HOW DO I INVEST IN PROPERTY?
Bricks and mortar are so reassuringly tangible and investing in property is a great way to achieve your goals but beyond that we want to make sure you have a well thought out plan.
Our experience tells us that your buying strategy should have these goals in mind:
- Deriving a passive income
- Capital growth
- Utilising deductions to reduce tax burden
- Ensuring an balanced/diversified portfolio
- Planning for retirement
Changes in market conditions have made investing in property harder but with our advice we’ll ensure you implement a strategy that works. We might even be able to secure your investment loan at owner occupied interest rates, saving you thousands.
We know you have lots of questions. So, we’ve provided answers to the most common ones here.
The difference between the value of your property and the amount you owe on your home loan. Market conditions can favourably increase you property value, opening up options for you to invest or refinance at a better rate.
Yes, you certainly can but this will depend on the lender, the type of property and availability of that equity. We will need to do a quick assessment and valuation to see if you qualify.
Rental income will be taken into account when analysing your ability to service the debt. In general it is not usually the full 100% figure but more around the 80% mark, however each banks, policy is different and we will ensure to find the best loan fit for you.
This really depends how you intend to use the property in the long term but this is a great way to minimise your interest repayments and avoid diluting your tax benefits. There are lots of options available, but it is advisable to speak to an accountant to find out any tax implications before you start the process.
This is an option for those people looking to increase their loan amount by drawing on existing equity in the property. This type of feature is often utilised by people looking to fund a renovation or buy another property.
Negative gearing refers to the loss associated with property ownership relative to the income earned. For example if the interest expense on your investment property is higher than the income produced in rent, your property would be considered negatively geared.
In terms of its functionality, not really. Investment loans can be equipped with the same features as your normal home loan. Its difference will typically be found in the higher interest rate charged and larger upfront deposit or equity requirement at set up.