Australians are big fans of investing in residential property.
Property investor
resources
Access hundreds of loans from our wide choice of lenders, including the big 4 banks. We shop around for you and your broker can negotiate a competitive rate.
We don’t charge to find the right home loan for you. Your broker is paid by the lender once your loan settles
The banks are competing hard for your business. Let us help you choose the right home loan with expert advice at no costs to you.
Hectic lifestyles don’t leave time for long daytime meetings at the bank. We offer appointments at the time and place that suits you, including after work.
From comparing home loan options to preparing the paperwork and supporting you through to settlement, your mortgage broker does all the running around.
Property
investment FAQs
Why Invest in Property?
Property remains one of the most powerful vehicles for long-term wealth creation in Australia. Here’s why:
1. Stability and Growth
Real estate is a tangible asset that historically appreciates over time, offering both capital growth and rental income. It is a cornerstone of wealth for many Australians.
2. Leverage
With the right finance structure, you can use other people’s money (the bank’s) to grow your own wealth. Property allows you to borrow against the asset and build equity as it increases in value.
3. Tax Advantages
Through strategies like negative gearing, depreciation, and claiming expenses, property investors can significantly reduce their taxable income, especially when guided by experts like JDL Finance Australia.
4. Passive Income
Rental returns can provide a steady income stream that grows over time, supporting your financial freedom and long-term goals.
5. Control and Flexibility
Unlike other investments, property offers you a level of control. You choose the location, the property type, the loan structure, and the strategy.
Yes, an investment loan can differ from your current home loan in several ways. While both involve borrowing to purchase property, investment loans are specifically designed for properties you don’t live inmeaning the structure, interest rates, and tax implications may be different.
Here are a few key differences:
1. Interest Rates
Investment loans often carry slightly higher interest rates than owner-occupier loans due to the perceived higher risk by lenders.
2. Loan Features
Investment loans may include interest-only repayment options, which can improve cash flow and enhance tax deductibility.
3. Tax Benefits
With an investment loan, you may be able to claim deductions on loan interest, property management fees, maintenance, and depreciation making it a strategic tool for wealth building.
4. Lending Criteria
Lenders may assess your borrowing capacity differently for an investment property, factoring in expected rental income and other liabilities.
Can I Use the Equity in My Home as a Deposit?
Yes, you can. Using the equity in your current home is one of the smartest ways to fund the deposit for your next property.
Equity is the difference between your property’s market value and the amount you still owe on your loan. If your home has increased in value or you’ve paid down a significant portion of your mortgage, you may be able to access that equity to investwithout needing to sell.
For example, if your property is worth $800,000 and your loan balance is $400,000, you could potentially unlock up to $240,000 (based on an 80% loan-to-value ratio) to use as a deposit on an investment property.
What Fees and Charges Should I Consider?
When taking out a new home or investment loan, it’s important to be aware of the potential fees and charges involved. These can vary depending on the lender and the structure of your loan.
Here are some common costs to consider:
1. Application or Establishment Fees
Charged by the lender to set up your new loan.
2. Property Valuation Fee
Covers the cost of having your property professionally valued by the lender.
3. Legal and Settlement Fees
Relate to preparing loan documents and registering the mortgage.
4. Discharge Fees
If you’re refinancing, your current lender may charge a fee to close out your existing loan.
5. Break Costs
Applies if you’re exiting a fixed rate loan before the term ends.
6. Lenders Mortgage Insurance (LMI)
If you’re borrowing more than 80% of the property’s value, LMI may apply. This protects the lender, not you, and can be a significant cost.
7. Ongoing Fees
Some loans have monthly or annual account-keeping fees.
Negative gearing is a powerful investment strategy that allows you to reduce your taxable income when your investment expenses exceed the income the property generates.
Here’s how it works:
If your rental income is less than the total cost of holding the property, including loan interest, maintenance, management fees, insurance, and depreciation, you make a loss on paper. That loss can then be used to offset your other taxable income, such as your salary, reducing the amount of tax you pay.
For example, if your investment property creates a $10,000 annual shortfall and you earn $160,000 from your job, you may only be taxed as if you earned $150,000.
Why it matters:
Negative gearing can make owning an investment property more affordable in the short term while allowing you to benefit from capital growth in the long term.
Positive gearing happens when the income from your investment property is higher than the costs of owning it. This means your property is generating a profit from day one.
Here’s how it works:
If your rental income exceeds all expenses including loan interest, council rates, insurance, maintenance, and property management you earn a surplus. This profit is added to your taxable income and taxed at your marginal rate, but it also gives you extra cash flow each month.
For example, if your property earns $30,000 in rent annually and your total expenses come to $25,000, the $5,000 difference is your positive cash flow.
Why it matters:
Positive gearing can help you improve your cash flow, build financial stability, and reinvest more confidently. It’s especially attractive for investors who prefer income-generating assets and don’t want to rely solely on capital growth.
Home Loan Education
To determine your readiness for homeownership or investing in property, reach out to a JDL Finance broker today
