Is it a good time to buy an investment property?

By Monica van Riet - Mortgage Choice South Melbourne


Rates are at unbelievable all time lows, is now a good time to buy an investment property?


You need to make sure you do the ‘numbers’ on your proposed investment purchase using a rate that is higher than today’s rates. Rates will go up in time, and you need to make sure this investment still makes financial sense if rates are at 6% or even 7%.


You ideally want to buy a property in which the rental return will cover the cost of the loan repayments, (and hopefully the ongoing holding costs such as rates and property management etc), but will also have a reasonable potential for capital growth long term.


You also need to consider longer term factors such as repairs and maintenance and major renovation work that may be required on the property. Your investment needs to be in a location in which tenants want to live. For example:

* Close to schools

* Transport

* Shops.

Think with your head. Not your heart. It's a numbers game.


Don’t forget there is a high cost of entry into an investment property. Stamp duty and other government fees eat up a lot of your deposit. You’ll need another 5% on top of your deposit, just to cover the purchase costs.


Negative gearing is a factor, but shouldn’t be the deciding factor. You still need to be able to pay for your home loan, and other living costs, if rates rise, and you don’t want to be put under undue financial stress.


Fixed rate loans only give you breathing space and extra cash flow while the rate is low, but could possibly go up considerably higher after the fixed rate ends. So make sure you do your due diligence before signing any contracts, and remember, the best deals are made at purchase.


Buy for the right price, with low overheads, in a good location.


Most importantly, you must do a lot of research and make a fully informed decision, and don’t be swayed by so called ‘experts’ who receive a commission on selling you a property.


Our team of experts have many years experience with property investing, in Australia and Globally. We can also connect you with other industry professionals to assist you in the process, such as Property Investment Specialists, Buyers Agents, Accountants and Financial Planners. 

For more information or to discuss property investment in more detail, please call Monica van Riet at Mortgage Choice South Melbourne on 03 9681 8182 or 0401 677 314. You can also email at

Posted in: Property investment

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