Reverse_Reventon_Horizontal_Logo-01-1.png

Property Investment Loans

According to the Australian Bureau of Statistics, investment home loans make up approximately one-third of the value of all home loan commitments in Australia, that’s definitely big business and shows the confidence is real estate investing in Australia.

The experienced team at Reventon Finance help investors on a daily basis to secure a good investment property loan based on their individual circumstances and we can help you too.

Play Video

Investment Home Loans Explained

At Reventon Finance, our mortgage brokers are industry-leading specialists in investment home loans. Our team have helped over 3000 Australians build wealth safely through property investment, setting many families up on the path to financial freedom.

If you already own a property, an investment property may be more accessible to you than you realise due to “capital growth” and “equity” in your existing home. Alternatively, you may be considering “rentvesting”, all these terms might sound like jargon to you now but we’ll explain them below.

An investment home loan, or property investment loan, is a home loan for people who are looking to purchase a property with the intention of renting it out and profiting through a rise in the property’s value, also known as capital growth. Home loans for an investment property differ from home loans used to buy a house or unit to live in – known as ‘owner-occupier’ home loans.

When compared to owner-occupier home loans, property investment loans often have higher interest rates and may have stricter eligibility requirements. Just like every major purchase we recommend researching prior and shopping around for the best loan for your needs. This is our experienced mortgage brokers can help.

There are many benefits associated with investing in property depending on your own financial goals. Although typically done for capital growth, the term that describes how your property value rises over time, or for rental income; there are many additional reasons people choose real estate investing.

Some of the advantages of real estate investing, compared to other forms of investment include:

Tax benefits – Unlike owner-occupied home loans, the interest portion of an investment home loan can be tax-deductible as an investment expense. This is one reason many property investors take out interest-only loans, typically over the first 5 years, to completely claim the cost of their repayments as a tax deduction. This is especially beneficial for people in high-income households because if expenses on your investment property, including the loan repayments; are greater than the income you earn from it, then you can offset this loss against your taxable income for that year. The Australian Taxation Office (ATO) lists several investment expenses that investors can claim a tax deduction on, such as:

 

  • Interest paid on the loan.
  • Home, contents and landlord insurance.
  • Maintenance and management costs.
  • Council rates and construction costs.
  • Property value depreciation.
  • Travel expenses to the property in order to carry out inspections or maintenance.

 

As usual, it is recommended that you consult a registered tax agent, such as the Reventon Accounting team, or the Australian Taxation Office (ATO) for more information on tax on your investment property.

Long-term security – Real estate is not a get-rich quick scheme but a long-term investment, which means you can hold onto it for several years as you wait for the property value to grow. At the same time, you’re able to rent out your property for a monthly income.

Steady cash flow – One obvious reason for owning real estate is to boost your monthly income through rental income. The Reventon Property Management team can help you with this by taking care of the rental process, liaising with tenants and dealing with maintenance issues.

Passive Income – Owning an investment property is a great way to earn passive income. We always say investing in property allows you to earn income even in your sleep. This is through both your rental income as well as the profit you gain from the sale of a profit which has grown in value over time.

Great returns – By investing in the right property and best growth suburbs, your real estate investment has an opportunity to grow in value over time allowing you to sell it several years down the track for a solid profit. Download our free property investing starter guide below.

These are just some examples of benefits when investing in property, we recommend you seek professional advice to ensure investing in property suits your financial circumstances and needs. This is where a Reventon property investment consultant can help.

When dealing with any property investment company, you may come across some common terms which do not mean much to you. These are explain below:

Equity – Equity is the difference between the value of your property and the amount you still owe on your current home loan. Usually a homeowner would choose to use this equity to improve their lifestyle, go on a holiday, renovate their home or purchase an investment property.

Capital Growth – Capital growth, which is usually expressed as a percentage or dollar value, demonstrates how much your property has grown in value over time. In it’s simplest form, if you purchased a house for $400,000 and 2 years later a bank or financial institution values it at $600,000 then your capital growth is $200K.

Conditional Approval – A bank or other lender will give you conditional approval for a loan application after it has been assessed but there are pending documents/information required to support your application.

Unconditional Approval – If your bank or other lender gives you unconditional approval then it means your loan has been fully approved by the lender. It indicates that your application is not subject to any other conditions by the lender

Positive Gearing –  Positive gearing is a term often used when speaking about investment properties and refers to the circumstances where you consistently derive a profit from your property investment. This means that your rental income is higher than property costs/expenses. Unlike negative gearing, there  is no tax deductions incentives on a positively geared property and you will be required to pay tax on any net profit from your property.

Negative gearing – Is the term that is used to describe a situation where the expenses of your investment property are greater than the income earned from rental income. It is a common property investment strategy as individuals can deduct these losses against their individual income, i.e salary/wages.

These are just some terms we use when talking about property investment and investment home loans, as usually our friendly team are on hand to explain anything that is unclear to you in detail.

The process we use for a property investment loan is only slightly altered compared to our general finance process, with the focus still being on your individual circumstances and goals.

  1. Make an enquiry - To start your real estate home loan application with us, call us on 1300 039 376 or alternatively submit an enquiry form on our website and we will contact you. 
  2. Obligation Free chat - A friendly Reventon team member will have a brief chat to you about your current situation and financial goals. They will want to know the reason for property investment (e.g. tax benefits, build/grow property portfolio, current property information such as estimated value vs loan amount remaining). Understanding the reasons for property investment will help us find the right loan for your situation. We recommend you chat to a Reventon Property Investment Strategist, even if you’ve already decided on your investment purchase, as we can provide an obligation-free health check for your selected area and property.
  3. Appointment with Reventon Finance - As we do need to physically sight clients, your appointment with a finance specialist would either be via a video call or office appointment, dependant on your location. During this meeting, your experienced mortgage broker will have a more in-depth discussion about your investment loan needs and will request documents such as identification, pay slips and bank statements. 
  4. Explore personalised lender and product options – Depending on your situation, you will likely be provided with a list of no less than 3 loans options, personalised to your needs. Your finance consultant will explain each option to you. You should carefully consider all available loan options, including interest rates, additional features, costs and aim to match your financial goals. You can then decide as to which product you would like to go ahead with that will best suit your goals and situation. 
  5. Property Valuation - Once a lender is chosen, if equity from your existing property needs to be unlocked then a property valuation on your property will be required. We will organise this, if applicable.  
  6. Application paperwork - Our team will thoroughly check all your documents and will send through application and compliance paperwork for signing. Depending on the lender, more paperwork may be required, which will be advised at this stage. 
  7. Submission to Lender - Loan application submitted to lender. It will generally take between 1 – 10 days to receive an outcome depending on the chosen lender. We will always keep you updated on this. 
  8. Conditional Approval - If you are issued a conditional approval this means that the lender requires more documents/information to support your application. 
  9. Unconditional Approval - This means your loan has been fully approved by the lender. It indicates that your application is not subject to any conditions by the lender 
  10. Mortgage documents issued - Your mortgage documents will be issued either electronically or paper copy dependant on lender and our finance team will double check everything before you sign the documents. If you need help with completion our friendly team will only be too happy to assist. 
  11. Prepare for loan settlement - If you are refinancing away from your current lender, usually to access more equity or a higher borrowing capacity for your investment home loan; then they will determine the exact date of settlement, they’ll issue a final payout figure for your old loan. Your new lender will agree upon a settlement date and pay out your outstanding loan balance. 
  12. Settlement - Your new lender will transfer the title deed of your property from your previous lender. You are now a customer of your chosen lender and generally new repayments will commence 1 month after settlement. Often, the settlement date of a refinance/equity release application may be earlier than the settlement of the investment purchase but the process is very similar, main difference being that your conveyancer will be involved for the purchase. Construction loans will also have additional steps but we will guide you through the process if required”
start-investing-in-real-estate-in-2023

Start Investing in Property

A Free Downloadable Guide for First-Time Investors

Want to start investing in property but don’t know where to begin? Our team of experts have created a guide specifically for first-time investors like you.

Learn how to evaluate properties, finance your first purchase and build your portfolio with our step-by-step blueprint. Download your free guide now and take the first step in building your real estate portfolio today! 

Note: It’s important to remember that a guide, no matter how comprehensive, can’t replace the advice of a qualified professional. Before making any investment decisions, it’s a good idea to consult with a financial advisor or real estate professional to determine if property investment is a good fit for your individual circumstances and goals.

Download the free eBook today!

Copyright © 2023 Reventon Finance Pty Ltd

Contact a Finance Specialist

To contact a Reventon Finance mortgage broker, fill out the form below and we’ll get back to you within 24 business hours.