There are three main ways you can make money on property: Rental yield Capital growth Growth on rental yield Let’s have a chat about the first two. Rental yield A property’s rental yield is calculated by dividing a property’s annual rental earnings by its valuation. I often argue that the better way of calculating rental […]
Tag: mortgage
Home loan products: Redraw facilities and offset accounts
For each day that you owe money to the bank on a home loan, interest accrues on that loan. You make periodic home loan repayments and if your home loan is a P&I loan (see Home loan products: P&I vs IO loans), the value of your loan, the principal, will slowly trickle downwards. What if […]
Home loan products: Variable vs fixed rates
I’d like to say we’re almost done with home loans but if I did I’d be lying. There’s so much complexity out there on this topic and it has such a profound impact on your cash flow that I think everyone has a right to know as much as possible before taking the plunge. So […]
Home loan products: P&I vs IO loans
When I was younger (I wasn’t the coolest kid) I used to wonder why anyone would take on a massive home loan and opt to pay off the interest only. When you take on a home loan, you can typically choose from P&I (principal & interest) and IO (interest only) products. Here’s what they mean […]
Home loan products: Owner-occupier vs investment loans
Whether you’re buying your first home or you’re looking to invest in property, chances are you aren’t quite wealthy enough to fork out the hundreds of thousands or even millions of dollars it can cost to buy one outright. Even if you do happen to have a seven figure bank balance, you probably won’t even […]
What to do with $10k right now
Here we take a look at what an average person with an average risk profile should do if they had managed to save $10k and didn’t know how to best make use of it. Please understand this is not financial advice, it does not take into account your personal circumstances and it’s only here to […]
Home equity
What is equity? How much equity should I have in my home or investment property? How does equity fluctuate? What does ‘negative equity’ mean and could it affect me? Strap in for answers to all the questions you never asked. What is equity? Say you own a 100sqm rusty tin shed with no ceiling in […]
Buying your first home – Part 1 of 2
Let’s settle the age old debate. Home ownership or smashed avo and bottomless mimosas? Young Australians are becoming more frugal these days and it excites me to say that financial literacy is improving. However, home ownership rates in Australia reached an all time low in 2016 and unfortunately, this trend is getting worse. But we’re […]
Leverage
Leverage is the reason this not-so-humble smashed avo enthusiast returned just shy of 200% last financial year yet still didn’t come anywhere close to the real dollar return made by any risk-averse property investor during any single boom year period. I invest with my own capital. Given I’m a lazy, instant gratification-seeking, instagram influencing (okay this part’s […]
The good, the bad and the subprime
Debt finances the construction of mega-structures, innovation, many unnecessary wars, and the rapidly-cooling latte of this not-so-humble smashed avo enthusiast. Debt in its traditional sense is often shunned by millennials. We no longer have faith in our financial institutions. We’re no longer naive enough to believe the narrative that banks are acting in our best […]
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