Loan Market

7 Answering the questions we hear the most. Is buying an investment property right for me? It depends. Ask yourself, can I afford it? What do I want to get out of an investment property? What are my long and short term goals? Property investment is a popular way to generate wealth but the decision needs to have some thinking behind it. It is also important to chat with your financial planner or accountant to make sure this is the right step for you. What is the right investment strategy for me? Often, words like ‘negative-gearing’ and ‘cash flow strategy’ are thrown around. Now that you’ve made the decision to invest, the next question should be "what strategy"? Your choice should depend on several factors, the most common being the length of time you plan on having the investment property, how much capital you're willing to initially put down on the property and what are your other financial goals? What can I claim on tax? It’s important to understand what you can and can’t claim from your investment property. You can claim: real estate management fees, council and water rates, advertising for tenants, insurance, interest on your investment loan, reasonable travel expenses to inspect your property, depreciation on assets like whitegoods and air conditioners. Just remember to keep the all important receipts! Can I use equity to buy an investment property? Absolutely! You can use your existing home to buy your investment without needing to dive into your savings. This equity can be used for various different reasons, such as a deposit, bonds, renovations or to take out a line of credit. How do I choose the right kind of investment loan? The ideal loan should maximise your goals for cash-flow and capital growth. One of the first considerations for your loan is will it have a fixed or variable interest rate? Different lenders also play a part as they all offer different loan options. Talking to a broker about finding the right loan with the right features could save you both time and money. Do I need to get pre-approval for my investment loan? Once you’ve selected a loan product, a formal pre-approval is the next critical step in purchasing an investment property. Pre-approval is when a lender approves a maximum amount to lend you based on a full assessment of your financial situation and the type of investment you’re making. What is tax depreciation? Your property will depreciate in value as it gets older, as a result owners are able to claim a tax deduction. These claims can be made on the building structure and items permanently fixed to the property and on the plant and equipment assets contained within it, for example white goods. Q&A session