Should Your First Home be an Investment Property?

Becoming a Rentvestor may be a good option

Saving enough money for a deposit and then buying a home is a commonly held aspiration in Australia.

The urge to splurge on real estate is certainly being helped along by the surge in property prices in our capital cities.

This growth is a double-edged sword however, as while it benefits those who already own property, it’s becoming harder for first home buyers to get a foot in the market.

According to the Australian Bureau of Statistics, the total value of property investment in our country per month is in excess of $13 billion.

Besides more opportunity to enjoy your mum’s unbeatable cooking, is there financial sense in staying at home with the folks and making your first home a property investment to rent out?

Extra Income

If the rent that your tenants pay is more than your weekly home loan repayments, you will receive an additional income.

You can use this to cover your own living costs or make additional payments to your mortgage to achieve financial freedom faster.

Deciding on the amount of rent you charge to live in your investment property is a tough one – too high and you won’t be able to find tenants, too low and you will miss out on potential profits.

Fortunately, a real estate agent can help you find the right balance.

Tax Deductions

There are a number of tax benefits that have been made available in an effort to make the upkeep of a rental property more affordable for investors.

There are many other potential tax deductions obtainable for property investors, none of which are available to owner occupier households.

What Should You Look For When Buying an Investment Property

The Australian Securities and Investments Commission asserts that while homes in regional and rural areas may not have the best capital gains, they can often provide good rental yields.

Within the capital cities, instead of searching for a home you want to live in, you should aim to purchase a property that suits the type of tenant in that area. Proximity to transport, amenities, schools and the current rental demand are all good places to start with your research.

It’s Not All Roses

There are a few downsides to purchasing an investment property as opposed to buying your first home to live in.

The First Home Owner Grant can be instrumental in getting you up on the property ladder, but it is only accessible to owner occupier households.

Furthermore, unless you’ve lived in your investment property for a sustained period of longer than 12 months, you will have to pay a capital gains tax when selling.

If you’re undecided, talk to your financial adviser as they will be able to simplify the choice for you.

Winter Warming Ideas for the Home

Tips to save on heating

Sorting out your heating is obviously the most significant factor in creating a comfortable indoor environment in winter, and there are many great ideas within these pages. But heating your home can come with costly energy bills, so there are a few things to consider.

If you use an air-conditioner, you can save a significant amount of power by dropping the thermostat a degree or two. Nobody expects you to wear a beanie and scarf inside, but if it’s getting a bit cool, put on a jumper or a vest or pull a quilt or throw over you before rushing to heat the room. While you’re feeling frugal, if you have a wood-burning fire, why not save energy by foregoing the clothes dryer this year and drying your clothes with heat from the fire instead?

It’s also important to stop heat escaping. Insulation is paramount here, but you can help the process by drawing curtains so heat can’t escape, and closing doors to rooms that aren’t being used. Stop draughts with old-fashioned sand-filled snake draught stoppers and avoid using exhaust fans that suck the warm air out of the room. Ceiling fans set to “winter” push air back down, helping the warm air circulate.

If you’re looking at installing new heating, remember to consult the experts before making any expensive decisions. There are many things to consider before installing heating, such as whether you’d prefer air-conditioning or a fireplace and whether to choose gas, electricity or wood burning. The size and shape of the area you intend to heat also needs to be considered, and experts can offer the most energy-efficient option that’ll work in the space you’re trying to heat.

Tips to create winter warm decor

Staying warm and cosy isn’t just about heating options. Creating a cosy and comfortable environment at home can help keep the winter blues away.

Ironically, when it’s grey and muddy outside, many of us turn to neutral winter decorating schemes. But using browns and greys inside when it’s like that outside can be depressing. Instead, imagine how you feel when you see someone sporting a rainbow-hued scarf or beanie on a chilly day. A splash of vibrant colour in your decorating (be it cushions or a quilt) can be just as invigorating.

With the current trend towards crocheting and knitting, now’s the time to whip out some vibrant yarns and create a colourful throw, or pull nanna’s crocheted granny-square afghan out of storage and put it over the sofa. Use rich, textured fabrics such as knits, felt, flannel, fake furs and chenilles in your winter decorating to bring a cosiness to your home that can’t be achieved with cool cotton.

As usual, accessories are important and you can make a statement with items such as a group of candles or indoor plants (lovely touch of greenery when trees are bare outside). Just make sure you have enough room to put your book and hot drink on the coffee table.

The simple addition of a few quilts and some extra cushions on the sofa encourages the family to snuggle up together (which means you only have to heat one room at a time!). When it’s too cold to venture out, create quality time at home with yummy treats, DVDs, video games, jigsaw puzzles and board games. The shorter days lend themselves to spending time at home as a family.

Tips to stay healthy

It can be tempting to let your health and beauty routines lapse when there’s no skin on show, but taking care of yourself all year round prevents panic when the weather warms up. Care for your skin, which can dry out in artificial heat, with plenty of moisturiser. Keep a bowl of water in a room with a heater so the water evaporates into the air.

Warming stews, soups and casseroles make perfect winter fare, but remember to bulk them out with vegetables and beans. Trade chocolate and cream desserts for fresh or tinned fruit; there may not be the wonderful selection we have in summer, but there are still many delicious cooked dessert options that aren’t too unhealthy.

While it’s tempting to forget the exercise when it’s too cold or wet outside, you can still exercise at home. Invest in a few exercise DVDs, consult the internet for exercise routines or borrow the kids’ Wii and get fit that way. On the plus side, you’ll be less likely to use the heater if you’re sweating.

We buy houses in Grand Prairie Tx