Your A - Z Guide To Property Investment - Part 2

01-07-24 02:56 PM Comment(s) By Joean

Explore the world of property investment with our A-Z guide. We cover everything you need to know to make informed decisions and unlock the potential of property investment.

KNOCKDOWN - The term is used to refer to a property that is in poor condition and which cannot be restored. The only solution is to demolish and rebuild.

LAND TAX - This is an annual tax that landowners pay to state and territory governments.

LIQUIDATED DAMAGES - A liquidated damages clause (or an agreed damages clause), is a provision in a contract that fixes the sum payable as damages for a party's breach.

MEDIAN HOUSE PRICE - The median house price is the “middle” price of all sales recorded in a particular area. It is also known as the 50th percentile. This is not the same as the average price, which is determined by summing all sale prices, divided by the number of sales.


MORTGAGE - A mortgage is an agreement between you and your lender that gives the lender the right to take your property if you don't repay the money you borrowed plus interest.


MORTGAGE BROKER - A mortgage broker deals with banks or other lenders to arrange a home loan. Mortgage brokers must act in your best interests when recommending a loan.


NON-NEGOTIABLE 
Non-negotiable means it is not open for debate or modification. It can refer to the price of a good or security that is firmly established and cannot be adjusted or a part of a contract or deal that is considered a requirement by one or both involved parties.

OWNER OCCUPIER - An owner occupier is a person who purchases a property with the intention to live in it. This means that there's generally an emotional attachment to the property.

PROPERTY PORTFOLIO - A property portfolio is a collection of properties owned for investment purposes. The goal of building a property portfolio is to increase wealth and establish a source of income.


QUANTITY SURVEYOR - Quantity surveyors are responsible for managing all aspects of the contractual and financial side of construction projects. They help to ensure that the construction project is completed within its projected budget.

REFINANCE - This involves replacing an existing loan with another loan on different (usually better) terms. An investor may refinance a loan with another bank offering better interest rates, however there may be costs involved in refinancing.


RETIREMENT - Retirement is that time in your life when you finish working and rely on other sources of income and your retirement savings.


SETTLEMENT - Settlement is a legal process that is facilitated by your legal and financial representatives and those of the seller. It's when ownership passes from the seller to you, and you pay the balance of the sale price. The seller sets the settlement date in the contract of sale.

SMSF (SELF-MANAGED SUPER FUNDS) - Are funds usually established by an individual or family as a means of looking after their own super savings, especially for retirement. They run it for their own benefit.


STAMP DUTY - Also known as a stamp tax is a tax a government levies on documents that are required to legally record certain types of transactions.

TAX DEPRECIATION - Tax Depreciation is a report that details the tax deductions you can claim on your investment property. Claiming these tax-deductible expenses involves identifying the value of an investment property.


TENANTS - One that pays rent to use or occupy land, a building, or other property owned by another. 

UNCONDITIONAL APPROVAL - Means the contract has been signed, finance approved and all conditions on the contract have been met - including balance deposit paid. 

VALUATION - A valuation is a detailed legally binding report of a property's market value. It is conducted by an accredited valuer who has completed formalised education and training.


VARIATION - A variation (sometimes referred to as a variation instruction, variation order or change order), is an alteration to the scope of works, in the form of an addition, substitution, or omission, from the works described in the contract.

WAIVER - A waiver is when a person, government, or organisation agrees to give up a right or says that people do not have to obey a particular rule or law.


WARRANTY - A written guarantee, issued to the purchaser by its manufacturer, promising to repair or replace it if necessary within a specified period of time. 


WITNESS - Someone who is asked to be present at a particular event and sign their name in order to prove that things have been done correctly. 


YIELD RATE - Yield is the anticipated return on an investment, expressed as an annual percentage. For example, a 6% yield means that the investment averages 6% return each year. 


ZONE - A zone identifies the preferred land use in an area. The zone, and other planning controls, are identified in the planning scheme to guide development and use of land.

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