Property investors

  • Long term capital growth
  • Taxation benefits
  • Leverage your capital
  • Know how to buy wisely
  • Get property advice
  • Structure an investment loan properly
  • Easy to buy investment property
  • Increase cashflow from rental income

It is essential when applying for an investment loan that you consider your investment strategy. This will help determine the type of loan features and investment loan structure best suited to you. 

Getting the best investment loan

The two key types of investment loan products are:

  • Interest only repayments
    This type of loan only covers the interest on your loan and won't reduce the principal. Choosing interest only repayments lowers your loan commitments, giving you more ability to cash flow other investment opportunities.
  • Principal and Interest repayments
    When your primary objective is to pay off your investment property as quickly as possible, then this is the best option for your investment loan.
  • See Loan types for other suitable options (eg. Line of credit/equity loans)

Contact Time Finance for an obligation free consultation on your Investment Loan options.

What is an investment property?

An investment property is purchased for the sole purpose of earning a return on the investment, either in the forms of rent and capital gain. The owner does not live in the property. Purchasing an investment property is an excellent way to achieve financial independence.

Who can buy investment property?

Almost anyone can purchase an investment property. Many people buy their first home to live in, and then purchase another investment property before they buy shares and other property.

A common trend now is to buy an investment property before you purchase the home you want to live in. You can buy an investment property whilst you are renting or living at home. This allows you to start accumulating wealth by buying at a price and in areas you can afford now, and then use your asset growth to later buy a property to live in, where you want to live.

Benefits of buying an investment property?

Sensible investment in property has many benefits, including:

  • Capital Growth - according to the Australian Bureau of Statistics (www.abs.gov.au) property prices have historically proven to generally double in value each 7-9 years.
  • Rental Income - rent is paid by the tenant and generally increases each year due to inflation and market rental rises.
  • Leveraged investment - you can leverage your deposit in the bank (say $50,000) into a property worth $300,000. If the property goes up 10% in value, you have made $30,000, which is much more than the 10% you made on your money in the savings account of $50,000.
  • Leverage capital value - when your property goes up in price, the 'equity' (value minus loan) goes up, allowing you to draw against this for lifestyle needs or another investment property.
  • Tax advantages - there are many costs associated with the investment property that can be offset against your income or capital gain. These include interest, property management, advertising, capital works, legal fees, travel, agent's commission, advertising, depreciation and more.
  • Less volatile than shares - property can be less volatile than the share market and it tends to be regarded as more of a safe long term investment. Often an investment in shares can lead to a complete or significant loss in value, which is not common in property.
  • Interest Payment Tip - check with your accountant to see if this applies for you - if you pay interest 12 months in advance (before 30 June of each year) via a lump sum, you will be able to save further interest on standard fixed rates, and gain tax benefits sooner, in the current tax period. Speak to your tax advisor to understand more about payments in advance.

As with any investment, there are no guarantees. There are risks in property investing, many of which can be avoided by good advice and sensible buying:

  • Property prices can go down, as well as up - buying and financing on the right terms of affordability are very important to survive any ups and downs, as well as purchasing in identified growth areas.
  • Vacancy periods - sometimes tenants are hard to find especially good ones who pay on time and take care of your investment. Knowing areas with good rental demand, appropriate rents and good management of the property minimise this.
  • Maintenance Costs - as a landlord you are obliged to maintain the property in good safe condition, these costs will vary depending on the age and condition of the property purchased. Some types of property are better than others.
  • Rising costs of borrowing - changes in the market reflecting higher interest rates will affect your cashflow. Having the right loan to suit your needs will help manage this.

How to buy an investment property

Purchasing an investment property is exciting, but it is a big investment and should be acquired wisely, and tailored to suit your circumstances. Fill in this Property Investment Enquiry Form to have an independent expert in property investment help you understand what to do, and help you with your best options. There is no obligation to you.

This will provide you with the professional assistance you need to help you understand the following issues to maximise your investment property acquisition:

  • Positive or negative gearing?
  • Rental cash-flow vs capital growth?
  • What can I afford to buy?
  • Where should I buy?
  • What type of property is best to buy?
  • When to buy?
  • How to buy?
  • Where are the best identified opportunities?
  • What's the right loan?

Making a decision now to find out how you can acquire an investment property, is one of the wisest things you can do to secure your financial future. Fill in this Property Investment Enquiry Form to get started. There is no obligation to you.

At Time Finance we understand the various loans available for investors and what options suit short-term and long-term Property investment strategies. Choosing the right loan product for your strategy is vital as the wrong choice could cost you thousands of dollars over the life of your investment, and reduce your returns and flexibility in purchasing further investment properties.

You can benefit from the knowledge and experience of an expert Time Finance mortgage broker to find you the best loan solution for your investment requirements. Contact Time Finance for an obligation free consultation on your Investment Loan options.

Looking for a property manager to manage your investment property?

Visit Australia's No. 1 dedicated rental website www.rent.com.au to search for thousands of property managers throughout Australia.

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FAQs
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Depends on the size of your deposit, the value of the property, and your servicing capacity (based on your income and how much you are able to repay).

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Most mortgage lenders will require a deposit of 20% or more of the property price. Less may be required however will require mortgage guarantee insurance in most cases

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Depends on the type of loan, intrerestr rate, payment term, and whether you pay monthly or fortnighly. Use us mortgage calculators to guide you.

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Every state is different and may depend on the value, whether you are building or buying an established home. Read more in our FHOG article

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It is a rate that includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure that lets you compare loans from differengt lenders on a fair comparison.

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This 'in principle approval' is usually valid for 3 months. Gives you the confidence on how much you can borrow before your purchase a property.

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The cost of Stamp Duty varies between States and Territories. Subject to your personal loan circumstances, the cost of stamp duty can be included in the loan amount you borrow.

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