Investors

A Guide to investing

50% Stamp Duty reduction for NSW residents

If you're buying a newly built home for less than $600,000 in NSW you could be eligible for a 50 per cent Stamp Duty reduction, which would save you up to $11,245. This government initiative - known as the NSW Housing Construction Acceleration Plan (HCAP) - was introduced for those who are not first home buyers to help stimulate the property market.

HCAP is available for a limited time only and will be reviewed on 31 December 2009. So find out if you qualify and speak to one of our lenders to get the ball rolling.

Use our Stamp Duty Calculator to determine your Stamp Duty costs.

Get ahead of the game

Knowing your tax implications and concessions could help you get ahead. And who doesn't want to save on their tax bill? Make sure you check these out with your accountant or financial adviser to see if you're eligible:

Paying interest in advance

Prepay up to 13 months of your loan's interest in advance and you may be eligible to claim it on your current year's tax.

As a bonus you'll generally also get the benefit of a lower interest rate by paying in advance.

Maximising tax deductions

Keep your receipts and records of all home loan related fees and charges on your investment property as they may be tax deductible.

You can offset many property related expenses against your rental income too - including rental expenses, repairs and maintenance costs, borrowing expenses, interest charges, allowances and depreciation.

If your investment property is interstate you may be able to claim the cost of travel to inspect the property once or twice a year.

The best way to be sure is to check with your tax accountant to see if you're eligible for any of these benefits.

Is negative gearing the way to go?

This term has been hailed a wise investment strategy for the savvy property buyer. But is negative gearing right for you? Negative gearing is when the income you receive from your investment property is less than the interest on the loan and other deductible expenses. You wear the loss because you gain a tax advantage.

The long-term aim of this strategy however is for the value of the property to increase above the initial losses, leaving you with a capital gain and a healthy profit.

Choose the right investment home loan and move ahead

A Portfolio Loan could be a good choice for investors. It lets you use the equity in one property to fund other investments. Other benefits include:

Use your increased total equity to continue boosting your borrowing power and adding to your portfolio.

You don't need to apply for a new loan every time.

It gives you up to 10 sub-accounts, allowing you to separate each investment, making it easy to manage your paperwork during tax time.

Want to know more? Speak to one of our lenders.

Use our Home Loan Product Selector to find a more suitable product or view our suggestions:

Our suggestionWhat do you need from a home loan?

Portfolio LoanYou want to create wealth to secure your future.

Standard Variable RateYou want flexibility with a full range of features.

Fixed Rate Home LoanYou want to budget for the future with confidence.

Advantage PackageYou want an all-in-one package that offers savings on your home loan, credit card and transaction
accounts.

Basic Home LoanYou need a straight forward, easy-to-use home loan.

Low Doc Home LoanYou want a home loan but are having trouble providing documented proof of income.

Low Doc Portfolio LoanYou want a line of credit but are having trouble providing documented proof of income.

Super Fund Home LoanYou want to use your self managed super fund to purchase investment residential property.

A range of eligible home loansYou want to borrow funds to buy an investment property and are a Non-Resident.

Our home loan comparison chart offers a snap shot of St.George home loans and their features and benefits.

What to look for in an investment property

Choosing a property for investment purposes is not the same as choosing a home to live in. Keep the following tips in mind:

Not all titles are created equally - whilst most apartments are strata titles, if you're buying property that's company title make sure you read the fine print carefully. The owners of company title buildings are set up as shareholders in the 'company' and they must vote to decide on various rules including occupancy changes and rental rights. You also have to have approval for most alterations, even within the unit itself.

Choose for rental appeal - even though you won't be living in it, you'll want to make sure the property has features that most people look for, including internal laundry, proximity to transport, security, car space/garage, balcony.

Don't over do it - it's possible to spend more money on renovations and upgrades than you're ever likely to see in returns. Make sure you are realistic about how much someone will be prepared to pay when you eventually come to sell. You want to do enough to seduce buyers but not so much that you're out of pocket.

Keep your finger on the pulse - when property prices are dropping and rents are rising, it may be time to make the most of economic conditions.

Do your homework - if you're buying in an area you're unfamiliar with, research it well. Look at data on property prices in the area and rental yields as well as vacancy rates. Speak to the local residents and shop owners and even the council to find out as much as you can about the place. There's a lot of information out there to help you, like RP Data's report on the best suburbs to buy in around the country.

Sign up for email updates and access RP Data's National Property Hotspots Report, valued at $249, for FREE.

Securing your new investment property

You can secure your investment property by using the equity in an existing property.

A Deposit Protect Bond is an alternative to a cash deposit. Essentially it's a guarantee from St.George to the vendor that you, the purchaser, will pay the deposit, in addition to all other costs, on the day of settlement.

The way it works is simple. The bond - 10% of the contract price - is handed over to the vendor's solicitor when the contracts are exchanged. At settlement the full purchase price for the property (including the deposit amount) is paid and the bond obligation is cancelled.

Some of the benefits of this type of deposit include:

You can secure a new home or investment property using the equity in an existing property.

You don't have to have ready access to cash for the deposit.

It's convenient when attending auctions.

It can be approved within two hours in most cases.

A St.George Deposit Protect Bond is available for six months from the date of issue. Call the Deposit Bond Team on 1300 301 004 for more information or to complete an application.

Insuring your asset

Whether you own one or half a block of investment properties it's critical to have adequate insurance to cover yourself if anything unforseen comes your way.

Landlords insurance offers cover for accidental damage, legal liability, loss of rental income, rent default as well as theft by tenants.

Get a quote on Landlords insurance now.

Home Loan Protection pays a lump sum to cover your home loan if you pass away, are diagnosed with a serious medical condition or are permanently unable to work.

For more details, ask one of our lenders or call 1300 301 883 and choose option 3.