February 06, 2015
Thinking of buying an investment property?
Low interest rates are really making the numbers add up.
Contact Mortgage Choice at Ashgrove and we can prepare a personalised report (sample to download) of how an investment property could work for you.
While it is hard to predict whether interest rates will go even lower, it is certainly the case that today’s interest rates are at historically low levels and this presents an excellent opportunity for borrowers.
With the surprise interest rate cut in February, the RBA is playing a difficult balancing act between managing the inflation rate, the Australian Dollar and the weakness in the broader economy without over heating the property market.
The team at Mortgage Choice Ashgrove have a lot of experience in the lending market and the maths around purchasing investment properties is the most favourable that it has been for the last seven years.
As well as detailed lending advice we also provide our clients with great information on property investment. As well as working with our in house Financial Planner, we also have access to powerful modelling tools that show our clients the full potential cost and cash flow position after taking into consideration net rental income and tax concessions for negative gearing and depreciation.
Our modelling had been consistently showing that the holding costs for an investment property is around $40 to $80 per week for most clients, less for clients on substantial income and who are buying new properties with substantial depreciation allowances.
With the latest rate reduction this is creating a situation where the holding costs are very low and in some cases property is negatively geared pre-tax and positively geared post-tax – meaning that the property is actually putting some money in your pocket each week while the tax man and tenant pay for a property that should grow in value over time.
An example of the Information Product we can customise for your personal situation can be found here. This is backed by a detailed report backing up the numbers.
From a risk management perspective it is currently possible to lock in a five year fixed rate at 4.69%. This gives a level of certainly regarding how an investment property will perform in terms of yield over a five year period.
The property market has grown over the past 12 months, led largely by the Sydney market. The Queensland market, particularly Brisbane is predicted to see solid growth in the next 12 months to two years.
If you have equity in your existing property or even a modest deposit, you may be very surprised how cost effective it is at present to purchase an investment property.
Contact Stuart Pullar on 07 3463 0501 today for more information.