Investment finance

Investment property loans

Owning an investment property is a popular way for many Australians to build their wealth and a financially secure future. You should see a rental property as a long-term investment and seek professional advice about choosing the right property, the costs involved and how to set a fair and reasonable rent.

An investment property loan is much the same as an ordinary residential mortgage. However, investment loans are at a fixed rate for a period of between one and five years – and are generally interest only. Having a fixed rate means your mortgage repayments will remain constant, making it easier to plan your finances.

There are many things to consider with an investment loan and it is important to find the right investment property loan in order to minimise costs and maximise the tax benefits.

Your CapitalQ broker knows all the ins and outs of sourcing the best possible investment property loan to meet your current financial needs.

Equity Loans And Line Of Credit Facilities

An equity loan or line of credit facility involves paying a regular sum, usually from your salary, into your loan account, thereby building up excess funds or equity that can be used like the money on a credit card. Money withdrawn from the loan account can be used to pay general expenses or to invest in other assets.

Some equity loan providers will allow you to access up to 90% of the value of your home and set up two separate lines of credit, however, it should be noted that lender’s mortgage insurance will almost certainly apply to equity loans. This is a useful and fairly common facility but requires expert advice to overcome the complexities and potential pitfalls.

Contact CapitalQ today to find out how we can help you.

Understanding gearing

The term gearing is used to describe the borrowing of funds to be used for investment in property or shares. There are two forms of gearing:

Negative gearing
Applies when the costs of servicing your investment are higher than the income you receive. For example, if the repayments on your investment property loan, plus council rates and maintenance costs add up to more than the return on rental, your investment property will be negatively geared. There are tax benefits to being negatively geared. Taking the long-term view, the value of the property could increase more quickly than the costs which could result in a significant capital gain. However, negative gearing has its risks and expert advice should be sought before you commit to it.

Positive gearing
Occurs when the cost of servicing your investment is lower than the rent it generates. This usually happens when rents are high and interest rates are low.

How a CapitalQ broker can help

The team at CapitalQ is well versed in finding the best investment property loan for individual clients. can also assist with taxation and financial planning strategies. Call to make an appointment.

What are the benefits of owning an investment property?

Regular income
Rent from an investment property is usually paid fortnightly and represents a regular income stream that can even be used to repay the loan.

Tax benefits
Owners of rental properties are entitled to tax deductions on a variety of expenses.

Security
Property is a reasonably secure long-term investment and, unlike shares, is a solid and visible asset.

Low risk
Investing in property is considered less risky than some other investments such as shares or managed funds.

Diversity
The housing stock in Australia consists of units, villas, townhouses, apartments, single and multi-storey houses in a variety of rural, suburban and city locations. This means there is a vast choice of properties and process.

Profitable
Property prices rise over the long term so you can sell your investment property in the future to help fund retirement.

Portfolio potential
Building equity in your investment loan allows you to purchase other properties and build up a profitable portfolio.

Let CapitalQ help you

Through our strong relationships and long-standing connections with these mortgage providers, we can often secure better rates and deals than if you were to approach them directly.

CapitalQ can bring the banks to you. We deal with all major banks and building societies plus others with which you may not be familiar.

While we specialise in home loans our experienced mortgage brokers can obtain loans for virtually any purpose including equipment financing and investment loans.

We can also advise on debt consolidation strategies designed to reduce interest and save you money.

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What our customers say

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Providing the Financial Sounding Board to Grow a National Business

CapitalQ provides important services for our business by assisting us in relation to a wide range of financial and business growth matters on a consistent and ongoing basis. Specific support has included: implementing easy to read monthly financial management reports; identifying significant tax saving strategies (including an annual saving of nearly $30,000 a year on Payroll Tax); recommending and implementing business changing cloud-based software platforms; and streamlining our internal accounting and bookkeeping processes. This support has meant that CapitalQ has effectively become our financial sounding board so we can make informed strategic decisions about our business. This in turn has allowed us as Directors to focus on expanding our business to a national presence (currently three States and growing).

Nigel Dennis & David Lunn

Co-Founders and Directors of BidWrite (Australia’s Leading Specialist Tendering Consultancy)

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