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Buying an investment property is a big financial decision, so it’s essential to understand your options. Whether you’re considering your first investment property or at the next investment stage where you’re ready to grow and diversify your portfolio. Crest Lending can help you secure the right investment property loan for you.

Advantages of Investment Property Loans

For many Australians, investing in property is a low-risk way to grow your wealth as it’s a relatively stable investment that can provide a great return on your investment in the long run. There are many benefits of investing in property, including:

Capital Growth

Property investments have shown long-term growth, with compound interest increasing its value over time compared to other volatile investment options.

Physical Asset

With a tangible asset, you have the opportunity to increase the value of your investment with renovations and additional features.

Tax Benefits

Most of the expenses associated with your investment property can be offset against the rental income you receive.

Asset Security

There will always be demand for housing, and with the right property in a well-located suburb, you should be able to generate a lucrative long-term passive income.

What You Need To Consider When Buying An Investment Property

Property is generally considered to be a safe and stable investment option. With all the advantages of investing in property, there are also considerations you should be aware of. Whether you’re a savvy investor or completely new to the investment property market, here are some factors you should consider:

Assess Your Financial Position

Getting caught up in all the advantages of investing in property can happen. But, it’s important to properly assess your financial position and consider if you can afford the repayments if the property is vacant. While an entry-level investment is an excellent opportunity to enter into the investment property market, ask yourself if the property you’re looking at is attractive for tenants and rental applications. Consider whether it is in a good location, has local amenities and shops, and decent public transport links as all of this will help to keep your property occupied with tenants.

Use our repayment calculator to determine what your repayments may be.

What Are Your Financial Goals?

Consider how an investment property contributes to your overall financial plan and whether you’re looking for a long or short term investment. If you require quick access to your investment capital, then investing in property may not be the right avenue to go down, as it is a non-liquid asset and takes time to sell and settle. Instead, you may opt for other more liquid investments options.

Ongoing Expenses

Understanding all the costs involved in investment property is essential to having a successful investment that allows you to budget and plan for your future. Even though you aren’t living in your investment property, you will still be required to pay ongoing maintenance expenses. If you choose to rent your property with the help of a real estate agent, consider property management, council rates and landlord insurance fees.

Deposit and Borrowing Power

Did you know that if you already own your property, and have an exisiting home loan you may be able to use home equity instead of a cash deposit? Once you have tenants in your investment property, you can use the rental income to help you pay off the loan.

Understanding your borrowing power is essential in finding out the type of property and location you can afford. Get an idea of your borrowing capacity with our borrowing power calculator.

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What Is An Interest-Only Loan?

There are two parts to an investment home loan:

The Loan

The amount you borrow

The Interest

The amount the lender charges on top of your loan

Many clients come to us opting for an interest-only loan, as it’s a helpful way to kickstart your investment property journey. With an interest-only loan, you enter into an agreed period where you only pay off the interest of the amount borrowed.

Your initial loan balance won’t reduce during the agreed interest-only period. Once the interest-only period expires, your investment home loan will change to a principal and interest loan. You will start repaying the amount borrowed and the interest on that amount. This may result in higher repayments.

An interest-only home loan is suitable for someone seeking lower repayments during the interest-only period, which may help them save and pay off other debts. If you’re a property investor, this type of investment home loan is also a way you can maximise your tax deductions.

Start Investing In Property on the Gold Coast

Have you considered your financial goals? An investment property strategy is a great way to grow your wealth. At Crest Lending we can help you find an investment home loan for you and your unique situation. As with any financial decision, it’s important to weigh the benefits and risks so you can enter into your loan agreement with confidence.

With over 45 years of financial experience, we can share the basics of investing in property to empower you to make owning an investment property a reality. As Gold Coast locals, we know the area just as well as you do and can advise on what areas are considered a good place to start your property investment journey.