Mortgage Brokers – What do they offer the property investor?

Mortgage Calculations Image

In today’s post I’m interviewing Theo Angelopoulos from ‘The Loans Analyst’ on mortgages, rates and offers from a property investor’s point of view.

Hi Theo, lets dive straight in, I have 8 key questions for you:

Q1. What are your thoughts on the current interest rate situation?

It’s the most competitive interest rate market ever; record low rates with potentially another rate cut by year end. To find the low rates you need to look outside the big 4 or negotiate with your bank for a better deal.

Q2. Is it a good time to ‘fix’ the interest rate?

Fixed rates are so low you may consider locking in a portion, but be careful when locking in rates as you do lose some flexibility. As an investor in a decreasing rate environment you should remain agile just in case you need to change lenders, either to fund the purchase of another investment property or get a better interest rate on your loans.

Q3. What are some of the indicators that rates are about to change?

The key indicators to track would be the inflation figures. If inflation remains low, another rate cut may be on the cards. Also keep an eye on property values, if there is a sudden surge in property values expect the RBA to slow it down by increasing rates, but I can’t see that happening anytime soon.

Q4. What is the most important thing to know about mortgages?

All banks are not created equal. Every bank has different credit policies, interest rates and appetite for investor loans. Last year we saw APRA impose tighter lending standards in order to slow down the growth in property investing. However, over the past couple of months, banks with a low exposure to property investors have changed their lending policies offering better incentives to increase their market share. This is why you need to shop around and review your property loans every 2 to 3 years. Rates and conditions change, what was good when you first took out your mortgage may not be the best for you now.

Q5. What are the main lending policies for investors to be aware of?

Recent changes to lending policies have made it more difficult for investors to grow their property portfolios. The main change has been around borrowing capacity. Investors with 2 to 3 properties are finding it difficult to buy the next property. The difference in borrowing capacity between lenders can be measured in the $100,000’s. Seeking the advice from a loan structuring expert is paramount. Investors are also paying higher interest rates for their loans compared to owner occupiers. And, if you are paying interest only, you may also notice a slightly higher interest rate.

Q6. Explain re-financing and who should consider it?

Refinancing is simply swapping your current property loan to another lender. Apart from increasing the size of the loan to buy another property, you would want to refinance to get a better deal. There are very competitive home loan deals at present and you could potentially save thousands of dollars by refinancing. If it’s been more than 2 years since you reviewed your home loan, you could be paying more than you should. Although there have been many interest rate cuts, not all of the banks have passed them on to their customers.

Q7. Can you share some special offers in the market at the moment?

If you’re a property investor looking to borrow no more than 80% of the value of the property and prepared to make principle and interest loan repayments, I have a couple of lenders offering extremely low rates looking for investors wanting to pay down their debt.

If you are an owner occupier with a home loan less than 80%, you are a PAYG employee (i.e. working for someone else) and have been with your employer for 12 months or more, then I know of one bank that is offering the lowest variable rate home loan I have ever seen.  It also comes with 100% offset account, no application fees or annual fee for the life of the loan. It’s very popular and I’m not sure how long it will last.

Q8. What makes you different?

My smile and that I love helping people to buy property and create wealth through property investing.

About Theo

Theo is founder of “The Loans Analyst”. A premium mortgage broking business that has been helping clients to buy property and get a great deal on their home loan for over 10 years. Theo is  passionate about property and a property investor himself. Theo is a member of Property Investment Professionals of Australia (PIPA) and full member of the Mortgage and Finance Association of Australia (MFAA). His office is located in the heart of the Sydney CBD and always happy to help aspiring property investors get into the market. Theo’s qualifications include Bachelor of Commerce degree, Advanced Diploma of Financial Planning and Diploma of Mortgage Broking.

For more information or to contact Theo, visit his website HERE.


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Questions To Ask Your Accountant Before Buying Property

Huffington Post Australia (questions)

“Buying an investment property is an exciting experience. But, before you set out to become a landlord, you should consider asking your accountant for their valuable expertise.”

It’s always nice to be quoted.

Read the full Huffington Post Australia interview HERE.







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Failing to Plan Is Planning to Fail

Property management is more than collecting rent and organising repairs.

An investment property requires planning and follow through.

There are many events that need to be scheduled over the course of a tenancy. For some events the reminders come in the form of invoices such as Council and Water rates. But even these need to be scheduled to make sure they get paid on time.

Missing deadlines can be costly, for example, forgetting to pay the insurance can put your whole investment at risk. Overlooking rent reviews means you are missing out on potential income whilst missed routine inspections may mean the difference between a simple timely repair and a costly emergency.

It’s easy to create an annual calendar on which you can record the events for the year and check them off as they occur. This way nothing gets missed and once you know everything is covered, you can relax.

The dates you’ll want to monitor include:

o   Tenancy expiry date
o   Routine inspections
o   Rent due dates
o   Insurance due date
o   Smoke alarm inspections
o   Rent review date
o   Pest inspection
o   Pool and garden maintenance
o   Taxation
o   Council rates due dates
o   Water rates due dates
o   Strata levies due dates
o   Dates to invoice tenant for water usage
o   Dates to follow up water usage invoice
o   Budget review
o   Regular maintenance

Add any event to this list that is specific to your property that is necessary for the protection and maintenance of your property and income.

For the financial component to planning see our blog “Budgeting and Expenses”

Do you know what’s due or coming up this month?







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Managing your property investment

Property Management written on blackboard

How involved are you in the management of your investment property?

Managing an investment property requires many tasks to be scheduled and carried out. Collection of rent, routine inspections and attending to repairs are just some. Responsibility for these tasks can vary from landlord to landlord.

There are however four basic types of involvement.

  1. Complete do-it-yourself

This means you handle all aspects of managing the property, from finding and screening the tenant to handling repairs, maintenance and all of the accounting.

The most useful skills in property management are common sense and a willingness to understand and compromise.

At this level you will need to understand the tenant’s rights, your obligations as a landlord and applicable documentation.

Apart from understanding the applicable legislation, you will need to have a flexible timetable to allow for problems when they arise. Repairs, particularly emergency repairs, need to be acted on quickly. Problems that come up may require many hours negotiating and possibly time at tribunal hearings.

The two main benefits of this style of involvement are having complete control over your investment and saving on agent fees.

For a closer look on managing deadlines see our blog “Failing to Plan is Planning to Fail”

  1. Do-it-yourself management with some outsourcing to an agent

This level of involvement is the same as the first except you outsource some tasks.

Finding a tenant and attending to the initial documentation are the most common tasks that DIY landlords hire an agent to assist with. The minimum fee for finding a tenant is usually two weeks’ rent and there are many agents that offer this service.

The benefits and problems of this level of involvement are similar to the previous level with some added agent fees for the services you prefer an agent to do.

  1. Professional property manager under your supervision

This is where you engage a professional property manager to do all the work and they report back to you for all approvals. You make all the decisions and they carry out all the tasks. The agent is then responsible for complying with all relevant legislation, finding a tenant and managing the property. When a problem arises, they contact you for instructions, then take care of it.

The agent, in effect, becomes fully responsible for ensuring all aspects of your investment are looked after, with clear communication before and after completion. They handle all contact with the tenant, giving you a clear buffer and access to professional advice before responding to problems or tenant requests.

The agents fee is an added expense but it is fully tax deductible. However, keep in mind that not all agents are the same and you may still need to manage the agent.

  1. Professional property manager with clear written parameters

Sometimes, a landlord has no desire or available time for anything other than emergency issues and engages a property manager to undertake all tasks.

The property manager is given authority to undertake these tasks and reports back to the landlord on completion. This allows the property manager to approve repairs up to an agreed value, review rents as appropriate, negotiate with the tenant and attend to all the necessary duties to keep your property running smoothly and profitably.

This type of arrangement needs a clearly documented and comprehensive schedule, monetary limitations and a plan. Both you and the agent need to be clear on who is responsible for what and when.

Most investors start with a level-three involvement and slowly allow things to slide into a level-four arrangement. As time passes, they tend to take less and less of a hands-on interest in their property and rely more and more on the agent. As the transition is not planned, there is no schedule, guidelines or plan for the agent to follow. This can lead to tasks not being completed and ultimately a neglected property and tenant.

So how hands on are you?

For a simple look at budgeting and expenses see our blog here.







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What is your risk tolerance?

Road Covered in Snow

Does investing in property take you outside of your comfort zone?

Most people understand the concept of living within your comfort zone. When the events in your life are within your comfort zone you feel relaxed and calm. When events occur that take you outside of that comfort zone, that’s when you start to feel pressured and anxious.

And whilst a little pressure is ok, even beneficial, too much will create panic.

How you buy and manage your investment property, which tenants you choose and how high your mortgage repayments are, will have a direct effect on your peace of mind. The higher the risk, the higher your tolerance of risk needs to be. Too much risk and you will become anxious and uncomfortable.

By knowing your position on risk, you can use strategies that will help keep you in the comfort zone. It’s also important to know the risk tolerance of others particularly in the following situations.


When buying an investment property with other people, the risk profile of the partners involved may vary greatly potentially increasing the chances of conflict. If one partner can tolerate a higher risk level they will want to pursue a more aggressive investment strategy, which will make the other partner with a lower tolerance apprehensive and anxious. This dynamic is often the cause of friction between couples where one partner’s ideas are considered reckless and the other partner is accused of stalling. This situation can also occur with other family members and well-meaning business partners.

Financial advice

When seeking financial or property advice make sure the person giving the advice is sensitive to your level of tolerance. If your risk tolerance is low, trying to follow the advice from someone that has a high risk tolerance will result in many sleepless nights. When fear and panic creep in, it will be difficult to keep making the appropriate decisions to maintain a high risk strategy. Alternatively receiving tame advice when you are looking for fast growth will leave you underwhelmed and disappointed.


Some feelings of nervousness are natural when investing your money, but if you feel overwhelmed on a continual basis you may need to look at your strategy and/or seek advice from a property professional that can help minimise the risks. Many times it’s the accumulation of many small risky decisions that add up to one huge headache. Stepping back occasionally can help clarify which areas are making you feel uneasy.

   So, how do you feel about your investments? Are you comfortable?

Thinking of investing? See our previous blog “Mortgage Brokers- What Do They Offer the Property Investor”






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Budgeting & Expenses

Image Budgeting and Expenses

Owning an investment property is no different than owning a business, you must have a financial plan.

Many investors live month to month, using the rent to pay the mortgage and expenses. In some months there’s money left over and in some months there’s not enough. This type of arrangement adds an enormous amount of stress.

Part of our management services is to prepare a complete plan and budget for every landlord.

By knowing what your expenses are on any given month, you can prepare yourself for difficult times and even the unexpected.

The expenses

o   Council rates
o   Water rates
o   Strata levies
o   Land tax
o   Management fees
o   Postage
o   Leasing fees
o   Lease preparation fees
o   Marketing expenses
o   Insurance
o   Smoke alarm inspection
o   Repairs
o   Maintenance

To work out your own budget:

  1. Make a list of your expected expenses and the amounts.
  2. Determine when they are due, are they weekly, monthly, quarterly, half yearly or annual?
  3. Print the table found here and add the expenses
  4. Total the expenses for each month.
  5. Add your expected income, or rent.
  6. Subtract the total expenses from the rent each month to determine your expected monthly profit.

TIP: Allow some funds for the unexpected and remember to compare this budget with actual costs to make sure you are still on track to your goals.

Download a free Budget Template in our Free Downloads page







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