Creating Wealth Through Property

Investing In a Property

Creating Wealth Through Property

Property is considered an excellent method of creating wealth, when used as a long-term investment strategy. Historically, house prices provide a steady return to investors in the form of capital growth as property prices rise. Rental yields are also currently increasing as vacancy rates drop to record or near-record lows across the country. With a range of investment gearing options and loans available, smart property investment can be an ideal wealth creation vehicle.

There are a number of methods for using the equity in existing properties to help finance your investment property purchase.

First-time investors often use the equity in their principal place of residence (PPR) as additional security for their investment purchase. This increases the amount you can borrow and decreases the size of the deposit you require.

Line of credit home loans are often used by investors to secure purchase of multiple properties, or you may use a standard variable or fixed home loan.

You may also take out an equity loan against the balance and use this as part of your deposit, or even a second mortgage on the property. These methods are often employed by more experienced investors.

It is essential to discuss your investment options with your Fast Repay Home Loan Finance Coach, your accountant and financial planner to ensure you achieve the best possible tax and financial outcome.

Investing In a Property

Rental returns are not the only opportunity to maximise property investments. There are a few golden rules to getting the most out of the borrowing side of your property investments.

There are a range of investment loans and loan features available - ranging from simple Home Loans to more complex loans that allow you to manage tax, gearing and repayments.

Investment loan decisions are often influenced by whether the borrower has any owner-occupied debt. Owner-occupied debt is usually paid off first to maximise the effectiveness of gearing, while the tax effective debt (investment debt) usually has the minimum repayments possible, often interest only repayments.

Talking to your accountant or financial planner is particularly important when you are planning on making decisions about funding for investment purposes versus owner occupied or personal use.