EQUITY

Reception • August 12, 2021

EQUITY.


IT’S A HOT WORD IN 2021, AND DEPENDING ON THE DEFINITION, A HOT TOPIC TOO.

It’s one of those fun english language words with multiple meanings.


Standard dictionary definition will tell you it’s about the value of shares in a company.


It will also reference the quality of being fair and impartial (though for a better understanding on this one, check out the Global Citizen link below).


However, add the word property and you’ll find something similar to how NAB describes it: “the difference between the current value of your home and how much you owe on it”. This is what we want to tap into.


(If you’re not yet a property owner, don’t check out just yet! This is for you too.)


Property equity is valuable for both the present and future:


  • Improve quality of life in the present;
  • Use equity to support investment;
  • Cumulative equity released to support retirement lifestyle



Ultimately, it is the equity in property that draws us to purchase property. (Aside from the freedom to do what we will with our own four walls!)

IMPROVE QUALITY OF LIFE IN THE PRESENT

The most obvious in this space is owning your home outright, therefore having no “four walls” payments (rent/mortgage). For the majority of us not there yet, there are a couple of other ways equity can improve quality of life in the present:


  • Refinancing to access some equity as cash to fund significant purchases, renovations*, or travel;
  • Refinancing your mortgage to reduce your payments freeing up more of your income for other living expenses.


*Renovations are a great use of equity when done with consideration as it can further increase your equity. Why not check out one of our blogs on renovating here or here?

EQUITY TO SUPPORT INVESTMENT

This is an often overlooked opportunity that arises through home ownership. Without accessing equity in your home through refinancing, you can use existing equity as a deposit for purchasing investment property. This of course increases your ability to build further equity (which is great for point 3!).


It can also be used as collateral for other investments.

CUMULATIVE EQUITY FOR RETIREMENT LIFESTYLE

There is no time too early to start thinking about your retirement lifestyle and what that will cost to fund. While Superannuation is one way of supporting this, property investment has proven to be a trusted way of building wealth to support retirement. While selling the roof over your head to fund your retirement is not likely the solution, having investment property with equity that allows you to do just that is a different story!

WHAT SORT OF DOLLARS ARE WE TALKING ABOUT?

Despite the challenges that began in 2020, Australian property values have come along in leaps and bounds. According to the latest CoreLogic property data, the average Melbourne house value increase last month was 1.68%. While, that might not sound like much, but on a property valued at $750,000 in June, that’s an increase of $12,600. (And if you want to look at the past 12 months, we’ve had an increase of 12.34% – that’s $92,550 on a house valued at $750,000 this time last year!)

WHY ARE WE TALKING ABOUT THIS?

Knowing options for improving life in the present and the future enables action – action that could make a real difference. If you ask our team members what gives them job satisfaction, you’ll find many of the answers centre around helping people achieve goals, get the right solution for their situation and set themselves up for a very positive financial future.

SIMPLY PUT, EMPOWERING YOU TO ACHIEVE A POSITIVE FINANCIAL FUTURE IS OUR JAM.

Regardless of where you’re at (long-term homeowner; property investor; new home-owner; or still saving a deposit), property equity – and what it can do for you – could be a cornerstone of your plan.


Why not look at your current situation, goals and how we can connect the two? Contact us , give us a call on (03) 8657 8664, or reach out to us on Social Media (we’re on Instagram and Facebook ). We are here to help.


Global Citizen link on Equity & Equality. Please note, by sharing this link we are not declaring any affiliation with, or support of, the organisation Global Citizen.

Disclaimer: This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply. © 2021

4 Tips For Finding That Perfect High Yield Property

By Kola Dev • March 19, 2025
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. 1. 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! 2. Look for dual income properties such as a house with a granny flat. You can potentially have two streams of rent coming in, meaning the chance for a higher rental yield significantly increases. 3. Have you thought about looking rurally? Country towns offer some great properties at a low price and because the cost of living is low, the rental yields tend to be higher. 4. Always think forward. Be on the lookout for up-and-coming areas and ask yourself if they’ll still be flourishing in five years time. At the end of the day, you need to be realistic. Just because a property has a high yield doesn’t mean it’s going to be a great investment. As a mortgage broker, I can talk you through your options for investment loans so you can see what your monthly outgoings might look like. Please call our team on (03)8657 8664 or email reception@futurefinancegroup.com.au to arrange an appointment.

7 Quick Ways to Upgrade Your Home

By Kola Dev • March 19, 2025
The continuing boom in property prices has tempted many homeowners to invest in renovations to maximise the value and then put their home straight on to the market. There’s no doubt you stand a better chance of enjoying a great return on your investment if you modernise your home. Properties that enjoy a mix of the traditional and the contemporary are in big demand among today’s buyers and nothing ticks the boxes more than a brand new kitchen or bathroom. Two increasingly popular features at the moment are a dedicated home office and a design that connects the indoors with a garden or entertaining area. But renovation projects of this size can become expensive. If your budget doesn’t allow for large-scale upgrades, there are plenty of ways to enhance the value of your home at little cost. Here’s a seven-point guide to upgrade your home. 1. Break out the brushes It’s amazing how a fresh coat of paint will improve a property. Don’t focus only on the walls but attend to the skirting boards, ceilings and architraves. Select neutral colours as these make rooms feel bigger. 2. Go green Small-scale improvements to your gardens work wonders. Focus on the front yard as this creates an all-important first impression. 3. That’s entertainment If your property lacks an area to entertain, this is a great low-cost project to enhance your property’s desirability. Consider adding a deck or a barbeque area. 4. Floor ’em A mixture of different floor types can make a home feel bitsy while a home with consistent flooring creates a great sense of flow. Replacing the floor can be a painful project but you’ll be amazed how much bigger your home feels. 5. Say it with storage You can never have too much storage. A bedroom without built-in robes is just asking for clothes on the floor. Think about storage in bedrooms, bathrooms, kitchen and laundry and looks at ways to create clever storage solutions in nooks and under the stairs. 6. Kitchen upgrades If yours is a little tired, don’t worry – you don’t have to rip it out and spend big dollars. Consider replacing only the doors, drawers and handles. You’ll achieve a transformation at the lowest possible cost and it will feel like new. 7. Unbeatable bathroom Like the kitchen, this can be an expensive renovation. You can avoid replacing tiles by using a professional company to spray-paint them. This treatment can also be applied to sinks, baths and showers. New tapware and shower screens complete the refresh for a fraction of the cost of ripping and replacing. Please call our team on (03)8657 8664 or email reception@futurefinancegroup.com.au to arrange an appointment. *This article is provided for general information only and does not take into account the specific needs, objectives or circumstances of the reader. Before acting on any information, you should consider whether it is appropriate for your personal circumstances, carry out your own research and seek professional advice.

7 Tips for Organising Your Finances Before You Buy A Home

By Kola Dev • March 13, 2025
There are many tips for buying a property, but there’s one essential element that no one can avoid - getting your finances in great shape before you start. Knowing what you can afford is a critical element of finding your first home or the next one that takes you higher up the property ladder. The most successful buyers begin their search with their finances in order and a pre-approval letter from their bank or lender. They know their budget and tailor their efforts accordingly. There’s no greater waste of time than visiting properties that are beyond your price range. Using a mortgage broker can help you shortcut the hours of research through various banking products and good brokers have detailed market knowledge and can offer an array of products. We can suggest the loans most suitable to your circumstances and assist you with paperwork, and review your credit history. We can also help you understand any grants or tax exemptions from state and federal governments that you may be eligible for. Below are a few tips for securing the finance that will help you find your dream home. 1. Clarify your finances If you’re a homeowner, you’ll need to obtain a valuation on your current property and provide proof of current earnings. A first-time buyer will ideally have 10% of the purchase price as a deposit to get the best interest rate and conditions for their first loan but the more the better. Money for legal fees, property inspections and taxes need to be set aside, too. Make sure your tax returns are up to date to prove your earnings. It will make life easier. 2. Low barrier to entry You can obtain a conventional loan with as little as 5% of its total as your deposit. Some government-backed loans do not require a deposit. 3. It pays to save The more you save, the less you borrow. And that means lower your monthly repayments for you over the term of the loan. 4. Go for a grant First-home buyers should research the current grants from various levels of government that are designed to encourage them into the market. 5. Credit crunch You’ll need a good credit history to be attractive to lenders. Check yours out by using companies such as Experian and Equifax. If your track record is not the best, we can discuss ways to address this. If errors appear in your credit history, dispute them immediately. 6. Find the right loan You can save thousands of dollars by choosing the right mortgage product for your situation. It pays to shop around and make a note of not just the interest rate but the fees that come with it and other services that may be offered. As your mortgage broker, we can guide you through this process. 7. Be pre-approved A written undertaking from your lender will help you focus on what you can afford, as well as signal to a prospective seller and their agent that you’re not kicking tyres. Watch out for lenders who will only “pre-qualify” you, as this represents only an estimate of what you can afford and does not offer any guarantees of intention to lend. Please call our team on (03)8657 8664 or email reception@futurefinancegroup.com.au to arrange an appointment.
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