•  
• I'm ready to apply
• Mortgage.com.au - Contact us - 24 hours, 7 days a week. Call 1800 199 106

Property Investment

What do I need to know to buy an investment property?

There are many compelling reasons to invest in property. If you've done it before you're already aware of the many benefits, but if you're not experienced we'll briefly explain some of the top line advantages.

Negative gearing of your investment property

When the cost of owning an investment property exceeds the income it earns, you can negatively gear or claim the loss in the form of tax benefits. Your financial planner or accountant can give you advice on exactly how it can work best for you.

Negative gearing is popular with residential and commercial investors because you can deduct the non capital cost of owning property from your overall income. The biggest amount you can deduct is usually the interest, although other costs can also be claimed such as repairs and management fees. A tip - the benefits of negative gearing only start when the property is rented.

What about Capital Growth?

This is one of the main reasons to invest. Despite paying capital gains tax on the increased value of the property if you decide to sell an investment property, it can still be beneficial if it's part of your financial strategy and, the tax benefits are significant.

What about Rental Income returns?

Even though the rental market can change over time, generally property is a reliable investment. Whenever you're property is rented you're getting an income from it. Considering the broad dilemma of supply and demand in most capital cities, opportunities are about as good as we've seen in the last decade.

How do I calculate rental yields?

Weekly rent multiplied by 52 , then divide by purchase price and finally multiply by 100 gives you the rental yield. Major cities should usually provide an average yield between 4.5 to 5.5%. For example if you have an apartment worth $400,000 and you rent it out weekly for $390 the rental yield will be:

e.g. $390 x 52 = $20,280
$20,280 / $400,000 x 100 = 5.07%

How can I use the equity in my investment?

If you already own a home or another property you can use the equity in it to help finance an investment. But don't forget, if you borrow over 80% of the property value you'll need Lenders Mortgage Insurance.

• Glossary
• About us
• Contact us
• ING DIRECT
• Sitemap
• Privacy Policy
• Legal