Article 1 - Build, renovate or buy?

Each year Australians spend billions of dollars renovating or rebuilding their homes as they seek to improve their lifestyle, make adjustments to suit their changing circumstances, or simply enhance the value of their home.

As we grow in our relationships, our needs often change with regard to the home we live in. Our financial situation may improve which provides greater accommodation options, or indeed we may add to the family unit by having children.

Deciding between the options of building, renovating or upgrading your home can be quite confusing.

A popular option these days is what’s commonly known as ‘knock down rebuild’. For many people building in a new subdivision is not appealing, many prefer to remain in their current street, enjoying the infrastructure, friends and family that have become familiar with. Knocking down your existing house and building a new one can be the best of both worlds – a new home in the suburb you love.

Renovating the family home has been a regular pastime for Australian families for decades. And it can be a less expensive alternative to selling and buying a new one. If you are looking to undertake a major renovation to your home, it’s important to ensure you are not overcapitalising on that property ie. spend more money on the renovations than what they add to the value of your home. Ask the opinion of some local real estate agents and an independent valuer before breaking ground, to give you greater peace-of-mind before starting.

Lastly, the prospect of undergoing major renovation or building a house, can be quite daunting and time consuming for some. Upgrading your home to suit your changing needs can be an alternative. It can often be less time consuming but it may mean that you don’t necessarily get exactly what you want in terms of location or house. There are also additional costs involved in buying a new property such as stamp duty.

Whatever your situation or preference, financing the decision is important. Obviously interest rate is of supreme importance, however ensuring the structure of your loan meets your needs in every way is also important. Engage your Resi lending specialist to help you every step of the way - it can save you thousands!

Article 2 - How to winter proof your house

As the winter chill approaches, it’s a good idea to winter-proof your house. This will increase your comfort, save money on heating bills and enhance the energy efficiency of your house.

Being inside a warm house on a winters day is a very comfortable feeling. Even more gratifying is the knowledge that you have made your house warm efficiently and cost effectively.

Insulation

The most important step to achieving heating efficiency in your home is through installing insulation. Insulating your walls, ceilings and floor helps keep warmth in the winter and cool in the summer. Of these, insulating your ceiling is by far the easiest, unless you’re building a new house where you have good access to interior walls and floors. Roof insulation comes in a variety of forms. Simply measure your ceiling area and then head down to your local Bunnings store and discuss the different product options installation process with their staff.

Correct insulation can effectively reduce your heating and cooling costs by up to 50%, therefore helping the environment.

Your Heater

Having an efficient and well maintained heating system will reduce costs and increase comfort. There are a number of steps you can take
 Heating different zones at different times will enable you to heat only the rooms you are using rather than heating the whole house.
 Service all heaters according to the manufacturer’s instructions.
 Install timer or programmable thermostat to turn your heater on and off automatically around 20 to 30 minutes before getting up in the morning or getting home in the evening.
 Close doors to unheated areas, or hang curtains across open archways leading into other rooms.

Draught-proof your home

In winter, your heating costs can increase by up to 25% because of draughts. At the end of summer check doors and windows for draughts. Seal them with weather stripping along with external doors, vents, unused chimneys, fireplaces and air conditioning unit. You can choose from a wide range of draught-proofing products such as weather strips and window and glass silicon, all available from your local Bunnings store.

The Little Things

Below are a few ‘little things’ you can do that will winter-proof your house, reduce costs and wasting heat.

• Install an efficient hot water system and fittings
• Use heavy drapes in front of windows to retain heat
• Maximise north facing windows to allow winter sun to heat the home 

Article 3 - The D'Aquino's story

In 2003, Charles and Patricia D’Aquino applied for a loan with another prominent non-bank lender to purchase a block of land and build their new family home.

“The rep told us it would be an easy loan to organise as we almost had enough to purchase the land in savings,” Charles recalled. “But seven weeks later we hadn’t heard one word back from him.”

Understandably, the D’Aquinos were frustrated by the lack of communication from the lender and growing slightly anxious about securing their property and starting work on their new home.

Charles was in the Sydney suburb of Penrith a couple of months later and, sceptical, but with nothing to lose, he popped in to the local Resi office to talk to them about his situation.

“As with the previous lender, Resi told us our loan requirements were very simple,” said Charles. “And that the loan would be all finalised in a week.”

Unlike their previous experience, however, Charles and Patricia received daily updates on the progress of the loan and seven days later the loan was approved.

“We were pleasantly surprised when our loan was approved so promptly and within the promised timeframe,” he said. “Particularly considering what we had been through before.”

The D’Aquinos were able to purchase the land and build their family home in country NSW, which now accommodates their family of six. The redraw facility on their loan provides a useful saving tool, which they can access when they need extra funds.

“In addition to the first-class service we received from Resi, the loan repayments and interest rates were the best at the time,” added Charles. “And continue to be very competitive.”

Charles has become somewhat of a Resi customer advocate following his experience with them.
“My sister has now changed over to Resi as well and we are all enjoying the benefits,” he said.

“I was so impressed with Resi and in particular the guys from the Penrith office, that I contacted Ray Hadley on 2UE and he gave them a good ‘freebie’ plug over the radio,” laughs Charles. 

Article 4 - Interest in Advance

With the end of the financial year approaching, some forward planning for property investors may save thousands in tax.
Australians have embraced property investment more than any other country in the world. Not only can investing in property provide you with capital gain over the long term, it can provide healthy tax benefits year on year.

The interest paid on an investment loan is classed as a tax deduction. In the main, property investors usually claim this deduction at the end of each tax year, however there is also an option to pay up to a year’s worth of interest on your investment loan in advance ie. Within this current financial year. 

This means that instead of paying say $15,000 in interest over the 2008/2009 year, you can pay that $15,000 by June 30 2008 and claim it all in this year’s tax. 

Why would you pay interest in advance? 

There are a number of advantages to paying interest in advance depending on your circumstances. Some potential advantages include: 

a) Paying interest in advance can help you reduce your taxable income for the current year. This can be particularly advantageous if you happen to earn less in one financial year than others eg. If you plan to take maternity leave in the next financial year, it’s likely you will have less income from which to write off investment expenses. Paying additional interest this financial year when you are still earning a full salary would make sense. This can maximize your tax benefit over the two years.
b) You can decide what proportion of your loan you wish to pay in advance and hence by how much you want to reduce your taxable income.
c) If you pay a fixed rate, you can have certainty that your repayments on that loan have been fulfilled for the next financial year.
d) You may be able to obtain a discount on the current interest rate when paying in advance.
e) You can keep doing this in future years - instead of claiming two years’ interest this year and no interest next year, you can pull forward interest payments again next year and each year until your situation changes. 

Some important considerations include: 

a) The significant cash outlay at the one time - this may affect your cash flow.
b) Your variable rate could increase during the financial year to a different rate. The increase would need to be paid for during the financial year it occurs. Usually using a fixed rate is a good way to avoid this issue.
c) If you decide to sell the property during the year, you would have already paid and claimed the interest on it for that entire year. 

Paying interest in advance on your investment property can be a useful tool to effectively manage your taxable income. However, to benefit from this strategy this year, a decision will need to be made soon - as all loans need to be processed before June 30 2008 to be eligible. 

Always ensure that you understand the process and seek advice from your financial planner or accountant on all aspects of this strategy, including costs before making the final decision. 

At Resi, the loan process for interest in advance is quite simple and your lending specialist is at hand to help you with more information if you are interested. 

Alternately, speak to Resi customer service on 1800 243 000. 

Paying interest in advance can be advantageous for property investors. However it is important to get the appropriate advice before moving forward. Please, always consult your accountant before making any decision regarding your investment property.

Article 5 - Smarter not harder!

Innovative new product, Smartrock, gives you an easy way to get all the benefits of a natural stone look around your home – inside and out.

Smartrock is lighter in weight and cheaper in price than natural stone and when used indoors for architectural cladding and rock walling, it helps to keep your house warm and reduces noise. So it really does mean you can work smarter, not harder when it comes to improving your home.

Made of cement, Smartrock is a rock veneer that can be used for pool or BBQ areas, water features as well as in your home for fireplaces and in kitchens and bathrooms. There are 4 great designs and there is a huge range of colours and blends so you will have no trouble finding the right design, colour and shade you need.

Smartrock is easier to use than real stone and can be installed simply to create an authentic look of actual stone at a fraction of the cost. For more information visit www.smartrock.com.au