The Ultimate Guide to Purchasing Investment Property in Brisbane
Are you looking to invest in the property market in Brisbane? Buying an investment property can be a great way to build wealth and secure your financial future. However, the process of getting investment property loans can also be a complex and confusing process.
That’s why we’ve created the Ultimate Guide to Buying Your Investment Property in Brisbane. This comprehensive guide covers everything you need to know: from finding the right property and securing financing (i.e., a property investor loan) to managing and maintaining your investment.
Whether you’re a first-time investor or a seasoned pro, our guide will give you the information and resources you need to make informed decisions and achieve your investment goals.
What is Investment Property?
An investment property refers to a property that is purchased with the intention of earning income through renting it out, as opposed to using it as a primary residence.
Investment properties can include single-family homes, apartments, and commercial buildings, among others. These properties may be purchased with the goal of generating rental income, as well as capital appreciation over time.
In Australia, investment properties are subject to certain tax regulations. Investors should be aware of these before making a purchase.
What to look for in an investment property
Location
When choosing an investment property, consider the location carefully. Look for a property that is close to amenities, such as public transport, shops and schools; in an area with consistently high demand from tenants and buyers; and with potential for growth.
Property Type
Consider the kind of property you want to buy: house, townhouse, apartment or land? Each has its own advantages and disadvantages, so research what’s best for your budget and investment goals.
Suitability
Ensure the property is suitable for the purpose you intend it for (e.g., rental). Consider factors such as size of rooms, number of bedrooms/bathrooms, layout of living areas, amount of outdoor space and level of maintenance needed.
Property Condition
Inspect the condition of the building structure and materials used (e.g., walls, roofing) to determine any potential hidden costs in terms of repairs or renovations required before placing on the market or renting out.
Tax Implications
Investigate all applicable taxes related to buying an investment property including capital gains tax, stamp duty and income tax. Each state has different regulations when it comes to taxation laws for investors
Property Management
Consider the cost and effort of managing the property, and whether you will manage it yourself or hire a property manager.
Future Development
Look for areas that are going to have new developments and infrastructure, as this will increase the desirability of the location and increase the value of the property.
Purchase Price
Compare the purchase price of the property to similar properties in the area, and consider whether the price is reasonable and in line with your investment goals.
Return on Investment
Consider the potential return on investment in terms of rental income and capital growth, and compare this to other investment options.
Market Trends
Be aware of current market trends, such as interest rates, rental demand, and property values, as these can affect the performance of your investment property over time.
How to buy investment property
Research the Australian property market and familiarize yourself with the different types of properties available, as well as the areas with the strongest rental demand. Determine your budget, investment goals, and how much you are willing to spend on a property.
Before you start looking for a property, it is a good idea to get pre-approved for a mortgage. This will give you an idea of how much you can afford to spend and will also make you a more attractive buyer when it comes to making an offer
Look for properties that fit your investment criteria and budget. You can work with a real estate agent or search for properties online.
Once you have found a property that you are interested in, conduct due diligence on the property and the surrounding area. This includes inspecting the property, checking the title and zoning, and reviewing any building and pest report
Once you have completed your due diligence and are satisfied with the property, make an offer to the seller. Negotiate the price and terms of the sale, and ensure that the contract of sale is in writing.
Once the seller has accepted your offer and you have agreed on the terms of the sale, exchange contracts with the seller. This is a legally binding agreement, and you will be required to pay a deposit at this stage.
Arrange your financing for the purchase of the property. This can include taking out investment property loans, refinancing existing property, or using cash. You can enlist the help of brokers Brisbane to get great investment property advice Brisbane.
Attend the settlement, where the property is transferred to your name and you pay the remaining balance of the purchase price.
Benefits Of Taking Out Investment Property Loans
Of course you want to grow your wealth and create a steady income stream; these are likely your biggest reasons for buying an investment property in Australia.
In our experience, the fastest way to realise your real estate goal is by getting a property investor loan with the help of an investment mortgage broker. One of the most significant benefits of taking out loans for property investment rather than using other means to buy an investment property is that it allows you to leverage your resources. With a loan, you can purchase a higher-value home or invest in multiple properties with less money upfront and consequently potentially higher returns on investment.
Another advantage is the range of financing options and features available with property investment loans. For instance, many lenders offer fixed interest rates so your repayments will stay consistent over the life of the loan. This helps with budgeting and managing your finances more effectively. Additionally, some lenders also offer flexible repayment plans, allowing you to make additional payments whenever you have extra money available or defer payments if necessary.
The tax benefits associated with taking out an investment property loan are also worth noting. Depending on your individual circumstances, some lenders allow you to claim certain deductions such as interest paid on your loan or even fees associated with setting up the loan. This reduces your taxable income and gives you more financial freedom once tax returns come in annually.
Finally, having an experienced investment mortgage broker guiding you through the process ensures that all steps are taken professionally and legally. With this you protect both yourself and the lender from any potential pitfalls along the way.
Having this level of support from knowledgeable professionals can make navigating what can be a complex process much simpler and easier. This, we believe, is something invaluable for investors who may otherwise struggle when trying to go it alone.
Where to buy investment property in Brisbane?
To help you get started, we’ve put together the following guide for property investors. While any significant financial investment always comes with an element of risk, we’ve included some of the best suburbs in Brisbane to invest in.
This list we created is based on current market trends and industry expert predictions. We pulled the data from a recent study by Matusik Property Insights that evaluated the current population growth forecast for South East Queensland.
Top Brisbane Growth Suburbs
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Jiboomba
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Ripley
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Greenbank
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South Brisbane
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Newstead-Bowen Hills
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North Lakes-Mango Hill
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Rosewood, Bellbird Park-Brookwater and Springfield Lakes
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Fortitude Valley
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Murrumba Downs-Griffin and Cashmere
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Redbank Plains
Best Suburbs in Brisbane for Families
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Coorparoo
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Kelvin Grove
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Victoria Point
Best Suburbs to Invest In
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Entry Level
– Stafford Heights
– Keperra
– Chermside West -
Mid-range
– Holland Park
– Cannon Hill
– Tarragindi -
High-end
– New Farm
– Ascot
– Highgate Hill
Do You Need A Mortgage Broker For Investment Property?
It is true that you can skip talking to an investment mortgage broker when buying your property. There is always the option of going directly to a bank or any lending institution to set your real estate plan in motion.
However, there are advantages to speaking to a Brisbane mortgage broker that would otherwise be unavailable to you, and can really make all the difference.
With an investment property broker, you get:
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Access to multiple lenders so you can shop around for loans for investment property with great mortgage rates and terms
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Great investment property advice Brisbane investors like you need to help you improve your credit score as well as navigate the complex process of buying a property
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To save time and effort as they will help sort and process the required liaisons and paperwork for you
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Access to special programs and incentives that are not available to the general public
Team up with the investment property mortgage brokers at North Brisbane Home Loans
So there you have it! A crash course on investment properties in Australia. Remember, if you’re looking to invest in an income-producing property Down Under, don’t forget to ask help from a mortgage broker for investors — and that’s us!
The team at NBHL can help you find the perfect investment property for your portfolio. We understand the ins and outs of the Australian tax system and can help you maximise your return on investment.
Contact an NBHL property investment mortgage broker today to learn more.
Frequently Asked Questions on Investment Property Loans
How much super do I need to buy an investment property?
The amount of super you need to buy an investment property in Australia depends on the type of loan you are applying for, your individual financial situation, and the price of the property. Generally speaking, lenders usually require at least 20% of the total purchase price as a deposit. This means if you have an investment property worth $500,000 you would need at least $100,000 in super to cover this cost.
How to use equity to buy investment property?
Equity can be used to buy an investment property in Australia by using the equity in an existing property as collateral for a new loan. You can either talk directly with your chosen lender to get them to consider the equity in your existing property as part of the pre-approval process. Alternatively, you can talk to an investment property broker and ask for their assistance in this matter.
How much can I borrow for an investment property?
The amount you can borrow for an investment property in Australia will depend on a number of factors, including your income, credit score, and the amount of equity you have in your existing property (if using equity as collateral).
Lenders typically use a loan-to-value ratio (LVR) to determine how much they will lend. The LVR is the ratio of the loan amount to the value of the property. Most lenders will typically lend up to 80% of the property value for an investment property. However, some of them may be willing to lend up to 90% or even 95% of the property value, but you’ll likely have to pay higher interest rates, or buy Lenders Mortgage Insurance (LMI) to cover the lender’s risk.
How much deposit do I need for an investment property?
So how much deposit for an investment property do you need? Rule of thumb is you need to present an upfront deposit amounting to 20% of the property purchase price. Most lenders require lenders mortgage insurance if your deposit is less than 20%, which can add additional costs to your loan.