Australia currently faces a chronic housing shortage which, coupled with a rapidly expanding population (through natural increase and immigration), has pushed rental vacancy rates to historic lows and put upward pressure on rents. There are simply not enough houses to go around in certain parts of Australia. An investment plan is one that works towards building your wealth and securing your financial freedom.
For some, the future may seem a long way off, but the time to act is always now, because the future waits for no one. The housing market is generally a seven to ten year cycle. There are always highs, lows and steady patches. The decisions you make today will determine the lifestyle choices you have in the future.
The following factors should be taken into consideration when purchasing property as an investment:
At Irwin Financial Solutions, we provide expert guidance to help you navigate the complexities of investment, making your investment journey smooth and successful.
There is more than one way to finance your deposit.
The good old… save a deposit!
The most simple and straightforward method of making a property purchase is to save a deposit.
Use the equity in your home/other property.
For investors, however, one of the most popular ways to finance your first and subsequent properties is by accessing the equity in your home (or other property).
If you are already repaying your own home or have an investment property, you may have enough equity to use as a deposit for your next property purchase.
Interest rates move constantly, so you will need to allow room in your budget for interest rate increases and other unforeseen additional spending. When interest rates drop, maintaining the same repayments with the savings going into your offset account is one of the fastest ways of paying off more of your loan and building a buffer if they rise again.
Think very carefully about the different loan product offerings available and how these relate to your spending and saving habits. Consider options such as an offset account that will enable you to take advantage of using any excess cash to save on interest. It’s also a great account to use to save for your next investment property.
Not only can (company name) help first home buyers, but we can also help first time and experienced investors navigate the right path, structure and solutions to property investment.
There are many ways you can finance your first investment property, however it does depend on a few things:
The most common and typical finance for investment properties is an interest only loan. However as the lending environment is constantly under review, especially for investors, the criteria to borrow investment funds are subject to change.
Ideally, investment property loans should be interest only because an interest only investment loan is FULLY tax deductible. Interest only loans can be fixed or variable. It is usually the best cash flow solution when used with good capital growth. With an interest only loan your repayments are set to cover the interest component of your loan only, allowing you to keep your repayments on your investment property to a minimum.
Generally, interest only loans are for a maximum five year term (depending on your lender) reverting to a principal and interest loan at the end of the agreed interest only term. However a further interest only period can be negotiated at this time. The interest on your investment loan is tax deductible, making this type of loan attractive to investors.
As the lending landscape constantly changes, interest only loans are constantly under review and may not always be the best option for your personal circumstances. Use the skills and expertise in our office to avoid any misunderstandings and to maximise your investment lending.
Did you know that you can use your self-managed superannuation fund (SMSF) to buy an investment property? You will need to consult your accountant or financial advisor with regards to:
When considering property investment in Castle Hill, it’s important to note that this area has experienced strong growth in recent years, driven by infrastructure development, new amenities, and its proximity to major transport links. As a result, property values in Castle Hill are expected to continue appreciating, making it a lucrative location for long-term investors.
Similarly, property investment in Sydney remains highly attractive due to the city’s status as a global financial hub. Despite short-term fluctuations, Sydney’s property market continues to be a hotbed for investors looking for reliable returns and future capital gains. Whether you're interested in high-density areas offering strong rental yields or suburban locales with potential for capital growth, Sydney has something to suit every investor's strategy.
