As a pharmacy assistant, you've likely considered various ways to build wealth and secure your financial future. Buying an investment property represents one of the most popular strategies for Australians looking to invest in real estate and create additional income streams.
Understanding Investment Loan Options
When you're ready to purchase an investment house, you'll need to access investment loan options from banks and lenders across Australia. These specialised loans differ significantly from standard home loans and are designed specifically for buying a rental property.
Investment property loans typically come with:
- Higher interest rates compared to owner-occupier loans
- Different loan to value ratio (LVR) requirements
- Specific documentation requirements
- Various loan features tailored for property investors
Types of Investment Properties to Consider
Before applying for an investment loan, it's important to research property options that align with your investment goals:
- Apartments: Often require lower initial capital and may offer solid rental yields in urban areas
- Town houses: Provide a balance between affordability and potential capital growth
- Stand alone dwellings: Typically offer stronger capital growth potential but require higher loan amounts
Each property type affects your borrowing capacity and rental yield calculations differently.
Key Financial Considerations
Interest Rate Options
You'll need to choose between variable interest rate and fixed interest rate options. Variable rates fluctuate with market conditions, while fixed rates provide certainty for a set period. Many lenders offer interest rate discounts for investment loans, particularly for borrowers with strong financial profiles.
Loan to Value Ratio and Lenders Mortgage Insurance
Most lenders require a maximum LVR of 80% for investment properties to avoid lenders mortgage insurance (LMI). If you borrow above this threshold, LMI costs can significantly impact your overall investment strategy.
Ready to get started?
Book a chat with a Finance & Mortgage Broker at Pharmacist Home Loans today.
Additional Costs to Factor In
When calculating investment loan repayments, consider these additional expenses:
- Stamp duty (varies by state)
- Legal and conveyancing fees
- Building and pest inspections
- Ongoing property management costs
- Insurance premiums
The Investment Loan Application Process
The application process for investment loans involves several key steps:
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Assess Your Financial Position: Review your income, expenses, and existing debts to determine your borrowing capacity
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Gather Required Documentation: Prepare bank statements, payslips, tax returns, and details of your intended investment property
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Submit Your Investment Loan Application: Work with a mortgage broker who understands the investment property market and can present your application effectively
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Property Valuation: The lender will conduct a valuation to confirm the property's value aligns with the loan amount
Developing Your Property Investment Strategy
Successful property investment requires careful planning. Consider these elements:
Negative Gearing Benefits
Negative gearing occurs when your rental income is less than your loan repayments and property expenses. This loss can potentially be offset against your other income for tax purposes.
Building Your Investment Property Portfolio
Many investors start with their first investment property and gradually build a portfolio. Each additional property requires careful analysis of your financial capacity and market conditions.
Working with Mortgage Professionals
A streamlined application process becomes possible when you work with experienced mortgage brokers who understand investment lending. They can help you:
- Compare investment loan options across multiple lenders
- Structure your loans for optimal tax benefits
- Access potentially better interest rates through broker relationships
- Navigate complex documentation requirements
Making Your Investment Property Decision
Once you've secured pre-approval for your rental property loan, focus on finding the right property. Consider location, rental demand, property condition, and potential for capital growth.
Remember that property investment is a long-term strategy. Your investment loan interest rate, rental yield, and property market conditions will all influence your returns over time.
As a pharmacy assistant, you have stable employment that lenders view favourably. This positions you well for investment property finance, provided you demonstrate strong financial management and realistic investment goals.
Call one of our team or book an appointment at a time that works for you to discuss your investment loan options and take the first step towards building your property portfolio.
