Investment Property Loans Sunshine Coast

Negative gearing is a common strategy used by Australian property investors to offset their rental income against their expenses to reduce their taxable income. These may include mortgage interest, property management fees, and repairs. Talk to a qualified accountant for negative gearing-related questions.

The amount of deposit you require to buy an investment property on the Sunshine Coast or in Australia depends on various factors, including the lender you choose, the type of loan you opt for, and the property’s purchase price. Generally, most lenders require a minimum deposit of 5-10% of the property’s value.

Costs associated with buying an investment property include stamp duty, conveyancing and legal fees, building and pest inspection fees, loan establishment fees, and ongoing expenses such as property management fees, insurance, and repairs. Speak to your accountant to see how you may be able to offset some of these costs with Negative Gearing.

The requirements for investment loan approval can become complex, particularly when factoring in negative gearing advantages or other considerations to demonstrate your ability to repay the loan. Since investment loans are viewed as riskier by banks compared to regular home loans, meeting stringent financial standards is necessary to be eligible.

As an idea, the basic lending criteria includes:

Investment property loans are offered by a range of lenders including traditional banks and some other lenders we don’t commonly know about. What’s important to know is that each lender has their own legibility criteria when it comes to offering a loan. Therefore, it’s difficult to provide a suggestion without knowing your specific situation. The best way to secure an investment property loan is to talk to an independent broker so they can learn about your needs and goals and find you the right loan.

Here are a few ways you might be able to increase your borrowing capacity to buy your investment property:

• Opt for a lender that offers lenient borrowing requirements for investors.
• Apply for loans jointly with your spouse to leverage your combined household income.
• Invest in properties that generate positive cash flow.
• Decrease your credit card limits.
• Pay down any loans where possible.

Banks and other lenders utilise varying standards to evaluate your investment loan eligibility. Your borrowing capacity might fluctuate significantly, depending on the lender you select.

Here are some areas where lending criteria can diverge:

• Rental income – some lenders consider up to 100% of your rental income, whereas most banks only consider 80%.
• Other income – lenders differ in how they handle additional income sources, such as overtime pay, bonuses, commission, allowances, dividends, trust distributions, and self-employed income.
• Assessment rate – while most banks add up to 2% of the current rate when calculating your borrowing capacity, certain lenders may waive this charge if you fix your rate for more than three years.
• Negative gearing – not all lenders account for negative gearing benefits.