Just like looking for a new home to live in, there are many things to consider when looking for a property to invest in. The following steps will help to guide you through the process.
Getting your investment strategy right from day one gives you the best chance at investment success. It’s important to know what assets and liabilities you have, like an existing property or any outstanding debt. This will give you a much better understanding of your financial situation, and consequently will allow you to determine what the best investment opportunities are for you.
Additionally, make sure you start by asking yourself why you want to invest in the first place. What do you hope to get out of it? Setting goals based on what you want to achieve will make sure you stay on track as your investments grow and change in the future.
Setting out your goals can determine which investment strategy you take here. If your aim is to achieve long term gains from your investment, then focusing on capital growth, or the increase in your property’s value over time, might be the way to go. However, if you’re looking for your investment to take the form of regular income, you may want to think about renting out your property. Regular contributions from your tenants may mean you won’t have to borrow as much resulting in lower repayments.
Research is key here. No matter what your investment strategy is, the best way to make your investment a success is to buy at the right place and the right time. And most importantly, at the right price. You need to understand not only the location of the property you’re looking at, but the relevant market too. Is the suburb on the rise? Is the demand for rental properties in that area high or low? Is the population set to increase? Are there any developments planned that may impact your investment or the desirability of your area? These are all very important things to consider, as each one will have an impact on the success of your investment.
It’s just as important to find the right investment loan as it is to find the right home loan for you. Just like your residential loan, you can choose from fixed, variable or split rate loans. You can also benefit from flexible features like redraw and offset accounts. Most investors prefer interest only and line of credit loans, but you can speak to your local lending expert to discuss the investment loan options that best suit you.
If you’re investing in a rental property, you should also think about the kind of tenants you’d like. Are you looking for a family, a student, a young couple? You should feel 100% comfortable having them in your home. More often than not, the type of tenant your property attracts is dictated by the size and location of your property, so it’s worth having your ideal tenants in the back of your mind whilst searching for your property too. The best way to manage your rental property is by finding a real estate agent that knows your area well. They’ll be able to help you with ongoing management of the property and of the tenants too. It just depends how involved you want to be in the whole process.
When you commit to investing, you want to have enough flexibility to grow your wealth and take advantage of any opportunities that come your way. The following strategies may be useful:
When you invest in a rental property, you’re entitled to deduct a range of expenses from your investment income, subsequently reducing the amount of tax you have to pay. You may be eligible to deduct the following expenses:
Additionally, you may wish to consider negative gearing, which refers to when the costs of owning a property are greater than the income you make from it. Negative gearing produces a book loss, in the same way a struggling business may record a loss for the year, allowing you to offset this loss against your other income and reducing the tax you pay.
The Australian Tax Office website will give you some more helpful information on negative gearing, as well as what expenses you may be entitled to claim.
Keeping your property well looked after and making sure your tenants are happy is an important part of managing your investment. You can do this yourself, or employ a real estate agent to manage the property on your behalf. Doing it yourself can be cheaper, but may also be stressful, complex and time consuming. Here are some of the things a property manager can help you with:
Something to consider when buying our investment property is how you’re going to protect it. Landlord Insurance will help protect you against incidents such as loss or damage by a tenant or their visitors. You can also add optional covers such as loss of rent, rent default, and theft or attempted theft by a tenant including legal costs. View our insurance products.
Applying for a home loan with The Rock is easy, and we’ll keep you up to date with what’s happening every step of the way. Check out our step-by-step guide to the application process below.
Download our home loan checklist to help you get your documents ready, then drop into your nearest branch or call 1300 083 793 to begin the application process. We’ll process your loan application on the spot, subject to an employment check, valuation & lender’s mortgage insurance. You’ll have a decision on your home loan within 60 minutes, guaranteed.
We’ll check your documents, including your employment history, to verify that they’re all correct.
We’ll order a valuation to verify the value of your preferred property. The valuer will get in touch with the real estate agent directly and arrange the valuation; then report back to us.
If it’s required, we’ll apply for Lender’s Mortgage Insurance. If you have a sizeable deposit, you may not need it. We’ll let you know either way.
At this stage, once your details have all been verified, the valuation is satisfactory and mortgage insurance (if required) approved, we’ll unconditionally approve your loan, which is a 100% guarantee that we’ll be financing your home loan.
At this stage, your loan will be opened, and the arrangements to book settlement will be made with your conveyancer and settlement will take place at an agreed time.
Think you’re ready to apply? Make an appointment with your local lending expert today, give us a call on 1300 083 793 or drop into your nearest branch.
With a variable rate home loan, your interest rate fluctuates as the market does. The Reserve Bank of Australia’s monthly Official Cash Rate announcements, along with local and global economic decisions all influence the banks’ decision to shift or hold rates.
With a fixed rate home loan, you can lock in your interest rate for a specified term, usually 1, 2 or 3 years. This can give you certainty when it comes to repayments, as you know they won’t change, even if the interest rate does.
The Rock's Line of Credit facility is an effective way to access the equity in your in your home whenever you need to. It also provides great flexibility by offering access via ATMs, EFTPOS, Internet Banking, Phone Banking and cheques together with direct entry facilities.
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We don’t give compliments often but in this instance Adam has gone above and beyond to secure us our home loan and see us through to completion of settlement, he is a valuable asset to the Rock.
I was very pleased with the service, honesty and especially the positivity of The Rock. Thanks to Paul Wilson I am now on my way to owning the home I have been renting for nine years.
At The Rock, we strive to do the kind of things we believe other banks should be doing. Like offering local, friendly service backed by competitive products and giving back to the communities we’re part of.
Having been around for more than 50 years, we’re experts in transaction facilities, savings accounts and lending products and offer a range of comprehensive insurance products through a partnership with CGU, a leading Australian insurance provider.
We’re all about exceeding our customers’ expectations and we’ve built a strong reputation offering a wide range of financial services right across Australia.
The Rock - A division of MyState Bank Limited (MyState) ABN 89 067 729 195 AFSL 240896 Australian Credit Licence Number 240896. A wholly owned subsidiary of MyState Limited ABN 26 133 623 962.