A great option for young buyers who are looking to enter the property market but find that they are priced out of buying in the area that they ultimately want to live in, is to consider purchasing an investment property first.
It is becoming quite common for buyers to invest in property to rent out and then use the knowledge, tax breaks, rental yield and equity (the dollar difference between the outstanding loan balance and the property’s current market value) gained from that venture to buy their own home.
If you are currently living at home with your parents, have a steady income, minimal expenses, and are regularly adding to your savings, this may be an option for you.
When approving finance, lenders will look favourably on a borrower who has genuine savings accumulated over a steady period of time, a good credit rating, solid employment history, and any considerable assets such as a room full of new furniture, a car that is paid off in full, etc.
Once you know how much you can borrow then next step will be to focus on finding the right investment property. You want to make a good investment so before hitting the pavement on the property hunt it’s important to think carefully about what type of dwelling you’re looking for. Put your investor hat on and focus on what your potential tenants may want as opposed to your own personal preferences for a property.
Investigating rental yield, tenancy demand and capital growth potential in your intended purchase area is also a very important step when considering investing in property; you want to make sure that investing in your selected suburb will be worthwhile for you in the long run.
Once you have done your research, it is always a good idea to visit an accountant and/or financial planner to get a better understanding of the opportunities and risks involved with taking this investment path.
By having a solid savings plan, taking the necessary steps, doing your research to find a sound investment property to purchase, and having a little patience, you could be residing in your suburb of choice sooner than expected.
Australia’s largest independently-operated mortgage broker, Mortgage Choice has a national network of hundreds of franchises supported by Group and State Offices.
Its loan consultants write almost one in every 20 home loans in Australia by providing professional guidance on, and choice of, products offered by an extensive panel of leading lenders. Many provide a broader service, helping customers source commercial and personal loans, asset finance, deposit bonds and risk and general insurances.
Mortgage Choice head office pays franchisees the same commission rate for the home loans they write, regardless of the rate paid by the lender selected by a new customer, so they work in each customer’s interests to source a product tailored to their unique needs.
So, why not let our local team find the most solution for your individual needs. Contact Irene Cujko at Mortgage Choice in Kings Langley on 02 9674 8014. Or visit www.mortgagechoice.com.au/irene.cujko for more information.