Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

Joel Robinson

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
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[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

Local Little Bay residents, along with buyers from premium postcodes across Sydney’s affluent Eastern Suburbs, have dominated purchases in developer-builder Urban Property Group’s first Eastern Suburbs apartment development, <a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a>.

The $250 million coastal project, one of the first new developments in the area in several years, has proven particularly popular with downsizers, especially those from Coogee and Bondi. One Double Bay downsizer paid $4.7 million for a four-bedroom penthouse, setting a new local apartment price record in the process.

Buyers have been attracted to the combination of coastal tranquillity, premium design and amenity-rich neighbourhood living. The walkable village setting, along with proximity to three of Sydney’s leading golf courses, New South Wales Golf Club, St Michael’s Golf Club and The Coast Golf Club, has also been a key drawcard.

[smartcode_project:default project_id=112343 project_image_fid=352689]

Built across two low-rise buildings designed by <a href="https://www.apartments.com.au/architects/hill-thalis-architecture-urban-projects-pty-ltd">Hill Thalis</a> and set along a lush, landscaped green spine, designed by leading landscape architect <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>, ESTE Little Bay offers a collection of one, two, three and four-bedroom residences with interiors by Richards Stanisich.

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> Sales Director, Tom McIvor said the response to ESTE has been "nothing short of extraordinary."

“Buyers have been quick to recognise ESTE as a rare opportunity to invest in a coastal sanctuary that offers both seclusion and connectivity to the heart of Sydney,” McIvor said.

[smartcode_project:default project_id=112343 project_image_fid=352687]

<a href="https://www.apartments.com.au/project-marketer/srm-residential">SRM Residential</a> Senior Director, <a href="https://www.apartments.com.au/project-marketer/srm-residential">Clayton Ross</a> said the local market has responded incredibly well, driven by ESTE’s exceptional location and the rarity it offers.

“We’ve seen strong interest from a variety of buyer groups, all of whom are drawn to the exclusivity and quality of the build and construction by the 4.5-star iCIRT-rated builder / developer, Urban Property Group. There’s truly nothing else like it along Sydney’s coastline.”

[smartcode_project:default project_id=112343 project_image_fid=352690]

The project also includes robust buyer protections, including Resilience Insurance’s Latent Defects Insurance, providing 10 years of structural cover, and an independent iCIRT-rating of the developer.

“The iCIRT-rating adds another layer of confidence,” Ross added. “Buyers see it as a safeguard for their investment and their lifestyle.” A highlight of ESTE’s offering is its exclusive wellness amenities, including a heated rooftop infinity pool and outdoor heated spa, a state-of-the-art Technogym fitness centre, and a sauna.

<a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a> is topped out and is on track to complete towards the end of 2026, with residents moving in before Christmas.

[smartcode_project_cta:default project_id=112343]

Eastern Suburbs buyers snap up ESTE Little Bay apartments

Sydney’s property market is known for high prices, competitive bidding, and mounting pressure on first home buyers. But change is on the horizon.

From late 2025, eligible first home buyers in New South Wales will have access to a new federal government initiative aimed at addressing affordability: the Help to Buy Scheme.&nbsp;

<h2>What is the Help to Buy Scheme?</h2>

The program introduces a shared equity model intended to reduce the upfront cost of entering the property market, particularly in high-demand urban areas such as Sydney.

The scheme operates under a shared ownership structure in which the federal government takes an equity stake of up to 40 per cent for new homes, or 30 per cent for existing dwellings. This arrangement allows eligible buyers to significantly reduce their loan size and avoid the added cost of Lenders Mortgage Insurance (LMI).

Under this model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required. The government’s contribution is not a loan but a co-ownership stake in the property. As such, there is no interest or rent charged on its portion.

Because the government’s equity combined with the buyer’s deposit typically meets or exceeds the 20 per cent threshold, LMI does not apply. The remaining balance, generally between 60 and 70 per cent of the property’s value, is financed through a standard home loan with a participating lender.

The government's equity in the property remains in place until the buyer chooses to repay it voluntarily or until the property is sold. Buyers can buy back the government’s share over time, in increments of at least five per cent, depending on their financial situation.

There is no fixed repayment timeline, but the amount to be repaid will be based on the property's market value at the time of repayment, not the original purchase price.

<h2>How do you qualify for the&nbsp;Help to Buy Scheme?</h2>

To qualify for the Help to Buy Scheme, applicants must meet the following conditions:

<ul>
	<li>Be an Australian citizen at least 18 years of age.</li>
	<li>Be a first-home buyer who does not currently own property.</li>
	<li>Intend to live in the property as their primary residence.</li>
	<li>Earn less than $100,000 per year for individuals, or $160,000 for couples.</li>
	<li>Purchase a property within the regional price caps, currently $950,000 in Sydney, though this is expected to rise to approximately $1.3 million ahead of the program’s launch.</li>
</ul>

While the Help to Buy Scheme does not solve affordability challenges across the board, it does offer a more accessible pathway for a defined segment of the market, particularly younger buyers with moderate incomes who have been priced out of traditional lending routes.

The scheme is expected to commence in NSW in late 2025, as part of a national rollout.

Under the new model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required

Help to Buy Scheme: What first home buyers in NSW need to know

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With the <a href="/news/everything-you-need-to-know-about-australias-25-000-homebuilder-grant-how-much-off-the-plan-homebuyers-could-save">HomeBuilder grant</a> offering eligible Australians $25,000 towards building or renovating their home, many Australians will be engaging with builders - some for the very first time. 

To ensure your project goes as planned, it is critical you work with a <a href="/builders">trustworthy and reputable builder</a>. However, many Australians struggle to know how to separate the good from the bad. 

A history of unscrupulous behaviour 

We’ve all heard of someone who has had a bad experience with a builder or perhaps even had a bad experience with a builder ourselves. The prevalence of dodgy projects and dodgy behaviour by builders is obvious when you examine the statistics. Over the last ten years, new homeowners across the nation have encountered a $10.5 billion bill to fix defects such as leaks, cracks, issues with plumbing, guttering problems and more.

Another serious issue in the building sector is "phoenixing" where a new company is created to continue the operations of a former company which was liquidated to avoid paying debts. In 2017-2018 in NSW, 561 construction businesses were found to have been involved in phoenixing behaviour. Unfortunately, not all phoenixing activity is illegal and until this is stamped out it will continue to leave consumers vulnerable. 

Why the HomeBuilder scheme could make dodgy behaviour worse

The danger is that schemes like HomeBuilder which promise quick cash may incentivise those builders with a history of wrongdoing to continue to perpetuate the same behaviour. Although builders on HomeBuilder projects are required to be licensed or registered prior to the announcement of the scheme this will not fully protect new homeowners against <a href="/news/how-a-proposed-ratings-system-for-builders-could-protect-investors-from-dodgy-developments">dishonest behaviour</a>. 

Another major issue is the length of the scheme. Between the 4th of June and 31st of December 2020, the scheme covers any building contracts entered during that time frame, with construction required to begin within 3 months of the initial contract date. The issue with this is that builders will be incentivised to enter into as many contracts as possible, with chances of taking on an unachievable workload and cutting corners to finish projects. Unfortunately, there are many builders with a great reputation and who consistently deliver high quality builds who will end up being crowded out by those unscrupulous builders. 

How to select a reputable and quality builder 

The good news is that there are countless builders doing the right thing, delivering high-quality projects to budget and to time. Instead of feeling the need and pressure to choose a builder quickly to meet the limited timeframes of the HomeBuilder initiative, consumers should attempt to take the time to do their due diligence to secure a great and trustworthy builder. 

Here are some ways to vet potential builders for your project: 

<ol>
<li>Check the builder is licensed</li>
</ol>
First things first, you should always check that the builder is licensed. In NSW, this is a simple search on the <a href="https://www.service.nsw.gov.au/">Service NSW website</a>. This will weed out any unscrupulous and unlicensed operators. 

Licensed builders are also covered by insurance. In NSW, licensed builders are required to have home building compensation cover for each project over $20,000. This is to protect consumers in the case that the builder can’t finish building work or to fix defects that may arise.

<ol>
<li value="2">Seek out testimonials</li>
</ol>
Ask the builder for testimonials from former clients. If possible, see if you can speak with former clients to get a true picture of what the experience with the builder was like. 

<ol>
<li value="3">Review past projects</li>
</ol>
Have a look at other projects they have completed. Are they high quality? Have there been any defect issues? 

<ol>
<li value="4">Check credit reports and ASIC listings</li>
</ol>
By checking credit reports and <a href="https://asic.gov.au/">ASIC</a> listings, you will be alerted to any debt issues and will uncover any phoenixing behaviour. 

<ol>
<li value="5">Work with a building broker</li>
</ol>
A building broker will undergo a more extensive due diligence process to help you select the right builder. They will have a panel of vetted and accredited builders to choose from and can match you with the right builder for your project. They can also help you avoid any hidden fees or costs and ensure the contract is sound. The service is free for the consumer. 

The last thing consumers need is <a href="/guides/how-to-buy-a-house-in-2021-a-guide-for-first-time-home-buyers">selecting</a> the wrong builder and seeing money and time go down the drain. This can potentially cancel out the financial value of the HomeBuilder grant completely. By doing your due diligence you can make sure you have a trustworthy and quality builder working on your HomeBuilder project and achieve a much better outcome for your building project.
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vivian_48447

How to Select a Quality Builder for Your HomeBuilder Project

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Are you planning a knock-down and rebuild? Or perhaps you’ve acquired an empty lot and you’re planning to build that dream home on it. 

It’s an exciting time - not everybody gets to plan every single detail of their house. You get to plan your fixtures, fittings and finishes. But it might be worth pausing for a while and considering building two dwellings instead of one on a single block. 

Now, there are a few reasons why you should do a dual occupancy project such as this. It is a tactic favoured by Melbourne’s leading <a href="/new-townhouses">townhouse property</a> developers, so it could be the right play for you in terms of generating wealth. 

Let’s take a look at five reasons why you should consider this move. 

<h2>1. Flexibility and Choices</h2>

If you’re building as an owner-occupier, building two residential dwellings on a large lot gives you more flexibility and choices. For example, you could live in one property and rent the other one out. This allows the rental to enjoy some capital growth until you want to sell it for a nice profit. 

You might even choose to build an<a href="/guides/how-to-invest-in-property-in-2020-the-ultimate-guide"> investment property.</a> In which case owning a <a href="https://www.littlefishproperties.com.au/side-by-side-dual-occupancy-designs-melbourne/">dual occupancy</a> would increase your rental yield, and in most cases significantly. If you have aging parents, you could move them into the second dwelling while you live in the first. You can be close to them to provide care as they need it. 

By developing two properties instead of one you are giving yourself flexibility and choice. 

<h2>2. Higher Rental Yields</h2>

If you do choose to rent out both or one property, any tenants who come to live there will pay the market rate for the suburb. This means that if you let out a build you’ve completed, you will get a higher return than if you invested in an existing property. This is because you save by building yourself.

<h2>3. To Grow Your Wealth</h2>

With the right support, everyday landowners can generate wealth by embarking on a dual occupancy development. It is a proven, low-risk way to grow personal wealth. That said, if you do it yourself with no prior experience, it will quickly become a high risk, costly venture that could see you go bust. 

If you’re not prepared to put in some time and effort into learning the ropes it can be a fool’s errand. This is why using a property development project manager is a great idea. If you want to attempt a project like this but are time poor or lack the confidence to go it alone using a project manager is a great option. 

<h2>4. To Gain Leverage for Your Lifestyle</h2>

You might have a preference to live in a certain location, but you’ve found yourself locked out of it due to the cost of real estate there. By undertaking a dual occupancy development, you can use your land to springboard off. You could generate enough profit to buy outright in your preferred location or have enough for a tidy deposit and a lower mortgage to pay off. Building two instead of one will give you the flexibility and capability to make your next move, to where you would rather be. 

<h2>5. Tax Benefits</h2>

Owning multiple dwellings gives you some solid tax benefits, including <a href="/guides/property-depreciation-continues-to-maximise-cash-flow">depreciation</a> allowances which can often result in a ripper tax refund. And if you choose to rent out one of the homes you have the potential to be <a href="/expert-insights/buying/targeting-the-right-kind-of-new-rental-housing-with-negative-gearing-policy-changes">negatively geared</a>.

<h2>To Conclude</h2>

So, there are five reasons why building two instead of one could be the right play for you. You get flexibility and choice. And, if you rent out one or both properties you will get a higher return on investment. At least compared to buying an existing rental property. 

It is a proven way to grow your wealth, but only if you know what you are doing. If you don’t, consider engaging professional property developers to manage the project for you. You can use the profit from building two to move to the desired suburb, and you get to enjoy the tax benefits that come along with it. 

Good luck and happy developing! 

 
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antoniourban

5 Reasons Building Two Instead of One Could be The Right Play

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If you're looking for an investment property which will appeal to families, choosing the type of property in the right suburb will make a difference in the long run.

The question is what are the key elements that make a family friendly suburb appealing to <a href="/developments/wa">Western Australians?</a> And what are some top considerations that families look for when they evaluate buying into a suburb? 

Schools (and childcare)

Proximity and catchment areas of well reputed schools with education facilities from kindergarten, primary and secondary schools is a key factor when a family decides to purchase a home. This also includes child-care facilities available nearby. Suburbs with top performing schools often fetch higher priced properties. 

Closeness to Natural Recreation Areas e.g. Water Bodies/ Reserves

Affordable beach-side living is one of the <a href="/developments/perth-wa">many things that Perth</a> is just blessed with. Suburbs closest to the beach or Swan River often fetch the best prices. There are also lakes and ponds that provide the perfect family play and picnic areas. 

One of the main reasons that families prefer residential areas with a water body is the number of water activities that are provided. From young children to adults, beaches, rivers and lakes provide active fun as well as a great lifestyle e.g. surfing, body boarding, wake boarding, waddling, snorkelling, canoeing, swimming, beach volley and so much more.

Another popular feature is being close to bushland or reserves where families can go for long walks or bicycle rides and explore nature.

Community Facilities

Shopping Centres, Post Offices, Libraries and a Community Centre – all these play an important role in the consideration of suburb to live in. These conveniences will help support the busy needs of families. 

Community centres also provide a way for local families to connect and there are activities promoted by local councils which give social involvement opportunities for the young and elderly alike.

Suburbs which host functions at the local council centre allows for opportunities for families from the neighbourhood to meet and get to know one another. Some popular activities include reading groups for young children, children Lego clubs, local farmers markets, fetes, fairs and other functions as well. Some libraries host book clubs, art classes, writing classes and basic computer classes for free to help their community.

Another added bonus would be having Hospitals and Medical Centres located close by in the event of necessity. 

Especially important for young families are the playground infrastructure. How many playgrounds are there in the suburb? How accessible are they from the residence? Children love to play at playgrounds and or hit balls at parks - this is a necessity for healthy growth. Parents can catch up for chats or go for a beautiful leisurely walk in the park, then catch up for a coffee nearby. 

Crime Activity - Is the suburb safe? 

Safety and security are key features of a family-friendly suburb. In reference to the crime statistics (<a href="https://www.police.wa.gov.au/Crime">https://www.police.wa.gov.au/Crime</a>), you can find out what the person/ property crime rate ratios are and choose investing in certain safer neighbourhoods. As safety is of paramount importance, this list gives you access to specific neighbourhoods (<a href="https://www.perthcrimemap.com/">https://www.perthcrimemap.com</a>/) and how safe it is.

Public Transport

Although this may not be top on the list at first glance but rises in importance as children become teenagers and gain independence by travelling to school by busses and trains. Connectivity to major transportation line should always be considered.

Finally, it is important to bear in mind, the community itself is an important factor of consideration. 

If you would like to know more about the top choices for family suburbs in Perth, feel free to contact us for more information.

<h2>Properties for sale in Perth:</h2>

[smartcode_project:default project_id=7854]

[smartcode_project:default project_id=7836]

[smartcode_project:default project_id=26734]
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Nick Dante

How to locate the right family suburb in Perth

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Congratulations, it's settlement day and you've just reached for a bottle of French Champagne that’s been patiently waiting on ice all day long. You gently loosen the cage, lean the bottle 45 degrees in anticipation for the cork to be set free, followed by celebrations and joy!

Wait a moment, how did this property settlement which you purchased as your dream home or calculated investment for your future come to be?

The settlement of a property is the legal process where ownership formally passes from a vendor to you as the purchaser. In the state of NSW, settlement periods are traditionally 42 days/ 6 weeks from exchanging of contracts for an established property. For an <a href="/guides">off the plan purchase</a>, the settlement period runs parallel with the construction program, progress of the subject property, the occupational certificate being granted authorising the property to be habitable and strata plan registration with the NSW Land Registry Services. 

[smartcode_project:default project_id=6999]

Most off the plan projects will commence sales prior to construction. This is regularly to achieve a set percentage of pre-sales to reach the desired sales target. Once reached, this will most often mark a significant milestone, which allows for demolition and construction works to commence. Demolition, civil works &amp; excavation, columns, and slabs/ levels, the construction topping out (top floor reached), lock-up stage celebrates the building being weather tight and builders transitioning to internal fit-out and final completion of construction are all key industry milestones. 

Leading up to settlement, <a href="/guides">it is always very important to stay organised</a>. Naturally, you will have your own team to assist you, and this will include your lawyer, solicitor or conveyancer; who assisted you in completing due diligence on your paperwork when you exchanged on your purchase as long as 18 months ago. Added to your team, for most purchasers will be your Bank, Lender, Mortgage Broker or Financial Institution by the way of providing finance or a loan on your purchase. Your accountant will also likely be involved at some stage as independent financial advice is always recommended.

What happens if you've just been contacted and invited to come and complete a pre-settlement property inspection? 

This is an opportunity to arrange a convenient appointment to inspect your property and to provide the property agency or developer feedback on any items you feel require extra attention or repair work. It is important to remember construction is human-made and it may be the year 2020, technology has not quite taken over. 

Naturally, items will be found and construction is still a form of art. There could be a chip on a tile, a mark on a wall, and even a squeaky hinge on your front door. Look low and look high, run your eye line along the full length of the walls, open and close cabinets and storage. Turn all lights on &amp; off. Bring a smartphone charger and test all the power points. Write down as many items you would like to bring to their attention. 

[smartcode_project:default project_id=6769]

The entire process is highly subjective, and an extra set of eyes is invaluable in completing your pre-settlement inspection. As backup, don't forget about the carpenter in the family or a close friend who's in the construction industry, or a contact who's recently been through a similar purchasing process or even work in the property industry. If you don't feel comfortable in your know-how or are overwhelmed by the thought of this inspection, there are companies that specialise in assisting with property inspections and this crucial step.

Lastly, here are some <a href="/guides">useful tips and questions</a> to bear in mind if you were to conduct an inspection:

<ul>
<li>Read any communication or construction updates provided.</li>
	<li>Touch base with the property agency or agent who sold the property to you. </li>
	<li>Walk or drive past every now and then to confirm progress with your own eyes.</li>
	<li>As construction is nearing settlement, your legal representative will receive correspondence from the vendor’s side. </li>
	<li>Have your financial pre-approval in place.</li>
	<li>Complete a pre-settlement inspection and keep records of any items, which require further attention. </li>
	<li>Pass this record to your legal representative so it can also be documented from their end.  </li>
	<li>Your financial institution will likely need to complete a property valuation. </li>
	<li>The agency or agent will most likely be the point of contact for this step.</li>
	<li>Are there any registration or resident register forms, which need to be filled out and returned? </li>
	<li>Are there any guidelines, by-laws, moving in procedures, waste &amp; rubbish removal, vehicle registration forms?</li>
	<li>If handed a settlement pack, warranty manuals, and any additional collateral/ paperwork. These are best kept in a safe space, should they be required in the future. </li>
	<li>Contact details for a strata manager, caretaker, concierge, building manager.</li>
</ul>
Now that you've settled all matters and you have your set of shiny keys, it's time to get back to the champagne and a toast your property milestone.

Congratulations!

[smartcode_project:default project_id=8032]
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jieyee_46282

How can purchasers prepare for an upcoming off the plan settlement?

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Property depreciation is the second biggest tax deduction for property investors after interest, yet 80% of investors fail to take full advantage of it. 

With the COVID-19 pandemic placing financial strain on many investors across the country, it’s important that they do all they can to maximise their cash flow. 

What is property depreciation?

As a property gets older, its structure and the assets within it wear out – they depreciate. <a href="/new-apartments">Owners of residential investment properties</a> can claim this depreciation as a tax deduction. 

Most investment properties, both new and old, hold lucrative depreciation deductions. Depreciation is a non-cash deduction, this means investors don’t need to spend any money in order to claim it. 

How can investors claim depreciation? 

Depreciation can be claimed under two categories – capital works and plant and equipment. 

<a href="/guides/how-to-invest-in-property-in-2020-the-ultimate-guide">Capital works</a> refers to the structural and fixed components of the property. Some common examples are walls, mortar, doors and kitchen cupboards. 

Owners of residential investment properties that commenced construction after 15 September 1987 can claim capital works deductions at a rate of 2.5 per cent for forty years.

If an investment property was constructed before 15 September 1987, investors should still enquire about depreciation deductions available as these buildings have often undergone some form of renovation. 

Plant and equipment deduction refers to the easily removable fixtures and fittings of the property. For example, carpet, blinds and hot water systems. Depreciation deductions for plant and equipment assets are calculated based on their effective life. 

Depreciation for plant and equipment assets was affected by 2017 legislation changes. Under the current legislation, owners of second-hand residential properties who exchanged contracts after 7:30pm on 9 May 2017 cannot claim deductions for previously used plant and equipment assets. Owners of second-hand properties can still claim depreciation for any brand new assets installed in the property once it’s income-producing.

It’s important to note that depreciation deductions can be claimed as long as the property is genuinely available for rent. This means that if an investment property is vacant while the owner is searching for new tenants, they can still claim depreciation during this time. 

Investors must ensure they claim maximum deductions 

A thorough site inspection is essential to achieve the highest possible deductions and to <a href="/guides/18-ongoing-rental-property-costs-and-which-ones-are-tax-deductible">ensure accuracy</a> while maintaining full compliance with the Australian Taxation Office (ATO). 

A specialist site inspector will measure the building and floor coverings, note down the construction method, workmanship, materials used and condition of the property. Another important step during a site inspection is to identify as much qualifying plant and equipment assets as possible. 

The information gathered from the site inspection is used when completing a tax depreciation schedule and supports deprecation claims in the event of an ATO audit. Only quantity surveyors can calculate depreciation as they are one of the few professionals recognised by the ATO as having the skills to estimate construction costs for depreciation purposes. 

An investor’s accountant will use a tax depreciation schedule to determine depreciation deductions for each financial year. If an investor has owned an investment property for several years and hasn’t claimed depreciation, a tax depreciation schedule can help them claim back missed dollars by adjusting previous tax returns. 

<a href="/guides/how-to-navigate-buying-property-during-the-covid-19-crisis">Depreciation deductions</a> help investors maximise the cash flow from their investment property. If an investor orders and prepays for a tax depreciation schedule before June 30 they can claim the fee straight back this financial year.
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Property depreciation continues to maximise cash flow

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The key to balancing a portfolio is to create a portfolio that pays you, and you never pay for it. By adding properties that increase your before-tax income as well as your equity position, there is no risk of overextension. 

An unbalanced portfolio is one where you don’t have direct control over your capital or your cash flow or worse still, both. You lose control of your capital when you are 100% reliant on the market movements to give you all of your <a href="/buildings/nbh-at-lachlan-s-line-25-27-epping-road-macquarie-park">capital growth</a>. You lose control of your cash flow when your portfolio requires input from your salary to maintain itself. I want to stress here that this includes any reliance on your tax deductions, because if you lose your job these quickly disappear, and you clearly have no control over that. 

The most dangerous thing about an overextended portfolio is that most people only discover that they have made this mistake when something goes wrong. If you build a portfolio that requires everything to go perfectly every single time, obviously at first everything looks great. It is only when your circumstances change that this error is exposed, and you instantly understand the danger you are in. That’s why it is critical to only invest in properties with a safety margin built in. 

We work on three key safety margins with our clients: deposit preservation, cash flow security and safety buffers. 

Deposit Preservation

The approach most investors use is what we call the “buy, hope and pray” approach. Buying at full retail prices leaves your deposit <a href="/guides/looking-to-buy-an-investment-property-top-3-things-you-must-do-online-first">tied up in a property</a>, waiting for the market to move. In the current market conditions, people are discovering the limitations of this and how they can in fact lose money this way. That is why we make sure our clients generate their own equity in a deal. We want to create equity instantly in a deal so that upon completion, we can immediately recycle our deposit back out of the deal no matter what the market is doing. This way we never run out of deposit funds because it is never left tied up in an investment and we lose control of our money. 

Cash flow security

Never create a property portfolio that requires you to have a job to sustain it. If you are tipping in money each week or you are dependent on tax deductions for cash flow, your portfolio is exposed. The day your employment changes, your portfolio cannot sustain itself and it is overextended. Worse still, in a flat market, you are locked into working at your job for many more years, because you are unable to sell down your portfolio and realise profits to eliminate some of your debt. 

We only invest in properties that are cash flow positive before tax. This means that every time you add a property to your portfolio your cash flow security increases, it doesn’t decrease. Tax deductions are great and you should most certainly consider them, but they are not enough to sustain a portfolio. My personal portfolio is positive cash flow by $87,000 a year, but I also get over $142,000 in tax deductions so I get the best of both worlds. If I were to stop earning, my portfolio is clearly safe and I am not overextended. However while I am earning, my portfolio gives me amazing <a href="/expert-insights/buying/4-reasons-to-have-faith-in-australia-s-property-market-for-the-long-run">tax savings</a>. 

Some people believe that you need to choose between equity creation, growth opportunity and cash flow, and it’s simply not the case. We invest in properties that have all three, all the time. We highly recommend having the right Safety Buffers in place. We constantly tell our clients to plan for the worst but hope for the best, this way they are prepared. Overextending ourselves happens when we can’t handle a single thing going wrong. We encourage our clients to keep safety buffers for these events in their offset accounts. What usually surprises most people is that the amount they need is significantly less than what they are imagining. 

Vacancy Buffers

How long do you really think it would take to get a new tenant? If you think conservatively 4 weeks (representing a 7.7% vacancy rate, well above the average), then you keep 4 weeks’ worth of interest repayments in your offset account. On a $500,000 mortgage that’s only around $435/week, so a tiny buffer of just $1,740 easily has you covered. Very inexpensive peace of mind. 

<a href="/guides">Interest Rate Buffer</a> 

Do you fear an interest rate increase? If so, by how much? If your portfolio is struggling to be cash flow positive then a 0.5% rise can send you into negative territory. If that happens, how much additional money would you need to make up the difference? Let’s say this puts you negative to the tune of $100/week, then for peace of mind, you keep $5,200 in your offset account to cover it. 

Unemployment buffer 

People always ask, “what if I lose my job?” and believe they need to save up their entire salary as a buffer but this isn’t the case. Others mistakenly believe they need to save up all the interest repayments for the portfolio, but you don’t need anywhere near that much. 

The first question is, how long do you believe it would be before you find a new job? 12 months would have to be the nightmare scenario, so let’s factor that in. Right now, how much cash are you tipping into maintaining your portfolio each week? You need to include the tax savings you are getting too if they contribute to your portfolio survival. If you’re really negative on your portfolio and you are putting in $100 a week and you get $200 a week from tax too, that’s $300 a week you need to cover. For a full year of unemployment, all you need to keep your portfolio protected is $15,600 in your offset account. If you think 6 months is much more probable, then you just need $7,800 to cover your employment exposure. 

So, you can see that even if the perfect storm were to hit and you had all three happen at once, for around $20,000 you can have it all covered off and know that your portfolio is secure. 

Balancing a portfolio by investing in properties with safety margins built in, is the most reliable way to create wealth with property. This will also mean you avoid getting stuck in underperforming assets and slow your wealth creation by years. Overextending your finances by building a portfolio that’s dependent on your income is a ticking time bomb. While buffers will help, the safest and most reliable path to wealth, is building a portfolio that pays you and you don’t pay for it.
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Balancing a Property Portfolio

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Dipping property prices, rock-bottom interest rates and less competition at auctions have opened up plenty of opportunities for home buyers, but there’s one segment that isn’t enjoying any of these benefits: <a href="/guides">off the plan</a> and late settlement buyers. 

These are the forgotten purchasers who bought not-yet-built homes a couple of years ago and those who exchanged contracts prior to March 2020 but now have to settle in the post-COVID lending environment. Right now, these groups are facing two massive problems: 

First, while they may have gotten pre-approved by their lender in the months leading up to the COVID-19 outbreak, that doesn’t count for much anymore. Nowadays, banks and lenders will consider your circumstances when you have to complete on the property, and since COVID-19 many Australians have found themselves on shaky financial footing. Plenty have lost their jobs, or have had their hours cut and their incomes reduced. Many investors are receiving less rent as their tenants cope with the fallout. This has put pressure on lenders to be a lot more discerning when deciding who to do business with. Many are even refusing to consider borrowers in certain industries, even if their circumstances haven’t taken much of a hit. 

The second problem is valuation by banks and lenders of your purchase. With some economists warning that property prices could plummet by up to 30%, valuers are getting jittery. Suddenly, that unit you purchased for $750,000 off the plan a year ago, might only be worth $700,000.  This is bad news for borrowers because now they have to stump up an extra $50,000 to buy a property at a time when families are being stretched beyond their means — and parents may not be able to lend any money to save the day. 

These two big problems may mean that a purchaser won't be able to settle. Even worse, they could lose their 10% deposit and potentially be sued for the difference if the vendor sells to someone else for less money. 

Legislation needed to protect pre-COVID purchasers 

I am extremely concerned about these borrowers. So far, the COVID-affected property cohort has received assistance in the form of repayment deferrals, bans on rental evictions, and reductions in land tax for landlords whose tenants aren't paying full rent. At the same time, the government is still allowing vendors to demand settlement or completion of purchases as booked in pre-COVID. This is extremely unfair to purchasers as they’re being put at risk of losing their deposits and facing litigation. 

The government urgently needs to introduce legislation extending settlement periods for these purchasers by at least 12 weeks, on top of the standard 42 days. Some of the funds being provided to small businesses from the government should also go towards bridging loans for these borrowers. Rates should be kept low and interest capitalised to give them time to get their financial lives back in order so they can complete their purchases. 

All told, something has to be done or there will be a flood of properties to hit the market from those who have found themselves unable to settle, putting the market in an even greater state of disarray than it already is. To those purchasers who are currently in this mess, I would suggest speaking with the solicitor who is taking care of the purchase. Get him to talk to the vendor's solicitor and ask for an extension due to COVID. While they don’t have to agree it's still worth a try. 

ASIC has also advised lenders to  to take the COVID situation into account and ‘exercise their good judgement’ in the principles-based approach to lending. This seems to mean that the banks may start to be more lenient to borrowers and even allow for interest-only loans for an extra 12 months to help reduce the payments the borrower has to make.
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The plight of the off the plan or late settlement buyers during COVID-19

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Every <a href="/new-apartments/perth-wa">property in Western Australia</a> has to adhere to the mandatory legal compliance set out by the Consumer Protection Division and property owners are held liable to ensure its compliance. This checklist will help you ensure that risks are mitigated while protecting lives and assets.

1. Protection from Fire: Installation of Smoke Alarms &amp; Residual Current Devices (RCDs)

We have seen the devastating effect of bushfires across Australia. Measures for fire protection, especially in WA’s desert-like climate, are imperative to ensure the preservation of lives and our community. Interestingly, most fires occur at night. Smoke from the fires has also a lulling effect which draws a person deeper into sleep and therefore, we need external measures to alert us to the risk of fire – such as smoke alarms and Residual Current Devices (RCDs).

What is an RCD? 

An RCD, designed for protection against the risks of electrocution and fire caused by earth fault, is a sensitive safety device that switches off electricity automatically if it detects a fault. Two RCDs are required in a WA home – one for the light circuits and the other for power points. Based on local regulation, the two Remote Control Devices (RCDs) are required to be installed on the switchboard by the Property Owner prior to leasing a property. 

It is mandatory that powered smoke alarms are installed in all new residential buildings or extensions since 1st July 1997. From October 2009, it is obligatory for Landlords to ensure that the main powered smoke alarms are fitted in existing residential buildings prior to sale or signing of a tenancy agreement, in accordance with the Building Regulations 2012 prescription. 

2. Window Fittings &amp; Anchors: Product Safety

For the safety of young children,  since 2004 the Department of Commerce has been regulating the product safety of window fittings, window treatments and furniture anchors. The regulation places the onus on Property Owners in ensuring that the internal window coverings supplied (blinds, curtain cords, chains) meet with the national product safety requirement standards. For example, any exposed cord or chain that hangs lower than 1.6 metres from the floor must be secured by a safety device otherwise they may be in easy reach of young children.

In recent news, tenants now have permission to anchor furniture to protect children. Bookcases, glass display cabinets, drawers, and shelves pose a serious hazard if they are not properly anchored. A tragic <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-01-08/ikea-to-pay-%2466-million-family-2-yo-boy-killed-tip-over/11850246">case</a> this early year where a two year-old boy died after a clothes dresser tipped onto him at IKEA illustrates just how important this rule is.

However, tenants who have secured their furniture must repair them prior to vacating the property at their own expense including holes in the walls. As for furnished rentals, it is the duty of landlords to anchor furniture prior to tenants moving in.

3.  Locks &amp; Lights: Property Security 

With reference to the Residential Tenancies Regulation 1989, every WA property must have a minimum level of security to prevent break-ins. This includes door locks, window locks, and sufficient exterior lighting. The Department of Commerce details the requirements for this, and they include: 

<ul>
<li>The main entry door. This needs to either be a deadlock or a key-lockable screen door to the Australian Standard AS 5039-2008.</li>
	<li>Other external doors (excluding balcony doors where there is no access to the balcony except inside the premises): a deadlock or, if a deadlock cannot be fitted, a patio bolt lock or a key lockable security screen to the Australian Standard AS 5039-2008.</li>
	<li>Exterior windows (excluding windows fitted with security grilles to Australian standard AS 5039-2008, windows on, or above the second floor of the building and where the window is not easily accessible from outside the premises): must be fitted with a lock that prevents the window from being opened from outside. </li>
	<li>Main entry: Electrical light should be installed to light up the premises. It must also be fitted to or near the exterior of the residence.</li>
</ul>
Without the consent of both the Owner and Tenant, it is illegal to remove or change any locks of the premise. A case that bears an exception to the general rule is where there is Domestic Violence. Here a Tenant may change the locks at their own expenses without permission to safeguard their wellbeing. 

4. Swimming Pool, Spas and Ponds: Body of Water

One of the most preventable causes of death for young children (0-5) is drowning, thus precautionary measures are recommended to regulate any body of water. 

<blockquote>
“All private swimming and spa pools that contain water that is more than 300 mm deep must have a compliant barrier installed that restricts access by young children to the pool and its immediate surrounds”. 
</blockquote>

Western Australia Swimming Pool &amp; Spa Association

Local councils conduct regular inspections, once in every four years, to ensure that bodies of water in premises meet the requirement of appropriate safety barriers. While the regulation may differ for pools and spas built before 2001 and post-May 2016, it is best to <a href="https://www.commerce.wa.gov.au/sites/default/files/atoms/files/195697_web_rules_for_pools_and_spas_a4_booklet_feb_2019.pdf">double-check</a> with the local council on the specific requirements. 

 

Written by: <a href="https://www.timeconti.com.au/">Time Conti Sheffield’s</a> Cindy Knight
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Does your property comply with the mandatory standards in WA?

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Ever wondered how <a href="/guides/how-much-can-i-borrow-for-a-new-home">borrowers</a> on average incomes manage to borrow millions of dollars? If lenders apply buffers to mortgage debt, how can investors continue to borrow?

This can be done by carefully structuring your loans and using different lenders over time to maximise your borrowing capacity. Understanding how different lenders calculate borrowing capacity can help you go from one property to many! Whether you are on your first investment or your tenth, lenders will use their serviceability calculators, calculate your income and expenses, and will lend to you based on what ‘surplus’ is available. Property investors can take advantage of differences in the way each lender calculates this ‘surplus’ to build larger property investment portfolios. 

The principle is that investors can grow a larger portfolio by using a pool of lenders, rather than by having all their loans with one individual lender (and assessed on one servicing calculator). In fact, property investors can borrow a ‘multiple’ of their borrowing power with an individual lender.  At Confidence Finance, we call this the ‘finance multiplier’.

In today’s lending environment, this finance multiplier can be close to 100%.  That is, by correctly structuring your finances and choosing the right lender at the right time, it is possible to almost double what you could have otherwise. The key to this is to understand the typical characteristics of property investors and how this feeds through to individual lender serviceability calculators.

Firstly, rental income forms a larger proportion of their income. As you accumulate a larger portfolio, your rental income grows not only in an absolute sense, but also as a proportion of your household income.

Secondly, investment debt expenses are higher than most other borrowers. As a portfolio grows over time, so too does investment debt. This will often be a property investor's largest ‘expense’ in their serviceability calculation.

Now, this is where the knowledge of different servicing calculators can really benefit you. Rental income is treated quite uniformly between different lenders, generally taken at 80% of your actual rental income. On the other hand, investment debt expenses are treated very differently by different lender calculators. This means that as property investors grow their portfolios, there is a greater divergence between what individual lenders will allow you to borrow, as they are placing different buffers on your existing repayments. These buffers mean that the ‘assessed’ expenses in serviceability calculators continue to rise with each individual investment purchase more than the rental income that is created.  The net effect is lenders will lend less and less to you as you grow your investment portfolio.  

So how do property investors diversify their lenders to borrow more? For property investors seeking to maximise their borrowing capacity, it makes sense to begin your investing journey with a lender that gives you maximum flexibility to revalue and release equity. These are often, but not always, the larger banks in the market.

Once your borrowing capacity is ‘soaked up’ with these lenders and they are no longer willing to lend more to you, property investors can swap to an aggressive lender and continue to grow their portfolio. These aggressive lenders tend to be smaller lenders whose servicing calculators apply smaller buffers to existing debt obligations. That means assessed expenses are lower with these calculators and therefore they have a higher net surplus to leverage. This results in greater borrowing capacity, often double than what you would be looking at if you only tested your servicing with the big banks.

Keep this in mind if you are with a major bank and being told no. There are finance options and strategies that savvy investors can use to keep growing a portfolio.
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How understanding servicing calculators can double your borrowing capacity

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For some people the mere mention of “due diligence” can cause their eyes to glass over and throw their arms in the air that it's all too hard. We understand, so we have simplified this sometimes arduous, but absolutely necessary process down to 3 simple steps.

Whether you are looking to purchase your first investment, or on the search to add to your already growing property portfolio these three steps will help you buy with confidence. 

Know the location.

We have more online information at our fingertips than ever before, so while we believe this is one of the most important aspects of property investment it can also be the easiest. Below are some great sites that give you a snapshot of your preferred location.

<ul>
<li><a href="https://www.microburbs.com.au/">Microburbs.com.au</a></li>
	<li><a href="https://www.corelogic.com.au/">Corelogic.com.au</a></li>
	<li>Planning.NSW.gov.au ( just swap out the State eg planning.VIC.gov.au)</li>
</ul>
What you are looking for:

<ul>
<li>Demographic: you need to understand what type of people live in this area. This is especially important so you know the type of tenant you are going to attract.</li>
	<li>Infrastructure: what facilities are there? Schools, shops, libraries, parks, green spaces</li>
	<li>Public Transport: is there a train line that you could buy near or would your tenant need to have a car?</li>
	<li>Planned Developments: Is your property about to be inundated with more development which could put downward pressure on your rental income. If you are looking to buy a house it's good to know what applications are surrounding the house as this will be an issue for any tenants in terms of noise and possible disruption to their street if its an inner-city dwelling.</li>
</ul>
Plan for the <a href="/guides/how-to-invest-in-property-in-2020-the-ultimate-guide">best tenant</a> at the highest rate.

Tenants have lots of choices so make sure your property will stand out. It's no good buying a cheap property if you can’t rent it out for a good rent or it attracts the wrong sort of tenants. 

The last ten years of development boom is now putting downward pressure on pricing especially in this COVID19 world, but the strong properties that meet the below criteria hold their rental value and generally rent out quickly.

<ul>
<li>This is what we advise our clients that tenants are looking for:</li>
	<li>Walkable public transportation or has car spot</li>
	<li>Lots of natural light (always know the aspect of the property)</li>
	<li>Good size master bedroom</li>
	<li>Functional floorplan - the flow of the property has to be liveable. If it doesn't make sense to you it probably wont to a potential tenant</li>
	<li>Property outlook - if the property is facing a busy main road, electrical towers, brick walls etc it will be harder to rent</li>
	<li>Sufficient storage</li>
	<li>Preferably with an outdoor space</li>
</ul>
Once you have identified some properties that meet the above criteria then you narrow it down by going through the numbers.

Know your numbers.

Firstly you have to <a href="/guides/how-to-ensure-financial-return-on-your-property-investment-in-15-simple-steps">have a budget</a> and you have to stick to it, always. Then, it's about getting the best value for money. Property investment is about making money, so remove any emotional connection you may have to a certain property or area. Once you have chosen an area and identified properties that could fall into your budget it comes down to the numbers.

There is lots of talk about what capital growth and yield makes a good investment. Capital growth is the increase in an asset's or investment's value over time. It’s measured by comparing the asset's current value with how much it originally cost.

Yield is the earnings generated and realized on an investment over a particular period of time. It's expressed as a percentage based on the invested amount or current market value.

A good indicator is if your investment doubles in value every 7-10 years and you look for a gross yield of above 4%. It’s a balancing act getting these two indicators right and will depend on the area and value of your property.  When you find that property that is in a sound location and has features and benefits that will excite tenants you can begin the negotiation process, just don’t go over your budget.

Happy investing.
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