Property investment

Your complete guide to how, where, and why to invest

We’ve helped thousands of Australians to build their wealth through property investment. With our expert support and advice, you could secure a bright financial future.

What is property investment?

 

Investing in property is a secure way to build your wealth. Long term or short term, you can benefit from growth of the property market with your investment paying off significant returns if done correctly.

There are different types of property investment and different types of investor. The route you choose depends entirely on your financial situation, your future goals and the kind of property you want to buy.

Traditional investor

If you’re a traditional investor, you probably already have your own home and are purchasing an additional property to rent to tenants. You might want to maximise your income, secure your future finances, or build a legacy for your kids. You may receive monthly profits from rent and you’ll benefit from the property increasing in value over time.

‘Rentvestor’

Rentvesting is where you invest in your first home in an up and coming suburb, with the intention to let it to tenants. You remain in your own rental accommodation in your chosen suburb (which is often more established and therefore more expensive). In time, your investment property will help fund a purchase of your own in your chosen suburb.

Home buyer

Investing in property doesn’t have to be focused on revenue. If you are purchasing a property to live in, it’s smart to seek advice to give your new home the best chance of growing in value. By buying the right kind of property in the right location, you can be confident that you’re capitalising on your purchase when the times comes to move on.

Why invest in property?

 

Whether you’re planning to future-proof your family’s finances or looking for some extra spending money, property investment offers significant financial benefits that you wouldn’t find with a traditional savings account.

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Secure your retirement

80% of Australians rely on the pension for retirement, but the average couple needs at least double the current monthly pension rate to live comfortably. Investing in property can help increase your retirement income.

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Making savings on your income tax

Investing in property can help you to make significant savings on your income tax. There are a range of deductions you can claim on your investment property that means your tax bill could come in at up to 20% less.

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Benefit from a growing asset

Australian property has risen an average of 6.8% each year for the past 25 years – and these are just averages. Purchase a property in the right location and your asset could grow in value year-on-year.

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Feel confident and secure

Property is one of the most secure ways to invest your money. While there are ups and downs in real estate values, medium and long term investors can benefit from the steady growth of property prices across Australia.

Looking for personalised property insights?
Download a free property suburb report to explore real estate prices and trends in your area of interest.

How to invest in property

 

When buying an investment property, it’s important to lay the groundwork to secure your financial future. This means taking a in-depth look at your finances, your goals for the future, and the options of how to get there.

Funding

When sourcing funding for your investment, you will likely need to take out an investment home loan. There are some key distinctions between owner-occupier home loans and investment home loans:

 

Interest rates: The interest rates for investment home loans are generally higher than owner-occupier loans. Expect at least a 0.5% higher interest rate, which can have a significant impact on the amount of money you’ll pay each repayment period and over the the lifetime of the loan.

 

Lending criteria: Many investment home loans have a lower loan-to-value ratio (the size of your loan versus the value of the property) than owner-occupier loans. Lenders see higher rates are higher risk, and very few lenders offer 90% or above loans to investors.

 

Interest-only loans: Investment home loans are often available as interest-only loans, where you pay interest charges without paying any of the equity. This will reduce your payments each month leaving you with more money in your pocket, but you’ll need to show how you intend to pay back the loan at the end of the loan term – usually by selling the property.

 

Remember – often a bank or broker will tell you how much you could borrow not how much you should borrow. This can often lead to would-be property investors maxing out their borrowing capacity and taking out a home loan that they can’t afford if circumstances change in the long term. When investing in property, conservative estimates and independent advice are safest.

Where to buy

When the time comes to begin searching for property to invest in, location can make a huge difference in the potential for your investment to grow. Many people chose to buy close to home or in a familiar location because it’s more comfortable. But, with full property market analysis, investors can make sure their investment is maximised and will give the best returns over the short, medium or long term.

 

By identifying suburbs that are projected to increase in value, also known as high growth suburbs, there are a number of factors to look for.

 

Top line factors include population increases, infrastructure investments and recent trends in property prices. There are also other influencing factors such as companies moving into the area, new schools, transport links, and amenities for the suburb. When selecting a property, factors such as the number of bedrooms, new versus existing properties, and its distance to local amenities are important to consider.

Property investment and income tax

 

If you invest in property, there are a number of income tax deductions you can claim for the costs related to your investment. This includes things like loans and interest, depreciation costs, management costs, council bills, insurance and other fees.

 

There are also different kinds of investment – positively and negatively geared properties – that makes a big difference when it comes to your tax returns.

 

Learn more about property investment and tax

Our clients are our best stories

“You absolutely have to have some kind of road map in place to understand what you goal is and how to achieve it”.

 

Reventon property investor – Rick

Explore more client stories

Interested in property investment? Take the next steps

 

At Reventon, we offer free consultations so you can discuss your financial goals and explore the routes to help you get there.

Property investment home loan

Comprehensive service

We offer property investment advice as well as financial planning and accounting services, to give you a full wealth building service.

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Personalised financial advice

You’ll receive a specially-made book tailored to your circumstances containing all the information, facts and stats you need.

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Expert support

Our staff have 125 years of collective experience in the industry, so you can benefit from our market knowledge and investment insights.

Request a meeting with a specialist today.

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