cost a pretty penny along the way.

Knowing which costs are immediately claimable from a tax perspective, and which ones are not, can make all the difference when preparing your reno budget.

Early on, the question must be asked: which repair costs can be funnelled back to you through the means of a well-prepared tax claim? And which costs are classed as a renovation, and are therefore added to your cost base – making their benefit known only once you sell the property?

The Australian Taxation Office (ATO) stipulates that a rental owner is entitled to claim the costs of any type of work done to an investment property, provided that the expense ultimately contributes towards its overall maintenance and repair.

By ‘repairs’, the ATO hones-in on any corrections that are made to damages, defects or instances of ‘wear and tear’, inflicted on the property during the time it is rented out to tenants.

“To repair something means to fix defects, including renewing parts. It does not include total reconstruction,” the ATO confirms.

So, in practice, whilst the replacement of a broken shower head or the re-sealing of a leaking bathtub are both considered tax claimable, transforming a perfectly functioning bathroom into an Art Deco meets Moroccan affair wouldn’t necessarily inspire the tax office’s seal of approval.

On the other end of the spectrum to ‘repairs’, there are the costs that are put towards the ‘maintenance’ of the rental property, which are also tax deductible. But what types of work does this cover?

Source: Your Investment Property 2nd August 2019

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.


This is what first home owners need to do to get into their dream homes

Under current market conditions, purchasing a home in idealistic locations can prove quite tricky, especially for first home buyers.


It is a great strategy for first home buyers looking to get into the market when they just don’t have the budget to buy their dream home.

So, they invest in more affordable markets and rent where they like to live while their investment is working for them to build up their deposit power.

For example, one young couple I’ve worked with, Tara and Martin, lived in Sydney’s expensive Inner West but could not afford to buy their $1.5 million dream terrace where their repayments would have been more than $6000 per month.

So, they adopted rentvesting and continued to rent in the Inner West for $550 a week.

They then strategically invested in Dapto and Adelaide where both property purchases were under $400,000.

In three years, they made just under $300,000 in equity which will go to their deposit power back in Sydney when the time is right.

If purchasing your dream home lead to mortgage repayments $5,000 a month, but renting in the same area had rental repayments of $2,500 a month, you would be left with $2,500 per month to invest.

To get started as a rentvester, firstly, you must get access to a deposit (as you would if you were purchasing their dream home).

The deposit can be obtained by savings or using your parent’s equity through parent pledge type structures.

You’ll need 20 per cent of the purchase price, plus stamp duty. It’s best to speak with a broker about the options and exact figures for how much is needed.

Next, it’s crucial to set a budget for buying and development an investment strategy, either yourself or with the help of a buyer’s agent.

When selecting a buyer’s agent, avoid the spruikers and cowboys of the industry by only working with firms who do not take kickbacks or buy off the plan.

Finally, you’ll need to pick your market. The best thing to look out for here is a market positioned for good growth in the first 3-5 years so you can build deposit power.

Look for areas driven by infrastructure, rental demand, employment and population growth.

My team like to look at areas down around South Adelaide such as Woodcroft and Morphettvale where there are markets you can buy in for under $400,000.

The Suburbanite team also look towards Flynn, in the ACT, which is gentrifying and starting to go through the urban renewal process.

What happens after selecting your market and purchasing a property for rentvesting?

It’s important to be patient while the value of the property increases with the market and remember to pay down as much extra off the loan as you can so you can build your equity even faster.

Once you have a good amount of equity, you can sell it to cash out of leverage it to buy your own home.

Some rentvesters will even do this 2-3 times before cashing out and buying their own home to really double down on their deposit power.

Successful rentvesting doesn’t come easy. Here are my top tips to successfully rent-vesting:

  • It HAS to be a growth market driven by employment, infrastructure and population growth
  • Avoid new or off the plan as they have lending risks, are slower to grow in value and can be at risk of over supply
  • Don’t be tempted to sell the property too soon, 12 months is not long enough to build equity in the property market and you typically need to work on a 3-5 year strategy. So be patient…


Source: Your Investment Property 12th June 2019

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

first home buyer

Housing Minister Says Now Is Right Time To Buy

Housing Minister Michael Sukkar urged first-home buyers to try and grab a property now before the introduction of the First Home Loan Deposit Scheme in 2020.

“If you’ve got an opportunity to get a foot in the market before then, you should take it, given I think the market is starting to improve. People who buy now, I don’t think, will regret it at all,” Sukkar told The Australian.

The Minister spoke as the government polishes the loan scheme, which will enable first-time buyers to purchase a house with as little as a 5% deposit.

The market conditions were possibly the “best ever” for first-home buyers, according to independent property economist Andrew Wilson.

“It’s a very good scenario for first-home buyers. They’ve still got those stamp duty concessions in NSW and Victoria, where they don’t have to pay stamp duty on a house worth $600,000 in Victoria, and $650,000 in NSW,” Wilson said.

Markets, especially in Sydney and Melbourne, were “feeling the bottom” but would soon rise up, according to Wilson.

The Morrison government also put more “confidence” in the market, according to Sukkar.

“We’re seeing green shoots in Melbourne and Sydney in the last quarter and I think with low-interest rates, with APRA reducing serviceability buffers, all those factors combined to confirm that optimism,” Sukkar said.

Ninety-one percent of first-home buyers believed owning a property is now within reach, compared to only 80% the same time last year, according to The Commonwealth Bank (CommBank).

Source: Your Investment Property 22nd July 2019

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

boost rent

Seven Proven Strategies For Boosting Your Property’s Rent

It’s a dilemma every landlord has to face at some point: when, and by how much, should you increase your rent?
boost rent

You might fear raising the rent too much and driving your great tenants away, while at the same time you know you’ll never achieve property mogul status if you continue leasing your property for rock-bottom rent.

Here are seven strategies proven to boost your rental return, which you can implement across your property portfolio. Of course, this advice is general and does not take the place of speaking directly to your property manager or investment advisor, who should be able to guide you on specifics such as the market rent for the area and what local tenants are looking for.

1. Little and often
By far the most successful way to hang on to good tenants and keep your rental returns increasing is to raise the rent by a small amount every six or 12 months, depending on the legislation in your state.

If you don’t increase the rent for several years, then hit your tenants with a $50 per week rise out of the blue, they’ll be understandably annoyed and you may find your next communication with them is when you receive their ‘Notice to Vacate’!

Instead, try tacking $5 or $10 per week onto the rental amount at a time. Each of these small, incremental increases will be affordable for your tenants, meaning they’ll be less likely to jump ship and leave you with a vacant property that’ll cost you money to maintain while you find new tenants.

2. Know what tenants want
As a landlord, it’s easy to get caught up and throw good money after bad when it comes to making improvements to your property. Unless you know what tenants are looking for, you can’t possibly cater for it.

You could spend thousands repainting or installing a dishwasher, when an air conditioner may have made the property much more appealing to potential tenants, at half the price.

Seek feedback from your property manager about the must-have items on tenants’ checklists. And if you’re unable to offer some of them, such as off-street parking (which you can’t manufacture out of thin air), perhaps you can make up for this with another coveted feature, like solar panels to reduce their energy costs.

3. Consider allowing pampered pooches
While laws in some states now make it illegal to discriminate against tenants who own a pet, many landlords still prefer their investment properties to be occupied strictly by humans only.

If you’re willing to allow pets at your property, your goodwill could see you rake in extra rent from a grateful animal owner. Most tenants with pets will apply armed with references from previous landlords, so you’ll know they are responsible when it comes to limiting the damage their pets cause to the property. You may even be able to insert a clause into the lease covering damage done by pets, or to ask for a slightly larger bond amount just in case.

4. Give the property a makeover
It doesn’t have to be a super-expensive renovation with all the bells and whistles – improvements as small as a fresh coat of paint or new door handles on the kitchen cabinets could be enough to attract more tenants and bump up your asking rent.

Do your sums to make sure the investment will pay off, and consider speaking to your accountant to ensure you understand exactly what is tax deductible, as this may inform your reno choices.

There are myriad minor changes you can make that will give the property a new lease of life: think sparkling new taps, adding a second air-con unit in the master bedroom, or ripping up the tatty old carpet and polishing the boards underneath. Many small jobs can even be done yourself, saving you the extra expense of calling in a tradie. The rooms that tenants tend to pay the most attention to are the bathroom and kitchen, so your time and money are often best spent in these areas.

5. Add a unique selling point
Have a look at the rental listings in the area. How many have alfresco entertainment spaces, ducted air conditioning or solar panels? It’s well worth considering adding something to the property that will make it stand out from the rest, allowing you to justify why it is a little more expensive to rent than similar nearby properties.

What you choose to add will depend on the location and your target tenant of course, but remember that by improving what you’ve got to offer you could actually begin to attract a whole new demographic – one that has more spare cash to splash out on rent. For example, professional couples likely crave an outdoor dining space, families will be impressed by a secure yard with safe, flat surfaces for the kids to play in, and eco-lovers will be drawn in by sustainable-power options.

6. Keep on top of changes in the area
Has a new shopping centre, freeway or swimming pool recently been built near the property? What about the awesome local schools, childcare centres and parks?

Don’t forget to emphasise these when you next advertise your vacant property, so you catch the eyes of higher-paying tenants. Improvements to services and infrastructure may also boost median figures in the suburb, which you can then use as a reason to increase your own rent. And the best bit is, unlike renovating, it won’t cost you a cent!

If you find your tenants fleeing when their lease is up, it could be bad customer service, not the rent, that’s sending them packing.

7. Audit your property manager
Property managers play a huge role in the success of your rental portfolio, from how they handle repair requests from tenants to giving good advice on when to increase the rent.

If you find your tenants fleeing when their lease is up, it could be the bad customer service they’re receiving, not the rent, that’s sending them packing. Many tenants are willing to pay a few dollars a week more for a property manager who attends to issues promptly and communicates effectively with them, so it may be time to assess whether the one you’ve employed is giving you the best chance possible of charging premium rent.

Source: Your Investment Property 7th May 2019

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

tax deductions

Five things to know about depreciation this tax time

With tax time fast approaching, claiming depreciation is the key to increasing cash flow from an investment property.
tax deductions

BMT Tax Depreciation has some tips for investment property owners when it comes to claiming depreciation at tax time. Below are five ways to make sure you get what is yours.

1. Don’t miss out on depreciation deductions

Property investors are entitled to a range of tax deductions which help to lower taxable income and make owning an investment property more viable.

Some of the tax deductions available include council rates, the interest from a mortgage, property management fees, land taxes, strata fees, maintenance costs, insurance, accounting fees and depreciation.

Of these deductions, depreciation is the most commonly missed.

This is because it’s a  non-cash deduction.

That is, investors do not need to spend any money to be eligible to claim it.

Research has shown 80 per cent of property investors are missing out on the depreciation deductions they’re entitled to.

To ensure that depreciation is being claimed correctly and maximised, investors should contact a specialist Quantity Surveyor, such as BMT Tax Depreciation, to organise a comprehensive depreciation schedule.

A BMT Tax Depreciation Schedule outlines all the deductions an investor can claim for their investment property. It lasts for forty years and the fee for preparing it is 100 per cent tax deductible.

During the 2017-2018 financial year, BMT Tax Depreciation found their clients an average of $8,212 in tax deductions in the first year claim alone for residential properties.

Visit BMT’s tax depreciation calculator for an estimate of the deductions you may be entitled to.

2. If you recently purchased an investment property, you can still make a claim this tax time

The Australian Taxation Office (ATO) allows investors to claim depreciation based on the number of days a property was available for lease.

A BMT Tax Depreciation Schedule makes partial year claims like this easy for the property investor and their accountant and can pro-rata deductions based on the percentage of time the property was available for rent.

3. Have you made improvements? Don’t forget to update your tax depreciation schedule

If improvements have been made to the property in the past financial year, like a renovation, it’s a good idea to get in touch with a Quantity Surveyor to see if you will require an updated depreciation schedule.

It’s important to be aware there is a difference between a repair and a capital works improvement, as this will affect the claim. The cost of any repairs can be claimed in full in the same financial year they are completed.

An improvement, on the other hand, is when you improve the condition of an item or property beyond that of when it was purchased. Such improvements are capital in nature and must be depreciated over time.

For this reason, if any renovations or improvements have been made to the property in the last financial year, the property investor should seek the advice of an experienced Quantity Surveyor to ensure their deductions are claimed correctly.

Find out more about BMT Tax Depreciation by visiting their website.

An updated tax depreciation schedule may be required after a renovation to capture all newly installed plant and equipment assets or capital works expenditure.

4. Discuss tax depreciation deductions with your accountant

An accountant will often refer property investors to a Quantity Surveyor or contact them on your behalf to arrange a schedule.

While they can process the deductions, they can’t estimate construction costs to provide you with the tax depreciation schedule.

Only a qualified Quantity Surveyor can do that.

Quantity Surveyors are one of the few professionals recognised under Tax Ruling 97/25 to have the appropriate construction costing skills to estimate building costs for depreciation.

However, not all Quantity Surveyors specialise in tax depreciation.

Only a tax depreciation specialist like BMT can be relied on to maintain detailed knowledge of all current ATO Tax Rulings relating to depreciation.

Once a tax depreciation schedule has been completed, an Accountant will input these deductions into the property investor’s annual income tax return.

5. Amend previous tax returns and don’t miss out on claiming past years’ deductions

Investment property owners often enquire about a property they have owned and rented for a number of years and they haven’t claimed depreciation deductions before.

The ATO allows tax returns to be easily adjusted for two years after the initial submission. This enables property owners to recoup some of the deductions that may have been missed.

It’s important to note a separate application will need to be submitted for each financial year requiring an amendment.

Income, depreciation and other claims made will impact the outcome of each tax return.

If you have missed or not maximised your claim in previous years, the depreciation schedule can be tailored within the eligible years.

BMT offers a guarantee to all clients that if we can’t find double our fee in deductions in the first full financial year, we won’t charge for our service.

To learn more about depreciation, visit the tax depreciation overview page on the BMT Tax Depreciation website.



Source: The Real Estate Conversation 7th May 2019

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.

date night

Upgrading Your Home: Save Money Without Giving Up Date Night

There are a few things Aussie homeowners aren’t willing to sacrifice when saving for an upgraded property, and date night is one of them. ING’s Upgraders Homeownership Survey Report found that only 25% of those surveyed would give up social activities—for example, date night—in order to speed up their savings.

Saving for an upgraded home means that you’ve already got a roof over your head, so there may be less pressure to cut little luxuries from your budget. But Aussies are saving money in other ways that might surprise you.

One in five home buyers moved interstate to places like Brisbane or the Central Coast, where house prices are more affordable. Over half of the survey respondents reported that they were thinking about an interstate move in the following year.

That’s not the only way buyers are saving for a home upgrade. Over one-third of people who upgraded in the past year took in a flatmate for help with the rent. Of those, 32 percent were families.

If you want to upgrade but don’t fancy moving states, taking in a renter, or getting rid of date night, what are your options?

Balance is the key to saving, whether it’s your first home, your second home, or your tenth. While you may need to cut out some small luxuries, you don’t have to give up everything that you enjoy.

Of course, it feels great to upgrade to the home you’ve been dreaming of, but not at the expense of everything you enjoy. Here are some tips for making the most out of your savings, without putting a padlock on your wallet.

Identify your priorities
Start by identifying your priorities, both in terms of your upgrade goals and your day to day lifestyle. First, ask yourself what you hope to gain by buying a new property.

The ING survey found that 40 percent of upgraders want a nicer house. Other reasons include the desire to relocate to a different area, to get more outdoor space, or simply to get a larger house for their growing family.

If you’ve outgrown your house, the timing of your upgrade may be more important than the house itself. If you’re looking for a specific property but are in no rush to move, your priorities will be different.

The next step is to figure out your lifestyle priorities. Think about how you spend your disposable income: is it coffee, dinners out, and movie nights? Or is it beach holidays, organic produce, and clothes? Whatever it is, decide where you can and can’t budge.

Look for deals
Put your investigative skills to the test and start hunting out the savings. If you don’t want to give up date night but you need to save money, you’ve got options. Use websites like Groupon and Scoopon to find discounted deals on restaurants, activities, and more.

You can also install a browser attachment like honey, which will automatically seek out coupon codes for purchases you make online, giving you the opportunity to save even more on your purchases.

Airbnb your space
Got space to spare but don’t want to take in a long term tenant? Consider using Airbnb to temporarily rent out a room in your home. While this does mean having paying guests staying in your home, it gives you more control over when you’ll have tenants. This can work well if you’ve got a granny flat or a bedroom with its own private entrance.

Take turns hosting
Sometimes the best part of social activities isn’t going to a restaurant or bar, it’s simply being somewhere different. Take turns with your friends to host social events like game nights or dinners. It doesn’t have to cost much, but you’ll still get out of the house and have a good time.

Go digital at the library
If new magazines are your weakness, the costs can add up quickly. Turn to your local library, where you can often download digital copies of the latest magazines and books onto your own device. Bonus points for being good to the environment!

Use a keep cup
If a good cup of coffee is important to you, we’re not going to tell you to give it up. But you might be able to reduce the cost of your daily java by using a keep cup. Many coffee shops discount the cost of your coffee when you bring your own cup, so invest in a reusable option and save over time.

Set a budget
Establish a weekly or monthly budget for little luxuries like dining out or shopping—the amount is up to you and your household—but don’t exceed it. That way you can still do the things you enjoy, but without worrying that your spending will snowball.

Compare home loans
Compare home loans annually to ensure you’re still on the best rate and getting the features you want. Our home loan professionals are here to help you get the most from your money. It’s quick and easy—in just a few clicks you’ll be on your way to saving.

Knowing you’re on the best possible rate can give you peace of mind at the very least!

Consolidate your subscription services
With entertainment options like Netflix, Hulu, and Foxtel on the table, it seems that spending a little bit of money on a monthly subscription can lead to greater savings.

But if you oversubscribe, you’ll end up spending much more than you might have on a few movie tickets. Take stock of your monthly subscriptions: could you pick just one and get rid of the rest?

Finally, finding balance in your budget is about being thoughtful, not restricting every activity that makes you feel good! There’s a reason that Aussies are reluctant to eliminate date night, and that’s because it offers real value.

Don’t underestimate the difference a mortgage broker can make when shopping for an upgraded property. A home loan professional can help you find great deals on a new mortgage, so your savings go even further than you’d hoped. Compare home loans now with the experts.

Source: Your Investment Property 11th March 2019

This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.