The great thing about property investing is that it can be tailored to your individual needs and lifestyle. You decide the type of property – from apartments, houses, established homes to off-the-plan projects and how involved you want to be, whether that’s hands-on renovations or a fully managed investment.
How is an investment loan different to a normal home loan?
An investment loan is for a property you won’t live in yourself, whereas a standard home loan is for an owner-occupier – your primary residence.
The key differences? Investment loans often have slightly higher interest rates, but interest and certain property costs may be tax-deductible.
What costs do I need to be aware of?
When purchasing an investment property, a number of costs need to be considered.
- Building inspection costs.
- Ongoing property fees, such as strata fees, property management fees, rates and repairs
- Stamp duty
- Capital gains tax (should you choose to sell your property)
- Lenders’ fees and charges
- Fit out of the new home, including landscaping
Property development
There’s a growing number of property investors who are taking more advanced steps into small property development, as a way of growing their wealth and portfolio.
Property development could offer bigger financial rewards than traditional property investment, but as we all know, there’s no gain without an element of risk. So, you really need to consider the potential on both sides before you get too far down the property development path.
The first step to determining your financial needs is deciding whether your project qualifies as residential or commercial. Your loan needs are commonly determined by the amount of properties or units you wish to develop.
For example, if you want to subdivide and build an investment property (or two) on your current block, the process will be much easier than purchasing a ‘development site’ and choosing to build a large number of units or apartments.
What’s involved in property development finance?
Personal loan
Construction loan
Investment loan
How we Resolve it
As a Resolve Finance Mortgage Broker, we are a great place to start when it comes to expert guidance and the kind of financial arrangements that will help you maximise your property opportunity. It’s a more complicated area of finance than buying or building a home, so do make time to chat with them.
It’s worth remembering, Resolve Finance is part of the ABN Group – one of Australia’s most trusted building companies. We understand the financial needs of investment and development projects, and have leading partners in the building industry to make your journey to property development easier whoever you build with.
