Investment Loans
Building a property portfolio made easy.
Whether you’re planning to buy your first investment house, want to make your current home an investment, or already have an investment home loans property under your belt, you’ll almost certainly require an investment loan.
Because most banks view investment loans as a higher risk, these loans may have higher interest rates and fees, so contact us first. We can compare up to 50 different lenders to ensure you get the best potential return on your investment. We can compare all banks so you can choose one with low recurring fees and/or closing costs.
If you borrow to invest, you will have to repay the loan, so always do the math. Consider the worst-case situation and do not rely on rental revenue to meet the mortgage – there may be times when your tenant cannot pay the rent, has vacated early, or the property is left unoccupied. At Force Financial Solutions we can give you a portfolio of lenders to choose from if you decide to take the next step.
Ready to take the next step?
At Force Financial Solutions we will assist you with searching for the best products, whether it be a mortgage, personal loan or debt consolidation.
Investment strategies
Owning an investment property comes with costs such as maintenance, repairs, and property management fees, and there’s also the risk of tenants defaulting on rent payments or causing damage to the property. It’s important to ensure that the rental income generated by the investment property is sufficient to cover these costs and provide a positive cash flow.
Rentvesting can be a useful strategy for those who are looking to enter the property market but may not be able to afford to buy a property in their preferred location. It can also be a way to generate passive income through rental income and potential capital gains on the investment property.
Using your home to buy another home can be a worrying step. If you currently own a property, you can use the equity to supplement your deposit. Remember that equity is not free money. When you use your equity, your loan balance rises, as do your repayments.
Positive and negative gearing
What is the distinction between the two, and which is appropriate for your investment property?
Positive Gearing
Positive gearing is a term used to describe a situation where the rental income from an investment property exceeds the costs of owning and managing the property, including interest payments on the mortgage, maintenance, repairs, and other expenses. In other words, it’s when the income generated by the property is greater than the costs associated with owning it.
When a property is positively geared, the investor receives a regular income stream from the rental income, and may also benefit from potential capital gains if the value of the property increases over time.
It’s important to seek professional advice from a qualified accountant or financial adviser to understand the tax implications of positive gearing and to ensure that your investment strategy is aligned with your financial goals.
Negative Gearing
Negative gearing is a term used to describe a situation where the rental income from an investment property is less than the costs of owning and managing the property, including interest payments on the mortgage, maintenance, repairs, and other expenses. In other words, it’s when the expenses associated with owning the property exceed the rental income it generates.
When a property is negatively geared, the investor may need to contribute additional funds to cover the costs of owning and managing the property, which can be offset against other income for tax purposes. This means that the investor can claim a tax deduction for the loss incurred from the property, which can reduce their overall taxable income and potentially provide a tax benefit.
As the titles suggest, both scenarios have advantages and disadvantages, so it’s critical to receive expert guidance on which one is best for you.
Lenders Accessed
How much can you borrow?
Want to crunch some numbers before you go any further? Use our online calculators to find out what you can afford or save in regards to your finances.
