Looking to invest in property?
If you haven’t already bought a home, chances are you’re trying to find a way to buy one. Perhaps, it’s the familiarity with the real estate market that makes property a place where many Australians choose to invest. But it’s most important to know that buying an investment property is quite different from buying a home to live in.
We’re here to walk you through some of the key things you need to consider when it comes to financing an investment property.
Over the last few decades, the values of some properties have often risen more than the rate of inflation.
Some say property ownership is a national obsession, with affordability issues, house prices, and interest rate movements constantly in the news.
Apart from the common general understanding of the market, there are some other reasons people like to invest in property. Some common ones are the potential for capital growth (how much the property rises in value over time), return from rent and tax benefits.
Another plus is you don’t need to be a long-time investor with lots of funds on hand to start investing. If you already own a home that’s increased in value, you can potentially unlock this equity to help purchase another property. Or, if you’re yet to buy your own home you can use the rent to help pay the mortgage on an investment property and get a start in the market.
There are two basic ways to get a return on your property investment:
Capital Growth:
When you sell a property for more than you paid for it, that profit is called the ‘capital growth’. Usually places that enjoy more capital growth are sought-after locations, which might include proximity to the CBD, water, or areas enjoying a surge in population. However, capital growth in any areas in not guaranteed.
Rental Returns:
Income from rent is a more immediate return than capital growth. As long as someone is renting the property, their regular payments can help with funds towards your mortgage and property costs. When considering potential rental returns, every suburb is different and it’s critical to do your own detailed research.
If you’re thinking about borrowing for your property investment, it’s a good idea to speak to a mortgage broker first.
We offer a wealth of information and expertise for you to draw on. Not only will we help you find the right loan, we’ll aim to make the whole application and approval process much easier.
Choosing the right loan might be as important as choosing the right property. There are literally hundreds of different loan products out there. It’s just a matter of finding one that meets your needs.
Contact the team at Provide Finance to discuss your property investment options.