By Enzo Raimondo
AS THE end of the financial year approaches we begin thinking about tax and financial planning.
But this is not only a chance to take advantage of the stocktaking sales and to review finances – it is also an ideal time for a property review.
For property owners it is an opportunity to review existing holdings, both for home and investment.
For those not yet on the property ladder, now is the time to devise a plan to obtain that first foothold.
Homeowners with a mortgage should ensure they have the most favourable interest rate and ask their advisers whether or not, with rates at an historic low, to fix part of their loan.
Lenders’ rates vary, but be sure to study the loan conditions as well as the rate.
Ask yourself whether you are happy with your home and whether it will serve your long-term needs.
Is it the right size and location, does it have the features you want? Does it suit a growing family, is it in the right school zone, is the garden big enough?
Or, is it too big now the nest is empty?
The new financial year is a good time to plan changes – to downsize, upsize, move from a unit to a house, make that tree change or seachange, move to a better location or house with more suitable features or to buy for the first time.
These are big decisions requiring planning, so coinciding them with balancing your finances for the financial year can be helpful.
For those dreaming of buying for the first time, why not plan to make those dreams come true and put it into operation from July 1.
Research affordable locations, work out the deposit you need and how long it is likely to take you to achieve that.
Make a plan which includes regular savings and consider ways of boosting your nest egg.
For example, can family help with the deposit, is there a more affordable location near your top choice, how about an apartment rather than a house.
Buying to rent is also worth considering. If you cannot afford the property size or location you want, consider starting with a small unit or apartment and renting it out. The capital gain when it is later sold will help you obtain that property ladder foothold.
For investors the new financial year is the ideal time to review your portfolio.
Think about divesting underperforming assets, adding value to those you hold, for example through improvements, and how better to use your equity. Are your loans tax-effective?
Don’t let your portfolio stagnate. Look ahead to 2015-16. Research vacancy rates and yields, prices and affordable locations with scope for capital growth. No time? Consider hiring a buyer’s agent to do the legwork for you.
– Enzo Raimondo is the CEO of the Real Estate Institute of Victoria.