Residential Investment Property Loans

Whether this is your first investment property purchase, or if you have an established portfolio of properties, Skate Capital can help make sure you have the right loan for your new or existing investment. We specialise in getting the best loan for you - ask about current refinance cashback offers.

When considering the right loan for your investment property, interest rate is just one consideration. Skate Capital can help you navigate the hundreds of options available from over 60 lenders to find the right loan to achieve your investment goals.

Considerations:

• Budget: Understand your financial capacity and set a realistic budget. Consider not only the property price but also additional costs like stamp duty, legal fees, and ongoing expenses.
• Deposit: As an investment, there is no option for Lenders Mortgage Insurance which means you need at least 20% of the property value available as a deposit. Utilising availability equity in your existing property is one way to meet this requirement.
• Loan Terms: Consider the interest rate along with any additional fees to maintain the loan. Understand the repayment schedule and any early/additional payment penalties. 

When purchasing property in Australia, you have several ownership structures to consider. Purchasing an investment in the wrong structure can be a costly mistake. It is important to seek the advice of a licensed advisor and/or accountant to ensure the property and loans are structured correctly for your situation.

Some common ownership structures are listed below:

• Sole Ownership:
  • Description: The simplest form of property ownership where you hold the property individually.
  • Pros: Full control, straightforward setup.
  • Cons: Limited asset protection.

• Joint Ownership:
  • Description: Owning property with others, either as joint tenants (automatic transfer upon death) or tenants in common (shares go to the estate).
  • Pros: Shared responsibility, potential tax benefits.
  • Cons: Complexities related to ownership and limited asset protection.

• Discretionary Family Trust:
  • Description: A trust where a trustee holds assets for beneficiaries, distributing them at their discretion.
  • Pros: Tax flexibility, asset protection.
  • Cons: Administrative requirements.

• Unit Trust:
  • Description: A trust where unit holders (investors) own units representing a share in the trust’s assets.
  • Pros: Allows multiple investors, tax benefits.
  • Cons: Legal and administrative complexity.

• Company Ownership:
  • Description: Holding property within a company structure.
  • Pros: Asset protection, tax planning.
  • Cons: Compliance requirements, costs.

• Self-Managed Super Fund (SMSF):
  • Description: Using your SMSF to invest in property.
  • Pros: Tax advantages, control over investments.
  • Cons: Strict regulations, audit requirements.

There are several key considerations when choosing the right investment property. It is also important to remember this is an investment. Try to make investment decisions with your head not your heart, be guided by your research and the numbers - remember you are not going to be living there!

Location and Market Analysis:

• High-Growth Suburbs: Research areas with strong growth potential. Look for suburbs with rising property values, high rental yields, and low vacancy rates. In Western Australia REIWA publishes data and insights on their website.
• Local Amenities: Consider proximity to schools, transport, shopping centres, and employment

Property Type and Features:

• Property Type: Decide between freehold or strata properties. Each has different risks and returns.
• Condition: Assess the property’s condition, maintenance requirements, and potential for value appreciation.
• Tenant Appeal: Choose features that attract tenants, such as good layout, parking, and outdoor space.

Risk Assessment:

• Market Volatility: Property markets can fluctuate. Diversify your investment portfolio to manage risk. 
• Property-Specific Risks: Evaluate risks related to location, tenant turnover, and property management.