By Aus Investment Properties
Investing in property can be an excellent way to build wealth, especially in Australia’s robust real estate market. Whether you’re looking to invest personally or through your self-managed super fund (SMSF), proper preparation is key to a successful investment. Here are seven essential steps to help you prepare for financing your investment property:
1. Clean Up Your Finances
Before applying for an investment property loan, it’s crucial to get your financial house in order. Start by reducing any bad debt, particularly high-interest debt like credit card balances. Pay down personal loans and consider consolidating debts if possible. Lenders will scrutinise your financial position, so the cleaner it is, the better your chances of approval.
2. Check Your Credit Score
Your credit score plays a significant role in loan approval and interest rates. Obtain a free copy of your credit report and check for any errors or issues. If your score needs improvement, take steps to boost it by paying bills on time, reducing credit card limits, and addressing any negative marks.
Click here to learn more about your credit score, how to read it and how to get a copy of yours for FREE https://tinyurl.com/zc7vxmxj
3. Deposit
Most lenders require a 20% deposit for investment properties. Determine where this will come from savings, SMSF balance, equity in an existing property, or a combination. If using equity, ensure you have sufficient equity built up in your existing property. You are best aiming for a minimum 20% deposit to avoid paying lenders mortgage insurance. You will also need cash reserve to cover costs including legal fees and stamp duty.
4. Understand Your Borrowing Capacity
Determining your true borrowing capacity is crucial, but it’s not a simple calculation. Lending criteria are constantly evolving, and each lender assesses borrowers differently. For an accurate and up-to-date assessment, it’s best to consult with one of our experienced mortgage brokers. They can review your specific financial circumstances and provide a realistic borrowing capacity figure.
Armed with this precise information, you’ll be able to confidently narrow down your search for the ideal investment property. You’ll have a clear understanding of your budget, which will guide your decisions on property type and location. This targeted approach saves time and helps you focus on properties that align with both your financial capacity and investment goals.
Remember, knowing your true borrowing capacity is the foundation for making informed investment decisions. It ensures you don’t overextend financially and helps you identify properties that offer the best potential return within your means.
5. Define Your Investment Goals
Clarify what you want to achieve with this investment. Are you aiming for capital growth, rental yield, or a mix of both? Your goals will influence the type of property you choose and its location. For instance, co-living or NDIS properties might offer higher rental yields, while houses in growing suburbs might provide better long-term capital growth. Every property on our portal shows 12-month/10-year capital growth and the gross rental yield to make it easy to identify opportunities.
Click here to learn more about capital growth vs. rental yield: https://ausinvestmentproperties.com.au/blogs/cash-positive-vs-capital-growth-and-can-you-have-both
6. Research Property Types and Locations
Based on your goals, budget and appetite research different property types and locations. Consider factors like local market trends, rental demand, infrastructure developments, and potential for capital growth. Look at historical price data and projected growth rates for areas you’re interested in.
7. Get Your Documentation in Order
Prepare all necessary documentation to streamline the application process. This typically includes:
By following these steps, you’ll be well-prepared to apply for finance and make informed decisions about your investment property purchase. Remember, every investor’s situation is unique, so it’s always wise to consult with financial advisors, mortgage brokers, and real estate professionals to tailor your approach to your specific circumstances.
Investing in property can be a rewarding journey. With careful preparation and a clear strategy, you’ll be well on your way to building your property portfolio and securing your financial future.
No matter where you are at with your investment journey surrounding yourself with experts where you can leverage their expertise is the key to your success. If you would like to chat with us please call us on 1300763558 or visit www.ausinvestmentproperties.com.au
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Owning an investment property can be incredibly rewarding, but finding good tenants is crucial to making the experience profitable and stress-free. Reliable tenants ensure consistent rent payments and take good care of the property, ultimately helping you achieve the best return on investment. Here’s an in-depth guide to attracting high-quality tenants to your rental property in Australia.
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The Australian property market in FY25 is set to demonstrate varied growth across capital cities and regional areas. With stabilising inflation, steady wage growth, and a resilient labour market, many regions present significant opportunities for high-yield property investment. Here’s a closer look at the latest data and insights from Aus Investment Properties on where the market is heading this financial year.
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Victoria is undergoing a significant shift in its stamp duty policies, offering valuable opportunities for property investors. The Victorian Government has recently announced a reduction in stamp duty on units and apartments, providing potential savings of up to $28,000 for homebuyers. This initiative aims to stimulate the real estate market, particularly in Melbourne, and encourage investment in apartments and units. However, the offer is limited, creating a window of opportunity for savvy investors who act quickly.
By Aus Investment Properties
In September 2024, Australia's rental vacancy rates slightly dropped to 1.2%, reflecting a tight rental market with increased demand across various regions. According to the latest data from SQM Research, the total number of rental vacancies decreased to 37,932, down from 39,665 in August. This shift was largely driven by areas such as Perth, Canberra, Hobart, and regional Australia.
By Aus Investment Properties
A groundbreaking report by urban policy experts at RMIT University has proposed a new way to improve rental property conditions across Australia. By using Australia’s tax system, the report suggests offering negative gearing and capital gains tax incentives to property investors who make positive improvements to rental homes. This move could benefit both property investors and tenants, creating a more balanced and efficient rental market.
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As Australia moves into the final quarter of 2024, the property market remains dynamic, with notable shifts in listings, asking prices, and buyer activity. According to the latest data from SQM Research, new property listings rose by 5.4% in September 2024, while total listings dropped slightly by 2.3%. Here's a closer look at the key takeaways from the September property market update and what it means for investors.
By Aus Investment Properties
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SQM Research is an investment research house that specialises in providing accurate research and data to financial institutions, investment professionals and investors.
Aus investment Properties has partnered with SQM Research to provide data across our site to assist investors in making an informed decision.
Capital Growth 12 months, measures the increase in a property’s value over the previous 12 months, indicating how much the investment has appreciated in that timeframe.
Capital Growth 10-year annualised, reflects the average annual increase in a property’s value over the last decade, smoothing out short-term fluctuations to show long-term appreciation trends.
Vacancy Rate, indicates the percentage of properties that are currently unoccupied in that postcode, It’s a key indicator for investors to assess the rental demand.
SMSF Property Investing, when investing inside your SMSF there are some restrictions on how you can purchase investment properties. We use the following information to help navigate the SMSF investment property options.
This property is a single-contract property suitable for an SMSF.
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