Looking to buy an investment property in Melbourne?
We make it easy to finance your investment property
Australians have always had a love affair with property. Buying an investment property has long been considered a sound and reliable choice. Investing in property gives you the option to grow your income and wealth over time through rental returns and equity. Not all investment property loans are created equal though – so it makes sense to get expert advice before you begin.
Whether you are looking to buy in Melbourne or any other part of our country, when you do decide to make the move into property investment, you want to know you’ve got the right people in your corner. Especially, if you’re also looking to continue to expand your portfolio without running into serviceability issues. The Loan Gallery team is here to help. Have a look at our construction finance services if you are looking for other types of loans.
Understanding your goals is our goal
There are lots of reasons people make the decision to enter into property investment. You might be looking to minimise tax, rent and invest for the future, build a rental income stream for retirement, grow your asset base or use equity to expand your portfolio.
Whatever your unique goals are, our experienced investment loan brokers are there to listen and personalise a solution that is unique to you. We’ve got years of experience in ensuring your loans are structured in the right way for now and into the future.
Ensuring every customer gets the best loan for their circumstances is at the heart of everything we do at Loan Gallery.
Why choose us for your investment property loan in Melbourne?
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Let's get you ready to purchase your next investment property. Speak to a Loan Gallery broker to get started.
Why consider investing in property?
Property has long been considered as a popular choice of investment for many Australians, and there’s lots of good reasons for this.
When you rent out your property you can enjoy generous tax concessions. This is often one of the reasons why residential property is so highly favoured by Australian investors.
If you’ve owned your home for a few years, you may have equity in it that will help you purchase an investment property sooner. If you’ve built up some reasonable equity, this could be used as a deposit for an investment property.
Capital growth is the increase in value of your property portfolio over time. As a property investor you will tend to rely on the capital growth of your investment properties just as much, if not more so, than the rental income returns.
If your investment is making a loss then you can use this to offset tax you may have to pay. A property is negatively geared when the costs of owning it exceeds the income it produces. This is often something those on higher incomes use as a tax minimisation tool.
Some properties, particularly those where you can generate dual incomes, will often be positively geared. This occurs when the investment income exceeds your other expenses. While this can be beneficial for cash flow purposes you may be subject to additional tax on any income derived from a positively geared investment.
Understanding the costs of investing in property
Buying an investment property in Melbourne, or any part of Australia for that matter, can prove to be a wise wealth growing experience. But there are a number of costs that you need to take into consideration. Some of these costs will be one-off expenses when you first borrow. Others will be ongoing costs. We take a look at the main ones you should be aware of.
This is a state government tax that is based on the price you paid for the property. We can let you know what the stamp duty amount would be for the property you purchase. It’s a cost you need to pay when you settle the property, but is added to the capital value of the property should you choose to sell.
If you’re seeking a loan for 80% or more of the purchase price, you’ll need to pay Lenders Mortgage Insurance. This amount is based on the property’s value and the overall Loan to Value Ratio. There is also a loan application fee and a lender’s valuation fee that you may be charged from the bank. Some of the time these costs can be absorbed into the loan.
When a property is bought and sold, the ownership must be transferred from the vendor to the buyer. Whether you use a conveyancer or a lawyer they will charge conveyancing fees to review the contract and to assist you with the property transfer.
Avoid unexpected surprises with a pest and building inspection. They allow you to identify any issues before they become expensive to fix.
If you’re investing in a unit or townhouse, then a strata search should also be done. You want to get a good idea of any disputes or potential repairs.
There are quite a variety of expenses that you may have when owning an investment property. Most of the time these are able to be claimed on tax which helps to make owning property more manageable.
Some of the main costs would include body corporate fees, council and water rates, insurance, real estate and leasing fees, land tax, accounting fees, loan interest and maintenance and repair costs.
Calculate your borrowing power to purchase your next investment property
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This depends on your unique finance and borrowing situation. You can get an estimate (subject to satisfying legal and lender requirements) with our clever loan options tool. Speak with one of our mortgage brokers in Melbourne for personalised calculations.
There are a number of fees and costs involved when buying a property. Here’s a snapshot of standard costs to budget for: stamp duty, legal/conveyancing fees, building and pest inspection, lender fees, moving costs and mortgage insurance costs.
Generally speaking, between 5% to 10% of the property’s total value, which is paid upon signing the Contract of Sale. Contact us to discuss your options.
Our Repayment Calculator provides you with an estimate. As there are many different loan products on the market, it’s best to speak with us about the best available deals.
Most lenders offer flexible repayment options. Choosing to make weekly or fortnightly payments can help you pay off your loan sooner.