Please enable javascript on your browser.

Calculators

1300 511 655

Unlocking Unlimited Potential with Property Investment Loans

Find the perfect loan for your needs. Our expert mortgage brokers compare hundreds of options from various lenders, tailor-made to suit you.

Home Loan for Investment Property

At ARG Finance, our mortgage brokers compare hundreds of loans from a wide variety of lenders and work with you to find the right loan for an investment property that suits your individual needs.

Congratulations on finally taking this step! Building wealth on brick and mortar is what everyone hopes to do one day. Whether it’s investing in residential or commercial property, a wise and patient decision can help you generate consistent, tax-friendly rent returns with long-term growth in value....
Read More

Getting Started

What pulls people towards investing in a property are the many benefits, such as regular rental income, tax benefits and increased value in the long term. However, it must not be ignored that getting a home loan for an investment property is considered riskier by lenders (or banks). The sources of this increased risk include defaulting as a landlord, tenants destroying your property, not having tenants at all and overextending yourself. This means convincing lenders becomes harder.
...
Read More

Questions to ask before you begin

? COMMERCIAL VS. RESIDENTIAL

	COMMERCIAL PROPERTY	RESIDENTIAL PROPERTY
What is it?	Covers a wide range of options from office, retail spaces, car parks, to industrial properties like warehouses and factories	Covers apartments, standalone houses, bungalows and duplexes
Affordability	More affordable and sometimes even cost less than residential property	Require more maintenance and cost higher than commercial properties
Long term leases	These usually run for longer periods (several years)	These usually run for shorter periods (6 to 12 months)
Vacancy period	Can be long	Tend to be shorter
Impact of Goods and Services Tax (GST)	Applicable; but you can claim it back as an investor	Not applicable
Maintenance costs	Paid by the lessee	Paid by the landlord
Risk and rental returns	Higher risk and higher rental return	Lesser risk and lesser rental return
Deposit required	Larger deposit required, >30% of the purchase price	Lower deposit required, nearly 20% of the purchase price

? APARTMENT VS. HOUSE

APARTMENT	HOUSE
More affordable, provide higher returns	Land component of the property increases the potential for capital growth
Easier to maintain	Comparatively difficult to maintain, but have greater scope of adding value through renovation
Strata fee required for maintenance	No strata fee required for maintenance
Depreciation deductions are greater as depreciation on commonly owned facilities can also be claimed	They offer scarcity factor which means fewer periods of vacancy

? NEW VS. EXISTING PROPERTY

NEW PROPERTY	EXISTING PROPERTY
Artist’s impression can paint an overly flattering picture leaving you disappointed	You know exactly what you are buying (outlook, size, finish, neighbourhood)
It is likely to be fresh, clean, modern and defect-free	They might have signs of wear and tear and possible defects and pest infestation
Offers greater depreciation benefits and requires less maintenance over time	Offers lesser depreciation benefits and requires more maintenance over time
You might over or underestimate the rent amount which you can command	They have a known rental history, a value you know you can demand
You can also charge a premium rent for providing a new property	Provide better opportunities of adding value through renovation, subdivision, etc
Appliances would be covered by warranties and insurance	Appliances may be out of warranty period and may require repairs

Common Features to look for in a property

Quiet street and safe neighborhood
Good lighting on street
Home security system if desirable
Storage/ Cupboards for bigger families
Off street or undercover parking as per the type of property
Low maintenance garden for growing families
A pleasing outlook
Accessible location
 Well connected to public transport
 Close to lifestyle and public amenities
Area of high rental demands and returns

Private Treaty vs. Auction

PRIVATE TREATY	AUCTION
Seller and buyer enter into a private negotiation, generally supervised by a real estate agent	Whoever bids highest, wins the property. It is better to appoint someone experienced to bid on your behalf
Upon initial agreement, a deposit of about 10% of the agreed sale price is paid by the buyer	If you win the bid, you have to submit the closing deposit then and there
As a buyer, you can call off the purchase anytime during the cooling off period	There is no cooling off period and hence, you cannot back out of the purchase
The whole purchasing process takes weeks to iron out negotiations	Buying at auction is quick and sale can be closed within a few minutes
You can apply for a loan later to finding a property	You must have a pre-approved loan before bidding into the auction

BETTER SUITED LOAN TYPES

Fixed rate loans

The interest charged annually can be calculated upfront based on investment property loan rates and pre-paid each year, allowing you to claim this amount as a tax deduction.
This can even out your tax bill for the past years where income from other sources was higher than normal.

Interest only loans

You will have to pay only the interest on the loan, with no repayment of the principal.
The principal will be paid at the time of selling the property.
Additionally, all your repayments are tax deductible.
For serial property investors, this is a very lucrative option. However, it must be kept in mind that most lenders offer this option only for a limited period (~5 years).

Interest Only

This investment property loan in Melbourne will allow you to withdraw cash from your loan up to a certain limit as and when you need.
With an interest only loan, your loan balance gets reduced by the cash coming in and increased by cash going out.
This loan is suited for an experienced investor, as there are no set repayments and a certain level of cash management discipline is required.
You can use an investment loan repayment calculator to determine how much your repayments will be for the type and amount of loan that you acquire.

Loan calculators

Managing your property

A rental property needs regular maintenance unlike other investments like shares or term deposits. Looking after the property yourself or appointing a professional property manager is solely your choice.

DIY vs. Property Manager

Involves hassles of legal responsibilities as a landlord...
Read More

ASSOCIATED COSTS AND OPTION OF EQUITY

Establishment fees
Solicitor fees
Stamp duty

WHAT IS EQUITY?

Equity in real estate refers to the difference between the current market value of your property and the outstanding balance on your mortgage. It represents the portion of the property that you truly own, free and clear of any debt. As you make regular mortgage payments and own a home for an extended period, your equity gradually builds up. This increase in equity is driven by factors such as appreciation in the property’s market value and the reduction of the mortgage principal through repayments. Having substantial equity can provide financial advantages, acting as a form of savings and a safety net. It can also serve as a valuable resource for real estate investments, allowing you to access funds for purchasing additional properties.

However, accessing equity can only be done if you pay certain fees and costs, one of them being Lender’s Mortgage Insurance (LMI) if you want to access over 80% of your property’s value. Choosing another lender or loan type will have its own associated costs too.

HOW TO ACCESS EQUITY?

Calculate the available equity – This can be estimated by a real estate agent or a credit advisor who can organise a valuation by a lender.
Calculate the ‘accessible’ equity – Not all of your equity is accessible. Your servicing capability of repaying any additional payments play a crucial role here. An experienced mortgage broker will be equipped to advise you on this matter and help you work through your finances.

IF YOU DECIDE TO SELL

If you decide to sell your investment property, you will need to pay Capital Gains Tax (CGT). This is a tax paid on the difference between the selling and purchase price of the property, which can include:

amount paid for the property
legal fees
stamp duty
other upfront costs
cost of renovations done by you.

The Tax Office calculates CGT from the date you entered the contract as the date of purchase, not the settlement date. You must maintain a strict calendar regarding every detail. Also, properties purchased after October 1999 which have been owned for a period of 12 months might be eligible for a discount of up to 50% on CGT depending on the ownership structure of the property.

For such reasons, CGT calculations tend to get complicated. A credit advisor should be consulted to avoid any undesirable situation

TAX DEDUCTIONS YOU CAN CLAIM

You can claim two types of depreciations – depreciation on fittings and fixtures, and depreciation on the building itself. Buildings constructed between 1985 and 1987 depreciate by 4% annually, while those constructed after 1987 depreciate at 2.5% annually.

Depreciation is one area where it pays to get professional assistance. With a quality surveyor, you can be assured that the property will be properly inspected. A surveyor will also draft a complete depreciation schedule, ensuring that nothing is missed and nothing is overstated in your claim, which could cost you tax penalties.

NEGATIVE GEARING

POSITIVE GEARING

Call or Enquire Online Today

Whether you want a renter occupied or owner-occupied investment property, the team at ARG Finance can help you find and secure the right loan. Give us a call or enquire online today. You can also use our investment loan calculator to get a better idea of how much you can borrow.

Warning: Before making any decision that could have potential financial implications, seek professional guidance from a qualified tax advisor or accountant to ensure you have accurate and comprehensive information.

Unlocking Unlimited Potential with Property Investment Loans

Home Loan for Investment Property

At ARG Finance, our mortgage brokers compare hundreds of loans from a wide variety of lenders and work with you to find the right loan for an investment property that suits your individual needs.

At ARG Finance, our mortgage brokers compare hundreds of loans from a wide variety of lenders and work with you to find the right loan for an investment property that suits your individual needs.

Getting Started

Questions to ask before you begin

? COMMERCIAL VS. RESIDENTIAL

? APARTMENT VS. HOUSE

? NEW VS. EXISTING PROPERTY

Common Features to look for in a property

Private Treaty vs. Auction

BETTER SUITED LOAN TYPES

Loan calculators

Managing your property

DO IT YOURSELF

PROPERTY MANAGER

ASSOCIATED COSTS AND OPTION OF EQUITY

WHAT IS EQUITY?

HOW TO ACCESS EQUITY?

IF YOU DECIDE TO SELL

TAX DEDUCTIONS YOU CAN CLAIM

NEGATIVE GEARING

POSITIVE GEARING

Call or Enquire Online Today

Our Panel of Lenders

Commercial Loans

About Us

Languages We Speak

Home Loans

Loan Calculators

Additional Information

Trusted Partners

Contact