Property investment can help you build wealth over the long-term, and your home loan and investment strategy play an important part in achieving your goals.
When it comes to choosing an investment home loan, it’s important to find the right solution for your needs. And that depends on your circumstances, goals, and size of your investment property portfolio.
You might be renting and taking the first steps to buying an investment property. Perhaps you own your home and want to use your equity to springboard into other investments. Or you may be an experienced investor looking for a more efficient way to build and manage your property portfolio.
Whatever stage you’re at, consider if you’ve got the right home loan for the long run.
So let’s run through the various types of property investors.
Rentvesting – renting your home and investing in another property – can help you enter the property market while still living in the area you want. You have the option to use the income from your investment property to pay down your investment home loan, or invest it elsewhere, depending on your circumstances and investment objectives.
The idea of taking on a commitment like a home loan can be daunting. Before you take the leap as a first-time property investor, think about your goals.
For Rentvestors, the decision to invest in property was driven by a desire for future stability. A typical rentvestor might say: “If your tenant can help you pay off your investment loan, then in 30 years or so you’ll own that property outright.”
If you’re a rentvestor, a Basic Home Loan could meet your need to keep costs low, with competitive rates and no annual fee. At this stage, a small difference in rate now can make a big difference to how much interest you pay overall.
You can use our inbuilt budgeting tools to keep track of investment property expenses and feel in control of your finances. This also makes it easier to send all the data to your accountant at tax-time.
Rider Financial Group’s flexible investment property loans give you the ability to explore different strategies and tailor your loan to suit your changing needs.
Rentvesting may not be the right strategy for your circumstances, so make sure to seek advice from professionals, including your financial adviser or accountant, if you’re considering rentvesting as an option.
As the value of your property increases over time, you build equity, which can then be used to grow your wealth by helping fund another purchase. Using the equity you’ve built up in your home towards the deposit for an investment property allows you to start accumulating wealth for the future, while still keeping cash savings on hand.
At this stage of property investment, flexibility and convenience become increasingly important. The right home loan structure can save time and help you manage your finances more effectively, especially if it gives you the option to have multiple loans under a single loan contract.
A flexible loan structure is particularly important for investors who also have an owner-occupied property. With a property investment loan you can apply for an owner-occupied loan for your family home and a second, investment property loan under a single loan contract and lending limit whilst having the flexibility to establish separate loan accounts for your owner-occupied and investment home loan. Having multiple loan accounts under the same lending limit can make it easier to manage your money and saves you from paying multiple fees.
Choose a Loan that offers flexibility in structure which could suit you during the wealth accumulation phase. A flexible loan structure is particularly important for investors who also have an owner-occupied property.
As an established investor, you may be managing multiple properties as a significant part of your overall portfolio. The right loan and banking tools can provide you with convenience, insights and control, so you can spend less time managing your money and focus instead on building and strengthening your portfolio.
Managing cashflow is one challenge many portfolio investors face, especially across multiple loans.
For example you may choose a Macquarie Bank offset home loan, it’s just a single loan contract with one set of fees but the flexibility to set up different loan accounts. Then you can have multiple offset accounts linked to the individual loan accounts as well.
When you have multiple property investments, having visibility over your net wealth and financial position is essential. Macquarie Bank’s banking app includes a suite of digital tools that make it easier to manage cashflow, see your net financial position at a glance, and tag investment-related expenses.
Macquarie Bank have engineered their digital banking to support investors so you can generate separate interest statements for each loan account. The system also automatically categorises expenses for the user, and you can upload receipts, add notes and tag tax-related transactions, which makes it really easy at tax-time for your accountant over at Rider Accountants & Advisors :-).
Rider Finance & Mortgage Brokers has an amazing panel of lenders including Macquarie Bank who specialise in providing loans for property investors and our brokers can guide you on the journey and then our accounting team can make sure you are reaping the maximum tax benefits come tax time.
Sydney’s specialist investment property loan and home loan broking firm with offices in Earlwood and Marrickville as well as a new location coming soon in Summer Hill Sydney.
Mobile: 0405 27 1969 Land Line:(02) 8957 8454