The Essential Guide to Investment Loan Mortgages in Australia by OzBroker

Get Complete Knowledge About Investment Loans for Better Financial Health

Welcome to OzBroker’s definitive guide on Investment Loan Mortgages in Australia. We can’t emphasise enough how important it is to equip yourself with the right knowledge before taking the plunge into property investment. Residential real estate, when approached with sound advice and preparation, can offer regular, tax-friendly returns and long-term growth in value. So, let’s break down the essentials that will help you achieve your investment goals.

Before You Invest, Make a Plan

Successful investing begins with planning. You are committing financially to an asset that needs to provide returns both in the short and long term. Consider the following factors before starting your investment journey:

Assess Your Financial Standing

Can you afford a property that will generate long-term gains?

Are you prepared for vacant periods?

Where Are You Headed?

Can you afford to hold onto your investment for an extended period?

Will you need to access your invested capital soon?

The Money Equation

Understand that there are significant upfront costs and ongoing maintenance fees.

Calculate your borrowing capacity to determine what type of property you can afford.

Cash Deposit or Home Equity?

If you own your home, consider leveraging your home equity as an alternative to a cash deposit.

Key Criteria: Affordability and Tenant Appeal

When looking to invest, always keep two pivotal points in mind:

  1. Affordability: Look for a property that aligns with your financial capacities. Negative gearing is common during the initial years, which can offer tax benefits. However, ensure that your budget can absorb the regular loan repayments and other running costs.
  2. Tenant Appeal: The property must attract good tenants. Location, transport links, amenities, security, and off-street parking are critical factors that enhance tenant appeal.

How Much Can You Borrow?

Your borrowing capacity depends on multiple factors, including your regular income and the potential rental income from the investment property. Knowing this allows you to set a realistic budget for your investment. If you already own a home, you may be able to use your home’s equity as a deposit, enhancing your borrowing power further.

Understanding the Costs

Owning an investment property comes with various costs that can be categorised into:

Upfront Purchase Costs

  • Pre-purchase inspections (~$400)
  • Strata search (~$250, if applicable)
  • Stamp duty (varies by state)

Ongoing Costs

  • Loan application fee (~$700)
  • Lender’s valuation fee (~$300)
  • Lenders Mortgage Insurance (if borrowing more than 80% of the purchase price)
  • Legal fees (upwards of $1,000)

Understanding these costs helps in planning your budget efficiently and making well informed investment choices.

Final Thoughts

Investment properties can be a lucrative venture, but the stakes are high. Adequate planning, the right advice, and a well-thought-out budget are your roadmap to success. At OzBroker, we are committed to helping you make informed decisions, offering tailored solutions that align with your financial goals.

If you’re serious about taking the right steps toward a successful property investment, don’t leave it to chance. Speak with one of OzBroker’s experienced mortgage brokers to tailor an investment strategy that’s right for you. Click here to schedule a no obligation consultation and start building your investment property portfolio today.

Your dream investment property is just one click away. Secure your future with OzBroker.

Thank you for reading. Remember, knowledge isn’t just power; it’s your ticket to financial freedom. Feel free to share this guide if you found it helpful.

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