Investment Home Loan

Investment Loan Guide

Property investing can be somewhat of a trap for many Australians who approach the process with the aim of saving some money at tax time, and thinking that owning an investment property is just like managing their own home. While it is easy to lose your way on the investment property path, there is no reason you can’t be a successful property investor in your 20s, as a mum and dad investor or to build your retirement nest egg – you just have to ask the right questions.

Featured Investment Loans

Guide to Investment Loans-Contents

• Why invest in property?
  • How much do I need to earn to become a property investor
  • Is now the best time to start investing in property
  • Why property?
• How can I guarantee a return on my investment?
  • How do I calculate risk vs return?
  • What tools can I use in my property search?
  • How do I build equity?
  • What do I need to consider when looking at investment loans?
  • How do I check my cash flow before investing?
• Which investment strategy offers the best return?
  • What is the rental income strategy and what are its returns like?
  • What are the steps to calculate rental yield?
  • What are the steps to calculate rental yield?
• What are the costs of property investment?
• What type of property should I choose?
  • Which features will most appeal to my tenants?
  • Do I need to know about the property’s history?
  • Do I need to know about the areas crime rates?
  • Do I need to know about the areas crime rates?
• How do I find the best investment loan?
  • Do I need an interest only loan?
  • Do I need a line of credit loan?
  • Should I choose a loan with a honeymoon rate?
  • Do I need a redraw facility?
  • Do I need a redraw facility?
  • Should I use an all in one loan?
  • Do I need a split loan?
  • Do I need a construction loan?
  • Do I need a bridging loan?
  • Should I choose a fixed or variable interest rate loan?
  • Should I pay my interest in advance?
  • How should I structure my investment loan if I also have personal debt?
  • How much difference does my choice of investment loan make?
• What is negative gearing and how can I benefit?
• How can I make tax deductions from my investment?
  • What is capital gains tax and how is a calculated?
  • How can I reduce my capital gains tax?
• What steps do I need to follow to manage my investment?

Of course anyone who has approached a new venture knows it can be so overwhelming that you often don’t know what you don’t know, so don’t know which questions to ask. That is why at Home Loan Finder we have compiled this investment loan guide to answer all the questions you may already be asking – like;

• ‘can I afford it?’
• ‘how do I find tenants?’
• ‘what is negative gearing?’
• ‘can my cash flow keep up?’

So you can begin developing your investment property portfolio in the best way possible.

Why invest in property?

The reasons to invest in property are as individual and varied as the investor themselves and only you know whether your goal is to build wealth, supplement your income or be in a position to rent one of your investment properties to your children when they leave home. The decision to choose the real estate market as your investment forum is one which is more widely understood because when you invest in property you are investing in something tangible. When compared to share market or money market investments, or even term deposit and savings account investments, with an investment property you can see it – you can even touch it if you like – and having an element of reality in your investment portfolio can make it easier to understand, manage and maintain; for example you can see if your property needs a new carport after the storm, but it can be harder to part with investment funds to patch up a bad day on the stock market.

Property investment is also one of the most secure forms of investment as it has the potential to both earn you money and save you money through:

• Capital growth as your property increases in value.
• Rental returns which can supplement your income.
• Tax benefits where much of what you spend on your property can be claimed back as a tax deduction.

How much do I need to earn to become a property investor?

In truth it is not the size of your annual income which will determine whether you can enter the property investment market, but your willingness to budget, and commit to managing your finances in a way which allows you to maintain and service your property.

In order to be approved for an investment loan, your income will of course be considered, however lenders will consider other aspects of your financial situation as well. For example, the rental income you will receive from the investment property will count towards your eligibility for an investment loan, as it goes some way to helping you meet your loan obligations.

You may also be able to use your own home as security against your investment property purchase, or access the equity in your home to use as a deposit for an investment loan, allowing you to borrow less, enable smaller repayments, and possibly even avoid paying lender’s mortgage insurance if you can contribute a 20% deposit.

To get started as a property investor can be as easy as being flexible in your expectations. For example, if you have a deposit saved for your first home, consider buying an investment property instead. You won’t be entitled to the same first home owner grants and concessions, and you may need to rent or live at home for a little while longer, but in return you will be investing in a property which will increase in value, building you equity, and which you can leverage down the track to move into a bigger and better first home than you could ever have dreamed of.

Contact Home Loan Finder to learn how you will be assessed by lenders when looking to secure and investment loan

Is now the best time to start investing in property?

With the world still recovering from the effects of the GFC and mortgage stress in Australia at an all time high, you may wonder whether now is really the right time for you to enter the investment market. However, now is exactly the right time to become a property investor in Australia because:

• Competition is down. With first home buyer grants and boosts wound right back, there are fewer first time buyers to compete with in the Australian property market. This means you have a better chance of scooping up the perfect investment property, and at a more affordable price because demand for property is no longer pushing prices far above actual property values. Typically first home buyers and investors are looking for the same sorts of property – affordable, good basic features and therefore a good rental yield – and with demand wanning, you are in a better position to negotiate a better deal.
• Rental yields are improving around Australia. In the last two to three years, the rental yields in most capital cities have been improving, thanks to a combination of higher rents and lower housing prices. This means that where a house would have sold for $400,000 it may now be selling for $350,000 and where it could previously have been rented out for $350 a week, you may now be able to get $400 per week.
• Interest rates are steady. We all knew that interest rates would have to recover from the emergency lows they were at during the GFC, but the recovery has been slow and steady, giving you the opportunity to affordably service an investment loan, and even secure a great deal on a fixed interest rate for the next few years.
• You will need to prove you can service the loan. When applying for an investment loan, you will need to be able to show your lender ‘certainty of rent’ because the rental income can be used to help you service your loan. If the rental yield is uncertain, you can find you need a 20-25% deposit to secure an investment loan.

Why property?

As well as being a secure investment, choosing property as your vehicle to increase your wealth has a number of other unique advantages as well:

• You can start out small. Even starting your investment portfolio with a unit or apartment can reap significant rewards in the future, for a small initial outlay. Plus, if you are able to continue to live at home or share a rental property while you rent out your first investment property, you will soon be able to leverage the equity you have built in your first small investment into a bigger subsequent one.
• Property increases in value where other assets may be decreasing. While property is a less volatile investment than shares for example, the property market is also less likely to lose value – or as much value – as other assets in economically unstable times, making it a more attractive investment option.
• There is more than one way to be a property investment. You don’t necessarily have to directly purchase property to enjoy the advantages of property investment. You may choose to instead pool your funds with other investors in a managed fund which has a property focus, join listed property trusts or property syndicates – options which will open you up to a wider range of investment opportunities such as commercial, industrial or retail, while reducing your personal risk and investment outlay.

How can I guarantee a return on my investment?

Outlaying all of the time and money to organise, research and purchase an investment property can seem like a big risk, as you wait for the returns to roll in. However, what if there was a way you could feel secure in the guarantee of those returns? With some simple planning and a clean investment strategy in place, then you are building a solid foundation for the growth of your investment portfolio. When you know what you want to gain from your property investment, and you know about all of the risks involved, you can more easily manage and avoid those risks.

What are the benefits of property investment?

• Allows you to increase your personal wealth – As the value of your investment property increases, and you are able to reap real financial rewards through rental income and tax deductions you can secure your financial position. Your personal wealth is measured by your net worth, which is not a measure of your possessions, but of the value of your assets, minus what you owe and as you build a portfolio of appreciating assets, your personal wealth grows.
• Property can be a secure and self-sufficient investment. When used as part of a long term investment strategy, property is a very secure option because on average, property prices in Australia double every seven to 10 years, and as a result consistently outstrip inflation rates. Plus, when the rental income exceeds the investment loan repayments the property can almost pay for itself, coupled with tax benefits and deductions of other investment costs.

What are the risks of property investment?

• Additional set up costs. In addition to the repayments of your investment loan, you will also have to cover initial costs such as stamp duty, legal and conveyancing fees, property inspection and valuation fees, and loan application or establishment fees. These are in addition to the deposit amount you are contributing and can stretch your cash flow if you don’t budget for them from the beginning.
• Additional ongoing costs. As the landlord it is your responsibility to maintain your investment property and pay for any repairs, pay for council and water rates, insure your property and any fixtures or fittings, as well as pay body corporate or strata fees for a unit or apartment.
• Rental income may not exceed your outgoing costs. This means you will need to cover the difference from your own funds until the end of the financial year when you are able to claim back your investment costs. You may also have to cover all of the expenses when you have a gap between old tenants moving out and new tenants moving in.
• The value of the property could decline. If you buy a property which is overvalued, or if the area in which you buy suffers a slump, the value of your property and your investment portfolio can suffer.
• You can’t always access your investment funds quickly. If you need to access the cash in your investment property quickly, you can be held up in the time it takes to liquidate your investment with the sale and settlement process. Even if you simply want to access equity in your investment property, you still need to wait for valuations to be conducted and paperwork to be processed.

How do I calculate risk vs return?

All investments will involve a certain element of risk and property investment is no exception. That is why you need to calculate the risk in relation to the returns you will get, and also in relation to your own situation, and how much of a risk you are able to willing to take.

As soon as you invest your money in anything – whether it is cash savings, fixed interest term deposits, shares or property – you are exposing yourself to factors such as inflation, taxation, economic downturns or market drops, all of which can put your investment at risk. Property falls in the middle of the risky investment spectrum and is considered a moderately risky investment, similar to the risk level associated with investing in local Australian shares.

At the same time, the riskier the investment, the greater the returns – when the investment shows a return. While cash may be a conservative investment, it also shows lower returns and has to work hard just to beat inflation; international shares are an aggressive form of investment, but when they are successful they can offer a much higher return.

As a result, property investment falls in between the extremes of conservative and risky investments, as while the property market fluctuates and interest rates are always on the move somewhere, the market does not experience the same extremes.

What tools can I use in my property search?

Finding the right investment property can be the difference between being a successful property investor, and being just an average investor. It is often said that the returns on an investment property are made when you buy, not when you sell, however what constitutes the ‘right’ investment property depends largely on your investment goals, your financial situation and your property management style.


Therefore, in your search for a property which suits your needs, utilise tools such as property valuation guides which can provide your with information about median property values in an area, the value of recent property sales, as well as tell you about the demographic of an area so you can decide on the type and size of property which will appeal to them the most.

How do I build equity?

Equity is the difference between what you owe on your property and what the property is worth, and you can use a portion of that equity to improve your property, pursue other investments, or invest in your next rental property or home.


You can build equity in investment property in a number of ways:

1. Growing the value of the property by undertaking renovations.
2. Enjoying capital growth in your property value as the market increases.
3. Adding more properties to your portfolio, and therefore more opportunities to build equity.
4. Reducing the amount of your loan, to increase the difference between what you owe and what your property is worth.

What do I need to consider when looking at investment loans?

Your ability to successfully manage your investment property, build equity, navigate slow times in the market or time without tenants is also strongly dependent on your choice of investment loan. The loan features you choose and the loan structure you use can affect the returns you make on your investment, so make sure you know exactly how much you are eligible to borrow, and how much you can afford to borrow – how much you can afford to repay.

Also make sure you understand exactly how to make deductions and claim depreciation because the way you use your loan can affect your eligibility for some benefits. For example, if you redraw additional payments made to your investment loan for personal use, you are jeopardising your deductible loan amount.

Make an enquiry with one of our mortgage advisors to discover what investment loans suit your current situation

How do I check my cash flow before investing?

Regardless of the savings you can make at tax time, or the rental income which will come in, you need to make sure that you can maintain a personal cash flow, after meeting your investment costs because there is little point investing in your future, if you can’t maintain your current lifestyle.

To check your cash flow to see if your situation can handle the expenses of an investment property:

• Assess the cash flow of the property. This means looking at the shortfall between the cost of the investment property and its earning potential – this is the actual income you will receive on a weekly or monthly basis, not the wider benefits of capital growth, which don’t help when you have school fees to pay or you have to put fuel in the car.
• Consider what is important to you, and how you are going to structure your loan. If for example you want to cut down on the costs associated with getting an investment loan, you may want to avoid lender’s mortgage insurance. As a result you are going to have to raise at least a 20% deposit so consider whether reducing your savings by this amount, or increasing your home loan to access this equity, is going to put pressure on your cash flow.
• Know the rental yields for your investment area. You can gather the information about rental returns for each suburb very easily, and when you know the returns you can calculate those into a rental income. For example, if the rental returns are 4.5% and the investment property you are looking at is valued at $400,000 the rental income will be around $18,000 a year.
• Deduct your interest charges. On a basic variable investment loan you may have an interest rate of 5.2% and since you have contributed a 20% deposit you can calculate your interest at around $21,000 a year. This means over the course of a year you could be paying $3,000 out of your pocket for your loan repayments.
• Include property maintenance costs. In the course of a year there are also council and water rates, repairs and maintenance to pay which equate to another $100 per week, approximately.

Which investment strategy offers the best return?

There are dozens of different investment strategies which you can follow – you may decide to look for old properties to rent out, you may want to focus on student accommodation, on high end properties or buying off the plan. Before you choose the type of property and the type of tenant you want to target, there are two main investment strategies you have to decide between first – the capital growth strategy and the rental income strategy.

What is the capital growth strategy, and what are its returns like?

• Gives you big returns in the long term. Using the capital growth strategy of property investment you may have to work through short term losses to enjoy long term gains. To secure a property in a high capital growth area, you may need to extend yourself further with a larger loan and therefore higher loan repayments. However, you can still offset your initial losses as your property will be negatively geared, and in the long term your property doubles or triples in value.
• An average annual growth rate of 9% in Australia. The Australian property market has its ups and downs, and there is no accounting for economic crises, but across periods of little to no increase in value, and even through time of property values declining, the property market is still likely to show a strong capital growth as part of a 10 year investment cycle.
• Capital growth also occurs at the time of purchase. Making sure you purchase the right property in the right area at the right price will go a long way to ensuring strong capital growth because if you start with a lower investment loan and property value, but have secured a property in a strong growth area, then you have a long way to go, and a lot of capital growth potential.

What is the rental income strategy and what are its returns like?

• You positively gear your property. Investing using the rental income strategy means that the income from your investment property’s rental income covers your loan repayments and all the costs associated with the property, so you don’t make a loss on your investment. Even though you can claim any ‘losses’ as a tax deduction on a negatively geared property, on a positively geared property you have less pressure on your cash flow from week to week.
• You can positively gear your property by, borrowing less of the property value to keep your repayments lower, finding a property where the value is low enough for the weekly rent to cover the loan repayments, or choosing an interest only investment loan; in most cases the rental income strategy uses a combination of all of these methods.
• You are likely to enjoy smaller capital gains. If your investment aim is to supplement your income with your investment income, then the returns can help you enhance your lifestyle or work fewer hours, and you don’t have to wait until you liquidate your assets to enjoy the returns. At the same time, you won’t forgo capital gains returns either, but they may be lower, and you may find you make less of a profit when you sell your investment, after repaying your loan amount.
• Calculate the investment income you have left after all expenses. To calculate exactly how much of a return you will make in rental income, calculate the rental yield, minus your loan repayments and other property expenses, and after tax, because remember if you are making a profit from your investment, then you will taxed on this investment income.
• The rental income strategy can yield inconsistent returns. When you are calculating the returns you could make using the rental income strategy it is important to compare them to the gains you could make in other investment with the same outlay, to help you decide on their worthiness. Also keep in mind that as house prices rise, rental yield decreases so if you are relying on your rental income for investment returns you will have to stay in the lower end of the market. You are also at risk of not receiving any investment income if you can’t tenant your property, and in times of low rental demand, you may be forced to drop your rent to attract tenants, which then eats into your returns.

What are the steps to calculate rental yield?

Before purchasing an investment property there are a lot of calculations to be made and research to be done to ensure you are making a good investment which will secure strong returns. One way to calculate the returns on an investment property is to look at the rental yield which is the value of the rental income you can expect to receive from your tenants however, it is important that you know exactly how to calculate the rental yield of a property you are considering accurately, as well as ensure that you are calculating the net rental yield to give you realistic figures.

Properties which are likely to produce a lower rental yield will potentially have a higher capital gain which could be your investment goal, it is also important to keep in mind that properties with relatively high yield can be riskier. Luckily calculating or rental yields is easy and you can do it right now with an Excel spreadsheet and the figures for the property you are considering purchasing.

1. Determine the amount of rent you can generate each month. You can do this by comparing your property to similar properties all buildings in the area but make sure you make comparisons with properties which are the same age, have the same manatees and are in the same location, alternatively you can get this information from rental agent. Next calculated your annual gross rent revenue by multiplying your monthly rent by 12.
2. Estimate the vacancy rate of your property. It is unrealistically optimistic to think that your investment property will be tenanted 100% of the time so you can look at the vacancy rates in your investment area to calculate how many months you may miss out on rental income. Real estate agencies keep vacancy rate information in their records and can give you an average vacancy rate for the area you are looking at based on the number of properties they currently have. For example if an agency has 100 rental homes and five other it can vacancy rate is 5%. You can now calculate your net annual rental revenue minus the 5% vacancy rate which is your worst case scenario.
3. Calculate the property costs. This includes land lord insurance which covers the building, liability and fixtures and fittings, your council and water rates and maintenance of the property including a budget for any repairs which may be needed.
4. Calculate your investment loan repayments. Your repayments will depend on whether you are paying an interest only loan or making principal and interest repayments but if you know your loan amount and interest-rate you can calculate your monthly repayments.
5. Calculate your net rental yield. You can do this by dividing your net rental income by a property’s purchase price, where the net income is your rental income less your maintenance costs and loan repayments.

With all of this information entered into your spreadsheet you can now see whether your property is positively or negatively geared, how much cash you will need each month to service your loan and maintain your investment property and you will see exactly how much of a profit, or not, you will make.

How do I decide between cash flow and equity?

Deciding whether you want to achieve a supplementary income now or capital growth for the future will determine the type of investment property you choose and how you set up your loan. Sacrificing ease of cash flow now can help you grow equity in your investment property at the pros and cons of both cash flow and equity are dependent on factors outside of your personal financial situation as well.

The pros and cons of ensuring cash flow in your investment property:

• You can avoid paying lenders mortgage insurance with a larger deposit.
• You can join the property investment market without disrupting your lifestyle. Even if the primary aim of your investment property is to ensure cash flow and a positive rental yield this doesn’t stop your investment property increasing in value. Therefore you are getting into the property market and you have secured a property which is very likely going to increase in value in the future, plus you don’t have to pay for it out of your pocket.
• Making a large investment loan deposit and being left with little investment maintenance money. Be aware that there are more ongoing costs to property investment than just your investment loan repayment and if you pull all of your savings or investment funds into your loan deposit then you could be left with little spare cash in case an emergency repair is needed or if you need to cover a few months rent when you are between tenants.

The pros and cons of an equity investment strategy:

• Equity lasts forever. Freeing up money to ensure cash flow can seem to make your life easier in the short term but that cash is quickly spent and gone. However equity lasts forever because if you are purchasing an investment property so that you can someday retire you want your assets to still be working hard and if you have purchased a property with the intention of securing capital growth then you are in a good position to have your investments continue to grow equity for you.
• You can claim the difference between what you spend on your investment property and what you earn back to pay less income tax. There are very few areas in Australia where the loan repayments on a property will match the rental income you can earn on that property and so most investments will be negatively geared. While this may cost you money from your own pocket and your own wages at the time, come the end of financial year you can claim back the loss you have made in maintaining your investment property and you can actually be in a better financial position because you will get back all of that income tax you normally wouldn’t have seen again.
• You must be confident in managing your cash flow. At the same time you need to be sure that your budget can handle the initial outlay and the wait for the tax refund because there are other loan repayments, repairs and rates which need to be paid on the spot and you don’t want to jeopardise your current lifestyle for one you are trying to achieve in the future because you could end up with neither.

What are the costs of property investment?

As a rule of thumb you will need 1% of the property’s purchase price to cover all of your expenses from loan repayments to maintenance. Unfortunately if you bought a $100,000 property you are unlikely to be able to charge $1000 a month in rent, to find out more about where the difference between your rental income and expenses will lie.

The upfront costs to secure an investment property include:

• Property inspections. Just because you are not going to be the one living in the property is no reason to be lax on inspecting the quality of the building. Make sure that you have complete building and pest inspections completed before you finalise the contract of sale because any expensive repairs you have to make down the track because of structural or pest issues are going to cut into your investment returns regardless of whether you are using a cash flow or a capital gains investment strategy.
• Property research. Finding out about the vacancy rates, the rental yields and the demographics of the area in which you are considering property investment can sometimes cost you literally, if you have to pay for such reports, but most often you are spending your own time in this research, not to mention the time you spend searching for properties with investment potential.
• Stamp duty. This cost will be added to the purchase price of the property and is dependent on the state or territory in which you are buying and is calculated based on the value of the property. Stamp duty must be paid at the time of purchase and whether you pay from your own pocket or you add the stamp duty costs to your loan amount you can be looking at tens of thousands of dollars in tax which has to be paid right then, but which can be claimed back over the first five years of their investment.
• Transfer and registration fees.When a property changes hands to title must be transferred and registered in your name and these transfer and registration fees must be paid to the State revenue office.
• Loan establishment and settlement fees. The amount of loan establishment fees will depend on the lender and cover your bank’s administrative and legal costs in organising the paperwork and settling your new loan.
• Legal and conveyancing fees. It is your conveyancer or property lawyer who will oversee the exchange of contracts, make sure you are not signing a damaging contract and who can help you organise transfer and registration for your new property.

The ongoing costs to maintain and an investment property include:

• Water and council rates. As the landlord these are your responsibility regardless of whether you have tenants or not.
• Body corporate fees for an apartment or unit. If your investment property is part of a block of units then you will have to pay body corporate fees which will cover maintenance of general areas and the building, and having this maintenance covered can save you some ongoing costs. Also if you are paying body corporate fees for the monitoring and maintenance of your apartment or unit you may feel that you don’t need to pay an agent to manage the property as well if you want to manage your tenants yourself and save on this cost.
• Property and contents insurance. Your tenants should have insurance to cover their own belongings are you need insurance in case they damage the property, on the property itself, legal liability insurance as well as insurance to cover content such as carpets, curtains and other fixtures.
• Repairs and maintenance. Not only do you need to pay for all of the repairs and maintenance on the property you need to make sure you have access to your maintenance fund right away.
• Loan repayments. Your decision to make interest only or principal and interest repayments will depend on your investment goals and your own budget but the difference between interest only on principal and interest repayments is usually not significant.
• Agent fees. If you are not yet lucky enough to be a full-time property investor you will probably need an agent to manage your property, find and interview tenants, chase up rental payments and organise inspections.

As a guide to the ongoing costs of owning an investment property if you own a house you should allow 30% of the rental income to cover the above costs and if you own a unit allowed 25% of the rental income. Also make sure you have enough funds available to cover at least four weeks rent each year in case you are without tenants. How do I find the right property for an investment? When you are searching for the perfect property investment you are looking for very different things as compared to searching for a property to call your home. Instead of considering whether the property is close to your parents or whether you like the colour of the kitchen you need to consider factors such as location and amenities and how the tenants you are likely to attract are likely to feel about the colour of the kitchen. How do I choose the location?

• Consider why people would want to live there. While you shouldn’t get too personal about your investment property choices you should put yourself in the position of your tenants and consider why people would want to live in the area of your investment property. Consider whether the area is well serviced by transport and easy to get to, make sure it is close to shops and schools, medical facilities and places of employment so people don’t have to travel to far to work.
• Find out about new construction in the area. New construction can easily keep you from a good too bad location because new shops medical centres or housing developments could be good for the property value of the area, widening of roads to create highways or the addition of industrial parks can be detrimental to the attractiveness of your investment property.
• Consider the demographic of the area. Before you force another rental property into an area which is already flooded by investors look into the demographics of your location. For example find out about the population levels and growth levels of the population, because no population growth negative population growth suggests high vacancy rates and falling house prices in the area. Find out about the average age of the population and wheat industries the area is dependent on as the success of those industries will dictate the wealth and position of the population of the area; finding this information can be as simple as checking the local newspaper for the number of positions vacant.
• Match the demographic of the area to your property. If you choose and investment property location which is near a university for example then students would be a good target tenants and units may therefore be an appropriate investment because they will offer more affordable rents.

What type of property should I choose?

Whether you choose a house or unit, a new property or one in need of repair depends very much on the investment strategy you have chosen and your own cash flow situation. Therefore consider the different types of investment property choices, and whether their benefits can benefit you:

• Land is desirable. Even in a country as large and sprawling as Australia land is scarce and property with a higher land content is desirable for you and your tenants. Not only will a larger property with more land offer you a greater capital growth opportunities by the property with more space, a backyard and a place to park several cars undercover is very appealing for the average Australian renter.
• There is competition for units in small blocks. If you can find a unit in a block with just a few other units then you are likely to never have a problem trying to find tenants because small blocks of units are the most popular.
• More bedrooms are more popular. This may mean you choose a unit with two bedrooms instead of just one or you look for a house as an investment property because the more bedrooms they are the more people can live there and share the cost.
• Simpler is better. The cost of everything is rising and if you are looking at investing in a unit consider buying in an older unit block because the property will be cheaper to buy and you can therefore rented out more cheaply to those people who don’t want to pay an extra $50 or $100 a week rent just for red feature wall. At the same time make sure that your investment unit has the essentials such as an individual laundry so your tenants don’t have to trek to the laundromat or a shared machine.
• It is easier to positively gear a unit. The initial purchase price of a unit will be less than a full sized house simply because it is smaller however the difference between the rent you can get for a unit does not show the same difference. For example you may be able to charge $200 a week rent for a unit 10 minutes away from the CBD and $250 a week rent for a house 45 minutes away from the CBD to the difference in rental income is not significant but the purchase price of the unit versus the house makes it easier for the rental income to cover your expenses.
• House tenants can have better longevity. In renting out a house with three or four bedrooms and a backyard you are more likely to attract a long-term tenant such as a young couple or family who can’t afford to enter the property market themselves or would prefer to pay rent in an area they can’t afford to buy in. In securing a tenant who wants to stay in your property for the long term you are avoiding the risk of having to cover your loan repayments without rental income.
• Government subsidised housing. If you can find a property which has the rent subsidised by the government for lower income earners you may consider this as a guaranteed rental return on your investment. However just keep in mind that tenants who are attracted to government housing are likely to be less inclined to take care of your property and may also be unemployed – which is why they can’t afford to pay the full amount of rent on their own – and so are at home during the day, increasing the wear and tear on the property.

Which features will most appeal to my tenants?

Appealing features will depend very much on the demographics of the area in which you are investing and if your research has turned up that the area is popular with retirees who are downsizing in a property with stairs is going to be less appealing; at the same time if you are looking to attract a family then consider whether the kitchen is up for higher traffic use and the property is close to schools and public transport.

There are investment property features which will appeal to tenants across the board such as:

• Balconies or patios for a place to enjoy a barbecue or a quiet morning coffee.
• Internal laundries for convenience and privacy.
• Parking for both your tenants cars and those of their visitors.
• Avoid features like swimming pools as these require a lot of maintenance and can be expensive to fix when they break down.
• If the property has air-conditioning this is of course an appealing feature but make sure it is new and has been well maintained because this too can be an expensive repair.

Do I need to know about the property’s history?

Yes you do because knowing if the property has been rented out in the past or owned by the same family for the last 20 years will give you a good starting point for finding out how much work may need to be done and whether there are likely to be structural issues which the previous landlord may have ignored but which a homeowner is more likely to have fixed. If repairs or maintenance have been undertaken or if additions or renovations have been done asks to see plans and council approvals if necessary to see how the work was done. An undercover deck area can be an attractive feature for many tenants but is not something you want to deal with its decking is not the right height or has not been treated properly and needs to be replaced when it rots. Also take the time to consider the age of the property as you look at whether work needs to be done to upgrade fixtures and fittings for a more modern look or add in those extras which most people have come to expect such as fly screens on the windows, multiple phone points or a dishwasher in the kitchen – or even just the provision for a dishwasher.

Do I need to know about the areas crime rates?

It is a very simple trip to stop by the local police station and find out about the crime statistics for auto theft and burglary in the area. If these sorts of crimes are high then your potential tenants are likely to know this as well and is going to be hard to attract good quality tenants no matter how attractive, feature packed or modern your investment property is. Purchasing an investment property in an area with a high crime rate will also mean that your insurance premiums will be higher and if your property is targeted for repair costs can be crippling.

Does the property meet my needs?

• Buy and hold. If you are looking to buy an investment property and rent it out for the long term so that you can enjoy maximum capital growth then you would be looking for a property which is attractive to the demographic of tenants in the area, one which needs little work to repair it and will require minimal maintenance, and one which as the basic features and is in a stable area to allow it to steadily increased in value.
• Renovate and sell. If your aim is to find a cheap property, upgrade it quickly and sell it for a profit then you need to make sure you do careful research into the exact costs of the renovations and repairs which need to be done. Look into the costs of materials and the costs of the labourers who can do the work because not only are you probably not qualified you are going to have to take the time out from your day job to do repairs yourself. Also look at properties which will allow you to make unique improvements because investors buying a rundown property giving it a coat of paint and an IKEA kitchen our operating in just about every suburb of Australia and so you need to look for the property which has perfectly positioned structural walls which will allow you to easily open up a lounge room and turn it into a home theatre or one with plenty of land which will allow you to add a lock-up garage.

How do I find the best investment loan?

There are literally hundreds of home loans currently on the market and there are almost as many features you can add, change or remove to customise your investment loan for your needs. However the first thing you’ll need to do is keep your financial situation and investment goal is clear in your mind, and then learn more about each of the loan features to help you decide whether they will be of use to you.

Do I need an interest only loan?

Features and benefits of an interest only loan for investors:

• Interest only loan. When you are an owner occupier you are repaying your home loan with the intention of eventually owning the property. However as an investor this is not always your aim and so you may not want to make traditional principal and interest repayments. Instead you can choose an interest only period, usually from between 1 to 5 years, where your investment loan repayments are made up of only the interest which has accrued and you do not pay down any of the original loan amount.
• An interest only loan means smaller repayments. Because your monthly repayments are made up only of interest charges rather than principal and interest charges your commitment is lower which can be helpful if your property is negatively geared and you are paying the repayments from your own pocket rather than from rental income.
• Interest charges are tax-deductible principal repayments are not.Making interest only repayments makes it easier to track your tax deductions and calculate the true returns from your property because the total amount of repayments you have been making are tax-deductible.
• Interest only terms are easier to renegotiate. You may already be familiar with glowing terms within loan terms from fixed interest rate loans which also often fixed and interest-rate fall between 1 to 5 years however at the end of the fixed term the interest rate reverts to an often higher variable rate. In the case of interest only repayments it is easier to renegotiate a new interest only term or take the opportunity to sell your investment property with lower exit fees.

Make an enquiry with a Home Loan Finder mortgage advisor to discover the top investment loans on the current market

Do I need a line of credit loan?

• Gives you access to a pre-approved amount above your loan amount. You can secure a line of credit on your investment loan up to a portion of the value of the equity available in the property or simply above the loan amount with a line of credit secured by your own home or another investment property. You then have access to this credit as a lump sum or you can draw down on your line of credit when you need it for maintenance, repairs or improvements. You also don’t usually have to make repayments on a line of credit until you have reached the credit amount and you only pay interest on the amount you have drawn down.
• It is like having another loan ready and waiting. If you are serious about property investment then you know you need to always be on the lookout for the next great deal and it is easy to miss out if you are delayed in loan applications and preapproval processes. However if you have access to a line of credit that you can draw down on this amount and use it to secure your next bargain investment.
• You can use your line of credit to make repayments on your loan. If you are disciplined, have calculated and accurate budget and are secure in the knowledge that your investment property will increase in value then you can simply add the cost of a loan repayment to your line of credit amount so you do not feel the effects of negatively gearing your property and your line of credit picks up the shortfall.

Should I choose a loan with a honeymoon rate?

• Introductory or honeymoon interest rate. Many lenders use a lower initial interest rate to attract new customers and the rate may be fixed lower than the current interest rates or may attract an ongoing discount for the first six or 12 months. At the end of the introductory period the interest rate on the loan reverts to the standard fixed or variable rate for the loan product.
• Low introductory rates can suit initial improvements. If you are an owner builder or DIY investor then you may be planning some significant renovations to your investment property which make it impossible to rent out for some months. Therefore a lower interest rate and lower repayments may be just what you need to keep the cash flow coming until you are ready to add tenants.
• Your interest repayments are your tax deduction. While saving on interest is always an attractive option just keep in mind that the interest repayments you are making on your investment loan will be going towards your tax deductions at the end of the financial year and if you reduce the amount of interest you pay you can be reducing the deductions you are eligible for.

Do I need a redraw facility?

• Encouragement to make additional repayments because you can access them. Any funds you pay into your loan above the minimum monthly repayment will be available again to redraw. Each provider will have their own rules and their own fees regarding how much you are allowed to redraw at a time, whether there is a minimum redraw amount, and if you are charged a fee. Redraw can also often be completed through internet banking, but some providers may require you to request a redraw in writing.
• Only if you use your redraw funds for investment purposes. While the entire amount you have borrowed to purchase your investment property is working as a tax deduction, if you make an additional payment to your investment loan when you have spare cash, but decide later that you need that amount back to pay a household bill, or make a personal purchase, then you have reduced the amount of your loan which is for investment purposes. For example, if you are repaying an investment loan of $200,000 and you make an additional repayment of $5,000 but then redraw those funds for a personal purchase, you are still making repayments on a $200,000 loan, but only $195,000 of it is for investment purposes now.  

What are the benefits of a 100% offset account?

• A separate linked account to save you interest. An offset account is opened at the same time, with the same provider as your investment loan and is directly linked to your loan account in that the balance of funds in your offset account, offset 100% of the interest charged on that amount of your loan. For example if you have a loan of $200,000 and you have $10,000 in your offset account, you only pay interest on $190,000 of your loan amount.
• Save you time or repayments. If you are making interest only repayments on your loan then paying less interest each month thanks to your offset account can help with cash flow. If you are aiming to pay down the principal amount of your loan too, you can continue to make the same minimum monthly repayment each month, and the amount you would have paid to interest is now going towards your principal.
• Keeps your loan separate from additional funds. You can use the fund in your offset account as your emergency investment fund, because while you’re not using them they are saving you interest but if you do need them they can cover a few weeks without a tenant, or damage after a storm. Plus, you have separate accounts and balances to easily keep track of your funds.

Should I use an all in one loan?

• Your savings and transaction accounts within your loan account. Rather than having a separate savings account, transaction account and cheque account, you can choose an all in one loan where your wages, your savings and your investment debt are all in one account. This can save you money and time in managing different accounts with different providers, plus there are no more monthly account fees spread across dozens of different providers.
• Every extra dollar offsets interest. Every dollar above the minimum monthly repayment amount which is in your all in one loan account offsets the interest charged, in the same way as an offset account. Therefore, since interest is calculated on your investment loan daily, you can be saving the maximum amount of interest by having all of your wages, savings and other income all in one place.
• Your personal and investment funds are combined. Unlike an offset account which is a separate account with a separate balance you can clearly differentiate, your all in one loan combines your investment and your personal finances in one account. This means you will need to be highly disciplined and organised to keep a track of each ‘balance’ within the one account.

Do I need a split loan?

• Both a fixed and a variable interest rate loan. A split loan is like having two loans in one because you have the features and interest rate of a fixed rate loan on one portion of your loan, and the very different features and interest of a variable rate loan on the remaining portion. You can also choose the way you split your loan, whether you want a 50-50 split, a 60-40 split, and whether you want the larger or the smaller portion fixed or variable.
• A good option if rates have started to rise. A fixed interest rate term is best entered into when rates are at their lowest, but if they have already begun to rise, fixing just a part of your loan still protects you from the coming rate rises, but doesn’t completely lock you into the already higher fixed rate.
• Flexibility for investors looking for another property. If you have one investment property and one property as your home, then you can split one loan into three components, having a principal and interest loan for your home, paying interest only on your investment and adding a line of credit to help you secure your next investment.

Do I need a construction loan?

• Offers you a progressive draw down of funds. Buying a block of land and negotiating exactly what you need in an investment property with your builder is usually going to result in a smaller outlay of funds – you can buy a $100,000 bold of land and build a $150,000 house on it but the end result is more likely to be valued at $350,000 which is a great return on investment. With a construction loan you are approved for the entire amount you need to pay your builder to completion, and you can draw down on that amount at significant times during construction.
• You only pay for the loan amount you have used. A construction loan is an interest only loan until the entire amount has been used, so you are able to maintain manageable repayments during the construction period when you’re not getting any rental income to help.

Do I need a bridging loan?

• You buy first and then sell. If you buy a new investment property and intend to use the proceeds of the sale of an existing property to pay for all of part of the sale, you will need a bridging loan. You are essentially paying for two loans at the same time, and the interest on a bridging loan can be much higher than usual as well, but if the new investment is perfect and important, you want to secure that sale right away instead of missing out while you try to liquidate your existing investment.
• The risk of being stuck with two properties at once – is that such a bad thing? When it comes to investment properties, the more you have the greater your potential for capital growth, so while it can be risky to buy another investment before you have liquidated the cash from the existing one, perhaps you should consider whether you could afford to be permanently ‘stuck’ to increase your investment portfolio.

Should I choose a fixed or variable interest rate loan?

• A fixed interest rate means fixed repayments. This allows you to more easily budget for your loan commitment each month as the repayment is the same for the full fixed term, often up to five or ten years. This can be an added benefit because while your loan repayments stay the same over a ten year fixed period, your rental income will have increased as you renegotiated rental contracts over the years. While you may be making slightly higher repayments to begin with on a fixed rate, if you have done your calculations of the interest rate cycle carefully, you can find yourself making significant savings as interest rates rise.
• A fixed interest rate means a fixed loan. A fixed interest rate loan term is a lot harder to get out of than a variable rate loan – not harder literally, but often financially. To break a fixed loan contract can often result in tens of thousands of exit fees and if your circumstances change, you can’t afford an investment property anymore, or you have the opportunity to sell to a developer you can lose a lot of your capital gains in fees.
• A variable loan is more flexible and feature packed. You are much more likely to find a wide range of loan features on a variable rate loan, and they are more likely to be included with the loan’s annual fee, rather than you having to pay extra each time you use a feature. For example, if you think you will be using redraw facilities and you want to be able to use an offset account with your loan then you may get a better deal with a variable rate. Of course you also have the flexibility of enjoying rate cuts when the Reserve Bank reduces official interest rates, as well as other flexible features such as loan portability.
• You can’t budget, you have to be prepared. As much as analysts predict where interest rates are headed, no one really knows so you can’t always budget for what your loan repayments will be next week or next month with a variable rate loan. At the same time, you can use features such as additional repayments to build up a buffer, or an offset account to save you interest charges and keep a buffer set aside to supplement repayments if rates rise.

Should I pay my interest in advance?

• Pay the interest for the coming year before it is charged. Agreeing to pay your interest in advance often awards you an interest rate discount, as well as the benefit to claim the interest costs on your tax a year earlier, because you don’t have to wait until the end of the next financial year. Paying interest in advance may not be an ongoing option, and may instead be offered as part of a shorter loan term, of between one and five years.
• Don’t over extend yourself. Paying tens of thousands of dollars of interest for the coming year in one lump sum will require you to have strong control over your finances to make sure you can go without those funds week to week.

How should I structure my investment loan if I also have personal debt?

While the personal debt you have to repay your principal place of residence is important in providing you and your family with a stable home, to you the investor, you want to repay your home mortgage as quickly as possible because you can’t use it as a tax deduction. At the same time, you don’t want to be using your salary to repay your investment loan anyway, because you want to capitalise on the shortfall between your investment income and investment costs as this is how you negatively gear your property.


Most investor structure their home and investment loans to use the equity in their own home to allow them to purchase an investment property, and will then take advantage of the maximum interest only period on the investment loan which may only be 10 years, after which you have to pay both principal and interest repayments. Most investment properties are therefore negatively geared where you have to use your personal income to subsidise the difference between the interest and investment costs, and your interest income. However, there is now a more tax effective way to structure your investment loan if you are still repaying your home loan, to allow you to deduct capitalised interest, or compounding interest, on your investment loan. You can choose to channel as much of your personal income as possible into repaying your home loan, while using an investment line of credit to accrue from the shortfall between the investment costs and the rental income.  


Previously the ATO have been unclear about how and how much compounding interest you are entitled to deduct on your investment loan and if you structured your investment to use a line of credit and intended to keep adding to the line of credit, your compounding interest charges would continue to grow. Then, in 2002 the Commissioner of Taxation announced that the principles of deducting compounding interest were the same as those governing the deduction of ordinary interest, so you could potentially pay off your home loan much sooner, while maintaining an investment property, but allowing your line of credit to pay for it.

How much difference does my choice of investment loan make?

Opening and managing an investment loan is not anything like managing your home loan – different rules apply, different motivations drive you and the end goal is also often very different. Therefore, you can’t approach your choice of investment loan as you would your choice of home loan, just as you can’t approach your choice of investment property as you would your choice of a family home. Instead, make sure you follow these important considerations when choosing an investment loan:

• Choose interest only. Choosing an interest only investment loan not only makes for easier reporting at tax time because you can simply claim all of your loan repayment, it also leaves more of your personal income free to pay down non-deductible debt. Whether this is your home loan or other personal debt, you want to be putting as little of your own money as possible towards an investment loan for the maximum benefits. If you don’t have other debt to repay, you can use the funds you would be paying towards principal repayments to build an emergency fund for investment maintenance or repairs.
• Choose the longest interest free period available. The goal of making interest only repayments is that when it comes time to sell, the sale price of the property will more than cover the amount you paid for it initially, and the difference between the loan balance and the sale price is your profit. You will then need to consider when you may plan to sell the property and pay out the loan because interest only periods do not last the entire 30 year term of the loan. You can often only choose an interest only period of up to 10 years, but after this time you may be ready to sell and invest in a new property or venture.
• Use a line of credit as a buffer. You can have a line of credit available on your investment loan, but you only pay interest on the amount you have drawn down – plus this interest is deductible as well. You can then have extra credit available if there are emergency repairs required, if you have to cover more of the repayment in between tenants, or you can use your line of credit to cover all of the shortfall between your rental income and your loan repayment so you are not paying anything out of pocket for your investment. Just make sure you use your line of credit for investment expenses only.

How do my tax implications change when I have an investment property and how can I benefit? The tax benefits of owning an investment property should be just one of the reasons you invest, and should not be your motivating factor. The aim of investment should always be to show a profit on the investment, whether through rental income or capital gains, sooner or later the investment should show a profit, not a loss. Remember that the benefits of negative gearing are a by-product of the investment’s worth and capital growth, because you will have to wait until the end of the financial year to see benefits from negative gearing, so make sure you don’t over commit yourself to a property you can’t afford just to make some deductions. So, read on to find out about how to maximise your tax benefits while you wait for your investment to appreciate in value.

What is negative gearing and how can I benefit?

Negative gearing is when the costs of maintain your investment property throughout the year are more than the rental income you receive. These costs include:

• The investment loan repayments.
• The council and water rates.
• The property insurance.
• Maintenance and repairs required on the property.
• Body corporate fees.

While you need to be able to initially afford to negatively gear your property and cover the short fall between the rental income and the expenses from your own income, the benefits come at the end of the financial year when you can claim this shortfall as a deduction on your tax return.

How can I make tax deductions from my investment?

Every cost involved with purchasing, managing and maintain your property can be claimed as a deduction on your tax return at the end of the financial year. You can also claim for actual expenses you have had to outlay, as well as the depreciation of assets or costs you have spent on the property. That is why you need to keep detailed records from the very beginning of your property search to make this reporting easier at tax time.

Deductible investment property costs include:

• Purchase costs. This includes all of your conveyance fees and legal costs, the agent commission, advertising, legal fees and stamp duty on your property, and any travel expenses you incurred in your property search or contract or loan settlement.
• Advertising for tenants.
• Body corporate fees or strata title fees. These are applicable if you have purchased in a unit or apartment block, and cover the maintenance and repairs of communal area.
• Borrowing expenses. Including mortgage insurance, title search fees, registration of mortgage, stamp duty and loan establishment fees, these are not deductible upfront, but either over the term of the loan, or over five years, whichever is shorter.
• Capital works, building construction costs. This includes engineering costs, drafting, architect fees, surveyor fees, foundation and excavation costs and building approval fees for example council approval costs.
• Capital works, structural improvements. This includes costs for extensions, alterations and improvements to sealed roads, driveways, car parks, retaining walls, fences and gates constructed after 26 February 1992.
• Cleaning costs. This includes internal and external cleaning and if you do the cleaning yourself you can only claim the costs of the materials not for your own labour.
• Agent fees. Your real estate agent may charge you a commission and a management fee on the property and the management fees which are charged as a percentage of the rent are deductible but the commission on the sale is not.
• Depreciation. You can claim for the reduction in value of items such as furniture, fixtures and fittings, for example you can claim depreciation on the stove.
• Gardening and yard work. You can claim dumping fees, mower expenses, tree lopping, a replacement garden tools, fertilisers, sprays and replacement plants.
• Insurance costs. This includes the insurance on the building, the contents, public liability and your landlord insurance which covers default in rent.
• Interest on the loan. You can claim the interest on your loan to purchase the property and any loans to build, improve or repair as long as the loan is for income producing purposes.
• Land tax, Council rates and water rates.
• Office supplies. You’re going to need stationery, rent books, postage, general suppliers and you can also claim a business percentage of your computer which all help you manage your investment.
• Pest control. This includes the cost to pay pest control contractors and the purchase of sprays.
• Repairs. If you are a parent item to its original condition or you replace an item with a similar parts or materials you can claim those costs. However if you repair an item with an improved item then you will need to be included as a new asset. Also repairs undertaken within 12 months of you purchasing the property are not allowed as a deduction. Painting, cleaning or other repairs at the end of the tenancy are allowed deductions to return the property to its original condition.
• Telephone expenses. Make sure you take note of any calls you make to the tenants to your agent or to arrange repairs as these calls are deductible.
• Travel. If you travel to collect the rent or to do repairs or inspections or to prepare the property for new tenants you can claim vehicle travel, airline travel, accommodation, car hire and meals.
• Foxtel. If you provide Foxtel in your property you can claim the installation costs.

What is capital gains tax and how is a calculated?

Capital gains tax is charged on any capital gain you make from the sale of an asset which was acquired after 19 August 1985. You must pay capital gains tax if your capital gain exceeds the capital loss in any financial year and any capital gains must be reflected in your tax return for the relevant year and is then taxed according to your marginal income rate.

How can I reduce my capital gains tax?

It is important to keep details of all expenses associated with the purchase and management of your property as these can go towards your cost base and reduce the capital gain you have to pay, for example legal fees and stamp duty increase your cost base and in turn reduce your capital gains liability. You can also reduce your capital gains by 50% if you own your property for a full-year excluding the purchase and sales dates and the property is not in a company name but is in your name or a superannuation entity or trust. This means that if you pull your property on the on 12 January 2005 and sold on 12 January 2006 when you exclude the purchase date and the sales date you have only owns the property for 363 days.


You may also be eligible for a full exemption from capital gains tax if the property was your sole dwelling. You can then rent out the property for six years but after that time you must return to live in the property for acceptable period of time to be able to rent it out again. You can repeat this process indefinitely and if you rent out your house for the six-year period then leave it vacant you are still exempt from capital gains tax. You can also secure partial exemptions from a portion of the capital gains. For example, if you rent out your property for eight years and make a capital gain of $400,000 then you may only have to pay capital gains tax on a quarter of the gain, because two years out of the eight years exceeded the six-year exemption. This brings the amount to be taxed down to $100,000 and since you are also eligible for the 50% discount for holding the property for more than 12 months you will only be taxed on $50,000.

What steps do I need to follow to manage my investment?

1. Work with experienced professionals. Managing your rental property can be and is a full-time job and while you want to remain involved in the management of your investments are smart investor knows when to seek help. Therefore find an agent who is experienced and well referenced to help you manage your investment property. Your agent will be up-to-date with residential tenancy legislation, they will know the local vacancies and rental movements they may even have a background in repairs and maintenance and as a result have a long list of reliable and affordable tradespeople. Your agent will also be aware of housing price movements and other factors which can influence insurance and property taxation to make sure your investment is a success. Then make sure to have an agreement with your agent in writing which covers all the services and costs you expect from them.
2. Find a tenant. Securing a good relationship with a good tenant is just as important as building a good relationship with a good agent because if you can find a tenant you can rely on to pay on time and keep your property in good condition then you are going to save yourself a lot of time and hassle down the track. It has been proven that placing rental properties on the market just below market value attracts the best reference to tenants and leads to minimum levels of vacancy, arrears and repairs. In reviewing tenants always paid close attention to their reference checks from their previous real estate agent or landlord and from their employer. If possible ask questions of your prospective tenants’ accountant, lawyer or banker, to gain their opinion on whether the person would be able to pay the required rent and keep the property in good repair. Also remember not to be swayed by personal references as friends and family are unlikely to give a bad report.
3. Remain involved. To make sure you maintain an accurate picture of your investment make sure your agent provides you with: a monthly statement of all income and expenses, with the rent cheque banked directly into your account; an annual written report of the state of repair of the property inside and out and general cleanliness; a six monthly written report on the kerbside state of the property; a six monthly written report on the current value of your property and the local vacancy rate of the area; and an annual written report on the current realistic sale price of your property.
4. Attend property inspections. While you should allow your agent to organise the inspection appointment and let them do all the talking it is still a good idea for you to see the property for yourself while maintaining as much anonymity with the tenant as possible.
5. Remain in control. During the first 3 to 6 months of your relationship with your agent you need to be able to build up trust and until that happens make sure that your agent refers all expense items to you before spending money on your property, with the exception of emergencies. After the six-month period set the limit with agent about the amount they are allowed to spend without your approval, this amount is usually one to 2 weeks rent.

Property investment is not something to be ventured into lightly and before you can even start searching the papers for a property with potential you need to be clear about your investment goals and your own financial situation. That is why at Home Loan Finder we have created this guide and aimed to cover all the information you need to be able to look at your situation and decide how best to structure your property investment, your management systems and your investment loan so that you can achieve a balance between cash flow and capital growth which is easy to manage now and has strong potential for your assets to appreciate in the future. We have also aimed to show you that understanding the tax implications which come with an investment loan needn’t be difficult and there is more than one way to manage your finances. If you are looking for more personalised advice on your investment portfolio or investment loan contact Home Loan Finder now and we can answer any questions which weren’t answered here.

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  There are many types of home loans for investing in property. Read this article and find out which one suits your investment strategy.
• Guide to Investment Loans
  Read this guide to investment loans and find out what loan is best suited to you.
• Finding the Right Investment Property
  Finding the right investment property requires a lot of research. Read this article to find out how you will be able to find the best investment property available to you.
• Choosing the Right Investment Properties
  Choosing the right investment property requires you to make many decisions. Read this article and find out how you can find the best investment property.
• Choosing the Right Investment Loan will Deliver Better Returns on your Investment.
  Choosing the right loan will save you money and will deliver better returns on your investment property. Read this article to find out more.
• Choosing An Investment Property
  Choosing an investment property can be very difficult. Read this article to find out how you should choose an investment property so you will make the most money.
• Choosing an Investment Property
  Choosing an investment property can be difficult. Read this article to ensure that you choose the right property.
• Capital Gains Tax
  Read this article and find out when you will have to pay capital gains tax and when you may be able to avoid it.
• Buying and Managing an Investment Property
  Buying and managing an investment property can be very confusing and if you do not know about all that you are required to do you may find that you will have to pay more than you expected. Read this article to find out how you can effectively buy and manage an investment property.
• Business and Commercial Loans
  Business and commercial loans are a great way for people to invest in other ventures. Read this article to find out more.
• Borrowing and Negative Gearing
  Negative gearing is a great way to receive tax benefits from your investment property. Read this article to find out more about borrowing and negative gearing.
• 5 Tips for Financing a Property
  Read this article to read our 5 amazing tips for financing a property. These tips will help you ensure that your investment is secure.
• Tough times ahead; How to manage your mortgage
  In all cases ensure that you keep your lender fully informed at all times of your true financial situation. It is when you start defaulting that your good credit name becomes lost. This is a situation to avoid at all costs and if you can do this successfully your lender, in most cases will stand by you through both good and bad times.
• Need Some Money? Unlock the Equity in Your Home
  A Line of Credit home loan can be a very valuable financial tool that can make home buying a very worthwhile and enjoyable experience if managed properly.
• Median Sydney home price to top $1 million by 2020
  The future is always hard to predict and we may well see government intervention to even out the prices of future housing through increased public housing and better infrastructure which could relieve demand pressure. However, in the meantime it is an investors dream and you could well benefit from the situation if you move now.
• Margin Loans, Trading in the Buffer Zone
  Much like any other investment, there is always a certain risk involved, margin loans trading in the buffer zone are no different but large rewards can be obtained from large investments - if the risk is affordable.
• Managing Your Margin Loan in a Volatile Environment
  Have a strategy in place just in case things go wrong; have a plan whereby you can reduce your level of gearing quickly when necessary, be ready to move into more defensive stocks if required, consider moving into a managed fund and above all have a sufficient cash flow at the ready that you can access without notice.
• Guide to Interest Rates
  The recent Global Financial Crisis (GFC) could have had a much more devastating effect in Australia if the RBA hadn't lowered interest rates as they did during the peak of the crisis. This along with the Federal Government quick action in introducing their two economic stimulus plans prevented Australia from going into recession as most other economies did at the time.
• Gearing Into International Shares
  Gearing into international shares is a realm of the experienced investor with many pitfalls but an investment opportunity that is growing in Australia as international share holdings become more accessible on the Australian market.
• Freebies for the picking: Home loans with extras
  Some freebies can be real; so too are many offered by the various lenders to take up their product be you a first home buyer or otherwise. It all means you must be critical when being offered something for nothing as it often isn't. It is sometimes best to opt for the lowest interest rate as this is the best freebie of all in the long term.
• Easy, Low-cost Access comes to Managed Funds
  By investing in a managed fund you get the benefit of having a professional fund manager handling your investment portfolio on your behalf. You will of course lose control over where your funds are specifically placed but taking into account the large number of managed funds out there you will be able to pick one that better reflects your interests and one that deals with the type of stock that you would be more likely to choose yourself.
• Company Options and Exchange traded options, What's the Difference?
  Exchange traded options give investors an avenue whereby they can access a company’s share price via a lower price. Company options could however expose the shareholder to a greater risk if the company share price should drop and there is no dividend paid.
• Borrowers snub home loans after rate hikes and lower incentives
  The big lenders may not be so inclined to lend the large amounts as they have in the past. This may not be a bad move as it may see home buyers looking for cheaper more affordable homes.
• Guide to Mortgage Fees
  Don't ever believe that when negotiating a home loan it is as simple as paying a deposit, borrowing a certain amount from either a bank or non-bank lender and repaying this debt plus a certain interest to cover the costs of administering the loan. This is what many lenders would like us all to believe but in reality there are many , many, more fingers in the pie.
• Where to make the most money in 3-5 years
  To make money in property you must have the right advice. Read this article and find out where you can make the most money in the next 3 – 5 years.
• Investment Property Australia
  If you are considering purchasing an investment property in Australia you should read this article. This article will tell you how to find the best property, best loan and how to save money.
• Investment Home Loan
• Smart Tips To Choose A Property Management Company
  So you've finally gotten yourself an investment property and now you are looking to get it managed by a capable property manager. One of the hardest parts of finding a property management company is the act of choosing them, based on costs and services...
• Commercial investment loans
  If you are considering entering the property investment market, commercial investments may better suit your needs, your finances and your personality.
• FHA Home Loan Refinancing
  If you are on a FHA loan and you would like to refinance now you can. Read this article to find out about the FHA streamlined and cash out options.
• Share Investment Loan
  If you would like to borrow money to invest in the stock market and receive the benefits from the shares read this article and find out more about the share investment loan.
• Residential Property Investment
  Read this article and read our tips on how to get a great investment property with no hidden costs.
• Residential Investment Loans
  Investing in residential property is a stable investment for the first time investor. Read this article to find out how to maximise the return you get from the residential property investment.
• Real Estate Investment Property
  When you buy a real estate investment property it is essential that you find the best deal that is available. Read this article to see the 4 tips that can help you maximise your return.
• Real Estate Investment Loans
  Real estate investment loans are a great way to invest in property if you are aware of all the options. Read this article to find out what loans are available and what loan is right for you.
• Real Estate Investing
  Investing in real estate can be very easy. Read this article to find out how to invest in real estate, what types of loans are available and how much you can invest.
• Property Loan
  If you are considering a property loan read this article and find out about all the types of loan that are available for investors.
• Property Investment Strategies
  There are many property investment strategies that will help you get a great return on your investment. This article will outline the most popular strategies while guiding you to resources that can help you make better decisions with regards to your investments.
• Property Investment Services
  Property investment services are companies that can use their years of experience to advise you on your property investments. Read this article to find out how they can help you maximise they money you will make.
• Property Investment Company
  Property investment companies can help you make the most of your investment. Read this article to find out more about property investment companies.
• Property Investment Analysis
  Property investment analysis is a key requirement of managing large amounts of investment properties effectively. Read this article to find out all the forms of property investment analysis that are available and how to use them.
• Positive Cash Flow Investment Property
  Positively geared properties are a great way to make money while your investment is paying itself off. Read this article to find out more about positively geared properties and start earning a bit more today.
• Owning Investment Property
  When you own an investment property you can earn a lot of money and gain many tax benefits from the investment. This article will explain all you need to know about owning an investment property.
• Online Investment Brokers
  Online investment brokers can help you invest in many markets while giving you advice to help you get a bigger return. Read this article to find out more.
• No Deposit Investment Loan
  If you have found the perfect investment property but haven’t saved up the deposit read this article. The no deposit investment loans allow you to get that investment property without costing you a fortune.
• Investment Realty
  Investment realty is a great way to make money and increase the amount of assets you have. Read this article to find out about investment realty and what loans are available.
• Investment Property Tax Deductions
  Investment properties allow you to make many tax deductions. This article will explain what some of these deductions are and how they can save you money.
• Investment Property Mortgage Rates
  Getting the right investment property mortgage rate can save you money on your loan and increase the amount of money you make off your investment. Read this article to find out what rates are available and how to reduce your rates.
• Investment Property Mortgage Loan
  Investment property mortgage loans are a way for people to borrow money to buy an investment property. Read this article to find out how to get an investment property mortgage loan and how to find the one that best suits your needs.
• Investment Property Mortgage
  Investment property mortgages are a great way to purchase an investment property. Read this article to find out what investment property mortgages are and how to find the one that best suits your needs.
• Investment Property Loan Rates
  You can earn a greater return on your investment property home loan by choosing the right interest rate and reducing the rate by using some of the features offered with loan. Read this article and start saving today.
• Investment Property Interest Rates
  If you are considering borrowing money for an investment property read this article. This article will explain what discounts are available and how to find the best investment property interest rate.
• Investment Property Financing
  Investment property finance allows you to purchase an investment property so you are able to increase your income and improve your investment portfolio. Read this article to find out about investment property financing and what loans can help you buy your investment property.
• Investment Property Cash Flow
  Investment property cash flow is an important part of buying an investment property. Read this article to find out more.
• Investment Properties UK
  If you are considering purchasing an investment property then why not consider the UK. Invest in one of the strongest property markets in the world and receive all the benefits from doing so. Read this article to find out more.
• Investment Loan Tax
  When you buy an investment property you will have to pay a variety of taxes. Read this article to find out about the taxes you will have to pay and how much they will cost you.
• Investment Loan Interest Rates
  While the interest rate can affect the amount you pay on the loan it can also affect how you pay off your loan. Read this article to find out more about investment loan interest rates and how they can affect the loan structure.
• Investment Loan Interest
  The interest rate is one of the main features that will affect how much you will pay on the loan. Learn how to get the best out of your interest rate by reading this article.
• Investment Lending
  Investment loans can help you increase your portfolio very quickly by allowing you to invest in shares and managed funds. Read this article to find out more about investment loans.
• Investment Home Loans
  This article will explain all the types of investment home loans that are available. Read more to find out which one best suits you.
• Investment Home Loan
  There are many investment home loans available on the market. Read this article and find out how to make the most money out of your investment.
• Investment Calculators
  Investment calculators allow you to predict whether an investment will make you money. Read this article to find out more.
• Investment Brokers
  Investment brokers can help you get a great property to invest in. Read this article to find out what they are, what they do and how they can help you save.
• Investing Real Estate
  If you are investing in real estate it is important to know all the benefits and disadvantages. Read this article to find out what they are so you can make an informed choice.
• Home Investment Loan
  Increase your assets while receiving an income with home investment loans. Read this article to find out how.
• Equity Investment Property
  When you gain equity in an investment property you are essentially making money. Read this article to find out how to increase the amount of equity you earn.
• Australian Property Investment
  There are many benefits associated with investing in the Australian property market. Read this article to find out what these benefits are and buy a secure investment property today.
• Refinancing Investment Property
  It is very possible you will need to refinance an investment property loan to access equity for your next investment or to upgrade your current property, so find out how to choose an investment loan which will suit you now and into the future.
• Property Investing
  Property investing can supplement your income, or secure you capital growth for your retirement, but to ensure you achieve your property investing goals, you need to clarify what they are, by considering the benefits of each investment strategy.
• Loans for investment property
  Getting a loan for an investment property is not as difficult as you may think because you can often use equity you already have in your home, or invest with others to increase your wealth and net worth.
• Investment Property Loans
  There are many different types of investment property loans out there and with the help of Home Loan Finder you can turn that choice to your advantage and secure a loan perfectly tailored to your needs.
• Investment Property Loan
  Choosing an investment property loan takes time because you need to consider your investment goals and your financial situation before you can choose a loan, so find out more about the different ways you can invest in property.
• Investment Properties
  Property investment is a more secure option than investing in the share market for example, but in exchange for that security you may need to look further into the future for a strong return.
• First Investment Property
  When you are looking into your first investment property, you need to be aware of all the choices you need to make and all of the ongoing management which is required to make your investment profitable.
• Commercial Real Estate Investment
  Managing a commercial investment property can be rewarding if you know how, so find out more about how to ensure a strong return on your commercial real estate.
• Commercial property investment
  Commercial property investment options have changed as the way Australians live and work has changed so you may be able to enjoy the benefits of commercial investments, and leave behind the angst and personal involvement which usually comes with residential property investment.
• Commercial Investment
  Commercial property investment is generally not suited to first time investors, so find out whether you could ride out the risks to reap the rewards.
• Investment Loan Calculator
  If you are sick of getting different answers from every impersonal online investment loan calculator you ‘talk’ to, then start talking to someone who can help with investment calculations specific to your situation, and someone who can actually talk back.
• Planning Your First Property Investment?
  Home Loan Finder is here to help you clarifying your property investment goals and give you a step-by-step guide for every stage of the process, from assessing your borrowing capacity to leveraging one property into a multimillion dollar portfolio.
• Interest Management Loans
  If you thought your interest rate options were limited to fixed or variable then think again because you can customise your investment loan with an interest rate to fit you perfectly.
• 8 Top Tips For New Investors
  If you are new to the property investment world it is easy to feel daunted by all of the new information there is to take in. That is why you should start with our eight important tips for new investors and let us guide you from there.
• Property Investment Club
  A property investment club is a group of professionals who dedicate their time and knowledge to helping people overcome the initial fear of becoming involved in investing in property.
• Online Investment
  Those of us starting out to become a successful property investor for the first time can find the whole process rather daunting. But with help on hand online, at any time from proven experts it can be a very rewarding and exciting time of your life.
• Investment Loans Australia
  It may be the great Australian dream to own your own home, but that doesn’t mean you can’t invest in someone else’s as well – property investment can even help you on your way to your dream home.
• Investment Loan Comparison
  The comparisons are one of the most time consuming parts of the investment loan search, but here we show you where the process can be made simpler.
• Investment Interest Rates
  Many investors who have left the stock market because of world economic trends and are now seriously considering returning to bricks and mortar have a generally good investment future to look forward to.
• Investment Home
  If you are an investor wishing to put your money into residential investment you can therefore do so with relative safety as long as the above simple guidelines are adhered to.
• Investment Calculator
  It is suggested that all potential property investors contact us for an accurate calculation before you even contemplate searching for the property you want to invest your money in, as it is a very important step in helping to ensure your investment plans will be successful.
• Interest Only Investment
  Some home owners have taken out interest free home loans to lower their monthly repayments but the thought of not paying anything off the principal is hard for many to get their minds around.
• Equity Investment
  Equity investment remains the holding of shares on a stock market listing by individual investors or management funds. The value of the shares being subjected to what they are expected to return the investor in terms of income earned from dividends and capital gains as the stock value rises.
• Best Investment Property
  Searching for the best investment property is an art in itself and it is a most important part of ensuring the investment property you finally settle on is the one that will return you what you are looking for.
• Best Investment Properties
  It has been reported that a landlord once said that your profit is made the day you buy the property not necessarily when you come to selling it. This is probably true and it remains true for the more expensive property as much as it does the more cheaper investment, keep this little piece of advice in mind and you won’t go too far wrong.
• Best Investment Options
  The astute investor can obtain profitable opportunities for investment in city properties as well as the many country and coastal resort areas, particularly in the fast growing areas of North Queensland and Western Australia.
• Best Investment Loans
  Differing investors will require different features to suit his or her own particular needs such as long or short term investments but all can be accommodated with the different combination of features that are available to the property investor of today.
• Best Investment
  The property market has gone through considerable boom times in recent years, especially in 2003 when housing prices rose by a staggering 20%. It has levelled out somewhat now but in the longer term we can expect prices to rise again as we have a considerable housing shortage in the nation and while this persists there will always remain a demand for accommodation.
• Time To Buy Your First Investment Property?
  The Australian property market is ripe for ‘ma n pa’ investors to get in on some of the profits of secure property growth, however make sure that buying your first investment property fits your current financial needs with the help of Home Loan Finder.
• Rent Out Your House And Avoid Capital Gains Tax
  Typically selling a rental investment property will incur Capital Gains Costs care of the ATO. However, if you live in the property first you may be able to avoid these dents in your profit.
• Check Your Cash Flow Before Investing
  While investment properties are aimed at bringing in an income you cannot always rely on this income to keep your cash flow flowing smoothly so find out how you can do the sums to make sure you have enough cash available for your investment needs.
• Avoid the ‘Buy and Hope’ Investment Strategy
  Property investment is something you need to enter into with your eyes wide open so it doesn’t pay to buy a cheap property and hope for the best. Instead learn more about how research into the investment property market can mean greater returns.
• 6 Knockout Lending Criteria
  While you are not as emotionally invested in an investment loan it can still be crushing to be refused finance. That is why we have compiled six common traps and full of simple steps to help you complete a winning investment loan application.
• Loan Investments
  Property investing can often seem like an enigma, but once you understand how to couple the best investment loan with a property in the right area invested for the right term then you will be well on your way to being an investment mogul.
• Investment Loan Rates
  Investment loan rates can significantly affect the returns you make on your investment portfolio and you need to make sure you are choosing an investment loan with the best features and the best interest rates for your needs and for the current economic climate and you can have all your questions about investment loan rates answered here.
• Investment Loan
  If property investment is something you have always wished you could get into but never thought you could, find out just how secure investment property returns can be and the simple process to follow to apply for an investment loan.
• Foreign Investment Loans
  Australia has such a great property market that people from all around the world should start investing in. The foreign investment loans allow people from all over the world to buy an investment property in Australia. Read this article to find out more.
• How to Invest in Property
  Investing in property can be very risky if you don’t know what you are doing. Read this article to find out how to successfully invest in property by simply following all the helpful tips.
• Buying Investment Properties.
  This article will explain all you need to know about buying an investment property. Read more so you can maximise the return on your investment.
• Negative Gearing Explained
  Ways to make savings on your tax is something we are all looking for and investment properties appear to be an easy way to do that, so read on to find out whether negative gearing is something you can benefit from in your financial situation and whether the benefits will outweigh the losses.
• Refinance Investment Property
  Investing is meant to improve the life of the investor and this can be achieved through refinancing if done thoughtfully and wisely.
• Investment Property
  Using investment loans to Invest in property makes a lot of sense, as besides creating a regular income through rent you can most often obtain capital growth not to mention generous taxation benefits as outlined above.
• Invest in Property with extra finance
  Investing in property was once the realm of the wealthy but today with attractive investment loans available it has also become a popular way the ordinary person can become financially independent in his or her own right. You too can be one of these people.
• Navigating A Hot Market
  Buying a home or investment property is a big decision so if you would like advice or information about how to best navigate the market to achieve your individual goals find out how one Sydney first home buyer research his way to the top, and how you can too.
• How To Build Your Investment Portfolio, New Investor Mistakes
  We all try and learn from others' mistakes and when it comes to choosing and maintaining an investment property there is a lot to be learned, a lot of money, time and heartache to be saved if you keep these six investment mistakes clear in your mind to avoid them in your future.
• How To Build Your Investment Portfolio, It’s All About Timing
  Becoming a property investor does not have to be difficult so their Home Loan Finder help you find the best investment property for your needs and ensure you get the best return on that investment.
• How To Build Your Investment Portfolio, From First Home Buyer To Investor
  While property investing is usually a long-term project, there is no reason you can't go from being a first home buyer to an investor in a matter of months and with the help of Home Loan Finder we can make sure you get a deal on your interest rate which is lower than the banks and lower than mortgage brokers, to ensure you make the highest return on your investment.
• Mortgage Question From Home To Investment
  Your first home is not your dream home and if you are already making plans to upgrade to a bigger home in the future then find out more about how you can benefit from successfully turning your first home into an investment property, and are setting yourself up in a financially secure position so you can buy the second home of your dreams.
• Corporate Refinancing
  The health of your business finances affects the professionalism and the success of your business venture so you need to consider whether corporate refinancing can help you more easily manage your business finances and more affordably grow your business into the future.
• Investment Property Sales
  While making a strong return on your investment property takes careful management over the life of the investment, making the right investment property sale is a n important start.