Q. Why invest in a property?
A. Investing in property has many benefits when looking to build long term wealth. If you take the time and select your investment properties well, there are a number of advantages including: earning a profit from capital growth in property, additional income through rent or tax benefits including negative gearing.
Q. Can I purchase an investment property without using my own money?
A. In some cases, you do not need a deposit. If you have sufficient equity in your current home, you can use this as a deposit for your new investment home loan.
If you’ve owned your own home for a few years, you could have built up quite a bit of your equity in your property. For example, a property worth $500,000 with a mortgage loan of $200,000 has equity of $300,000. You can use this equity to pay the deposit on your investment property. Find out more about your deposit options, or to find out how much equity you have in your home, contact one of our Mortgage Consultants on 1300 364 400.
Q. Will rental income count towards my borrowing power?
A. Yes. You can use the rental income to help boost your borrowing power.
Q. What will my repayments be?
A. This will vary depending on the loan amount, interest rate and term. Try our Loan Repayment Calculator to get an estimate of your repayments.
Q. What G&C Mutual Bank Home Loan solutions are available if I want to purchase an investment property?
A. Property investment loans are not too different from any other type of home loan. You can choose fixed, variable or split interest rates and flexible features like redraws. If you are looking to invest in property, G&C Mutual Bank has a number of Home Loan options that will suit your needs.
The simplest way to ensure you choose the right home loan that will allow you to make the most of your investment property is to talk to one of our experienced Mortgage Consultant by calling us on 1300 364 400.
Q. What is negative gearing?
A. Negative gearing means that the expenses incurred in owing an investment property, including interest you are paying on the loan is more than the income it is generating. As a result you are making a loss, which means you may claim a tax benefit. Please refer to your tax adviser to determine your individual circumstances.
Q. What else should I consider before buying an investment property?
- Do I have a plan? It’s important to know why you want to invest, what you hope to achieve and have clear goals before setting out. You may want to talk to your accountant or Financial Planner to help you determine what your long team wealth strategy is.
- How much can I afford to borrow? As with any home loan it’s important to understand how much you can afford to borrow before looking for a property. A G&C Mutual Bank Mortgage Consultant can help you understand how much equity you have and provide loan pre-approval. Contact G&C Mutual Bank on 1300 364 400.
- Have I done sufficient research? It’s important to understand that investing in property can result in good returns, however success is not guaranteed, especially if you are not prepared. It is important to do your research before you make any decisions. You should be looking at growth areas, attend open inspections and monitor sales results in particular areas before deciding on where to buy. Once you have decided which area to buy in, it’s worth getting to know the local market. It may be worth talking to locals, real estate agents and councils to get a deeper knowledge of the area and what properties are worth.
Are there any additional costs? Once you have bought your property it’s important to understand and be aware of any ongoing costs. As with any property, you will need to pay interest, council rates, land tax, property management & strata fees (if applicable). As a landlord you have other financial responsibilities, like maintenance and repairs and landlords insurance.