You’ve stepped onto the property ladder -Congratulations! You have done well. And now you want to start building a rental portfolio, but where do you start? And how can you fast track the process? Below we discuss what you can do now so that you can line yourself up to purchase your first investment property…
This is something that we talk about a lot. Most banks will allow you to make increased repayments, which means that you are paying off more principal and you end up paying less interest and you are increasing the amount of equity that you have in your home – which you can use to buy your first investment property.
You would be surprised by how much a freshen up can add value to your home. If you home is a bit dated, a tidy up can make a big difference in your property value – which frees up more equity (do you see the pattern here). After you have completed renovations (big or small) getting a Registered Valuation will show exactly what you property is worth (and how much equity you can use for your new purchase)
Before you buy a rental property, you will want to make sure that you have done your research (just like you research to buy your first home). What price range are you looking for? What areas do you want to buy in? What is the expected rental income? Your ideal investment property could be in a completely different area to what you would expect.
Get the team together
Like the first home buying process – you don’t need to do it alone. Talk to your Mortgage Broker, Real Estate Agent, Accountant, Lawyer and other experts. Talk about what you want to do – and how they can help you.
For you to purchase an existing investment property with a mainstream bank you would need 35% for the investment property and you would need to keep 20% equity in your existing home. But you should be aware of all the options. You can buy a new build investment property with a 20% deposit, OR you could look at specialist lender options that will allow you to buy an existing property with a 20% deposit. Either way – you have options.
When you are looking to buy your first investment property or are just wanting to chat to someone about what you can do now so that you can buy your first investment property sooner, call one of our advisers today 07 959 1851.