Investing in Property
Research and having the right people to help you are the keys when investing in property. It definitely pays to do your homework on the property market before you dive in, and we’re thrilled to be on board to help you when it comes to financing your decision.
There are a host of options when it comes to investment loans and we'll be able to walk you through the right solutions for you, so please contact us directly via phone, email or our APPLY ONLINE button and we’ll be in touch in no time to see how we can help. Here are some helpful hints to get you thinking.
A line of credit to help balance your investment property finance
If you are negative gearing an investment property, you will have a shortfall between your costs and rental earnings. You can fund this gap with a line of credit (LOC) product using equity in your home or another property.
Say you have a gap of about $500 each month for your investment property, including interest and other costs, such as repairs and rates. You could set up a LOC for $20,000 to fund these expenses for a period of time, which may give you a little more financial breathing room. How long the LOC holds up will depend on interest rate fluctuations and your rental costs.
Like interest on your primary investment loan, the interest on this LOC is tax deductible, providing its sole use is to cover your investment expenses.
One caveat: this strategy works providing there is capital growth in your investment property over the same period, otherwise you are eating into your capital gain.
You also need to have some fiscal discipline and not dip into the LOC for non-investment related expenses, such as holidays.
While lenders will be able to set this structure up quite easily, they are not likely to offer it up front as part of your investment loan. Talk to a broker at AKL Finance Group and financial advisor about whether this strategy is a smart option for you.
There are also a number of other options that we can tailor for you, give us a call or use our APPLY ONLINE button so as we can tailor an appropriate option to suit your specific needs.