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PROPERTY INVESTORS GUIDEGet an investment edge with our Property Investors Guide.

2019 ed.

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What is property investment? 03

The benefits of interest-only loans for investors 04

Is real estate a good investment? 05

How can I invest in real estate with no money? 06

How do I calculate if property investment is worth it (for me)? 07

Investment Property Tax 09

Comparing investment properties in Australia 11

How do banks assess loan eligibility? 12

Final tips and advice when investing in property 15

CONTENTS__

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When real estate is bought with an intent of making a return on the purchase, this is known as a property investment, with this return occurring by either:

1. Renting the property out to another party to earn rental income or;

2. Selling the property for a higher price than it was purchased for (also known as capital gain).

This first form of investment, renting out the property, is typically a long term strategy, where the real estate owner earns a rental income for the property over their years of ownership. In contrast, the second form of investment, capital gain, can be either a short or long term strategy (depending on market conditions and when the property is sold).

Typically, the longer an investment property is held onto, the higher its resale value. Of course, this is dependent on a range of factors, including whether the buyer has done their initial research, ongoing maintenance and market conditions and bought a property in a strong investment area for a fair price. Buyers who buy properties in weaker performing areas may find that their resale value is not as high as expected.

Understanding the risks of property investmentMost people borrow to invest in property, meaning there are often great risks associated with property investment. To reduce your risk when investing, it’s essential that you consider your objectives, lifestyle and financial situation. This means researching information on home loans, strategies, budget and the property investment landscape. If you’re unsure, seek professional advice to help reduce your risk, such as talking to a financial advisor.

Understanding your options right from the start of your investment journey may prevent you from making mistakes. By setting yourself realistic goals that are affordable and within your grasp, you’ll increase your chance of succeeding; plus, you’ll develop an investment approach that suits your individual needs.

Options for your investment loanFinding the right home loan can be a tricky process when there are multiple loan types as well as lenders to choose from, including banks, building societies, credit unions and mortgage brokers.

The one thing all lenders have in common is that they should be able to offer you a range of product features for your investment loan, such as fixed-rate or variable loans, interest-only loans and principal-and-interest loans.

When searching for a loan for an investment property, it’s important to understand that different lenders will have varying rates, and that these rates are not the same for owner-occupiers and investors. This means that when comparing lenders, it’s important that you disclose you are looking for an investment loan so that the lender gives you the correct rate -- if not, you may end up with a bigger loan than you budgeted for.

A good way to start your loan comparison journey is to use the eChoice ‘Search Rates’ tool, which allows you to sift through hundreds of loan options from a variety of lenders. Just remember to change the ‘Loan Purpose’ field to ‘investor’ to ensure you get the most accurate information.

WHAT IS PROPERTYII INVESTMENT?__

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The benefits of interest-only loans for investorsMost property investment gurus recommend that you opt for an interest-only loan at first, as these forms of loans give you greater flexibility and don’t reduce your cash flow. An interest-only loan also enables a property investor to maximise their tax deductions and interest expense.

However, interest-only loans are only available for a set duration (usually five years) and after this time, they revert to a principal-and-interest loan over the remaining term of the loan, with this change in cost often becoming a strain on the budget for many investors. These types of loans can attract higher interest rates.

Due to the differences between each loan type, it is important for investors to carefully consider all loan types and pick the one most suited to their circumstances to help avoid future financial stress.

Property investment newsStaying up-to-date with property investment news is important when you’re going through the process of buying an investment property. However, for many, the process of knowing where to go to find this news can be hard. Luckily, property investment news can be found through a variety of sources.

One way to find the latest property investment news is to type ‘property investment’ into Google search and then click the ‘news’ tab. This method will reveal the latest news stories on property investment as published by major newspapers, magazines, and other publications.

If you are finding the breadth of articles too broad, you can further refine your search results to your needs by going to the ‘tools’ tab and selecting filters to narrow your search.

Another way to stay up-to-date on the latest property investment news is to visit the eChoice website which contains news articles detailing updates in the property investment world.

Property investment reportsYou’ll find hundreds of investment reports online. To unearth those that relate to property, type ‘property investment reports’ into a search engine and then look through the results.

Some of the most reliable reports come from real estate agencies and research groups such as CoreLogic RP Data and Residex. While many of these full reports are free, others will only provide you with a snippet of the information. If you wish to read the rest of the document you may have to register with the company providing the report or pay for a subscription.

If you’re looking for more information and don’t want to read reports, then click on ‘videos’ after you’ve typed ‘property investment reports’ into your search engine. This method will then pull up any videos related to property investment.

Smart Property Investment MagazineSmart Property Investment Magazine is available in print edition or online. This publication is written by investors for investors and is a vital source of property investor news and advice as it lists the latest trends and strategies, and property buying hotspots.

To find the magazine type ‘Smart Property Investment Magazine’ into a search engine. The first result typically reveals the magazine, which you can then elect to subscribe to so that the latest updates will be sent to your inbox.

The magazine hosts content from a range of topics such as the latest news, growing your portfolio, investor stories, improving your investment -- and they even have podcasts. Plus, you can also type a postcode into ‘suburb search’ on the website to find property market data that relates directly to that suburb.

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According to the Australian Taxation Office (ATO), some 2.03 million Australians own an investment property. CoreLogic RPData also estimates that Australian property investors own 2.3 million dwellings nationally, valued at approximately $1.37 trillion. Given this information, on average, each Australian property investor owns 1.28 residences. Thus, the majority of investors own a single property, with some owning multiple homes.

A property investor survey of 742 investors conducted by the Property Investment Professionals Of Australia (PIPA) suggests that the majority of participants (64%) invest in property as it provides better long-term capital gains. Historically speaking, the value of the average Australian home has increased by 412% over the last 25-years. In comparison, over the same duration, shares (ASK All Ordinaries) rose by 261%. If the rate of growth remains the same, in 25 years the average Australian home could be worth $2.9 million.

What does it mean to invest in real estate?The moment you buy a property, whether to live in or to rent out, you are investing in real estate. This means that even a family home is a real estate investment. For instance, a family bought a house in Sydney in 1980 for $56,500. By February 2018 the same property was valued at $789,339. So, over 39 years the parents had made $787,982 on their investment.

If this was an investor-owned property where the owner had chosen to rent it out, over the same duration of ownership the investor would have collected approximately $730,080 based on an average rent of $400 over 39 years (assuming an occupancy rate of 90%).

How do I start investing in real estate?Buying a property is a significant financial commitment and one that is long-term. So, before you jump on the property investment wagon, you need to get your finances in order, and you’ll need to tighten-up your spending habits.

So, how do you do this?

If you have credit cards, debts and other loans, then it’s time for you to pay these off. This strategy may allow you to increase your borrowing power and could help you to meet stricter lending criteria.

Next, you need to think about saving a deposit. Your saving strategy needs to be both affordable and achievable. Start by setting up another bank account, preferably one that attracts a higher rate of interest, and then start putting money into this account weekly.

While you’re saving, start looking at homes. Go to open inspections and get a feel for the market and what your money could buy. This approach also keeps you motivated, so you continue to work toward your goal.

IS REAL ESTATE AII GOOD INVESTMENT?__

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How can I invest in real estate with no money?There are several ways for you to buy property without funding. But it's essential to understand the strategies and how to apply these, and for you to be willing to work hard to achieve your goals. Also, you’ll need to think like an investor; do a little a lot, not a lot a little. Start small and work your way up to more significant projects. Don’t take on too much; otherwise, you’ll find it overwhelming.

Strategy 1 - buy off the plan: The cost to build property is often less than the value of the property when it’s complete. So, a lender may let you borrow against the finished value of an off the plan property providing that the finished property will be worth more than its build cost. This approach is known as using the property’s equity, but it takes a sound understanding of the market and careful planning so that you don’t overcapitalise to pull-off this strategy. It must be noted that this is considered a dangerous and high-risk strategy: most lenders will want to see genuine savings at pre-approval stage and your equity can move into the negative.

Strategy 2 - joint venture: Look at sharing the responsibility of buying a property with other people, also known as a joint venture. Joint venture partners may be one, two or many people who provide equity to guarantee a home loan and increase borrowing power, making securing a mortgage easier. However, for this strategy to work you need to have a contract drawn-up that sets out a budget, financial obligations and an exit plan. This method ensures that all partners are aware of their responsibilities and the division of proceeds. There are risks associated with this strategy as you might become liable for the other parties liabilities. Legal advice is recommended and the risks identified.

What do you do as a real estate investor?As a real estate investor, you purchase property for less than what you sell it for so that you make a profit or capital gain over the time of your ownership. But to be successful, you need to be able to recognise opportunities, have a sound understanding of the property market and be committed to maximising results.

Being a lucrative real estate investor takes time, patience and knowledge. Take the time to get to know the market and to build a network of advisers, hold on to the property and patiently wait for your asset to grow in value. It also pays to gradually develop your property investment knowledge, allowing you to increase your skills and aptitude.

How much do property investors make?How much you make as a property investor depends on your investment strategy, the type of property that you buy and your properties location. Ideally, you want to purchase property in a sought-after area for the lowest price possible, and you want this property to suit the needs of the majority of people looking to rent.

For instance, a common investment strategy is to buy and hold, where you purchase a property and rent it out for several years. By doing this, the property may earn you money via the rent collected, which could increase over time, alongside the home’s value.

For example, if you buy a home for $435,000 and rent it for $725 week for the first year, with rent increasing by $25 a week every year thereafter. When you go to sell the property 10-years later, it is now worth $670,000 and is fetching $950 weekly in rent. Over the time of property ownership, you’ve had an occupancy rate of 90%, and you’ve paid $260,000 off the loan, with $175,000 left to pay off. Therefore, if you sell the property, you’ll make $495,000 or $49,500 (less any capital gains tax) per year of ownership. Plus, you’ve also pocketed $391,950 in rent over the 10-years.

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How do I calculate if property investment is worth it (for me)?Before you rush in and start buying an investment property, it’s crucial to calculate if purchasing a home is a viable option. Doing the maths before you buy a property could prevent you from making a poor decision and help to reduce your risk.

Using online investment property calculators also opens your eyes to shortfalls and other property expenses that you may have overlooked. By understanding all of the costs associated with property ownership, you can make allowances so that these don’t cause you any financial hardship later down the track.

Plan for home costs, and you may’ be successful at property investment. Overlook expenses, and you may be financially challenged and always looking for ways to clawback funds to help make ends meet.

Where can I find free property investment calculators?If you type ‘investment property calculator free’ into your favourite search engine, you’ll turn up several property investment calculators. These calculators will help you to work out if you could afford to buy an investment property, the costs associated with property ownership, your cash flow and rental yield.

Before you purchase any property, investment experts recommended that you calculate costs on at least 100 properties. This tactic helps you to gain valuable insight into what represents value and what doesn’t. Plus, it could help you to buy a property that matches your investment strategy. For instance, if you want to positive gear a property to increase your cash flow, then use a cash flow calculator.

How do I find more advanced property investment calculators?There are several investment property calculators available for purchase. These versions are far more advanced than those that are free. But before you buy the latest version, make sure the calculator has additional benefits that suit your needs.

Most calculators allow you to ‘try before you buy’, giving you the chance to test out the calculator’s features. If the calculator doesn’t offer you a trail, then consider other options because there is nothing worse than making a purchase and finding out that the item you’ve bought isn’t suited to your needs.

Also, not all calculators are for residential property. Some are for commercial buildings so it’s vital you double-check what type of property investment calculator it is before buying.

How to calculate long term capital gains tax on propertyWhen you own an investment property for a long time, it’s highly likely that you’ll incur a capital gain, which is the amount that a property’s value increases by over the time of ownership, less any expenses incurred. For example, let’s say you bought an investment property for $500,000 in 2000. Then, in 2015 a real estate agent values the property at $1 million. The capital gain that you’ve made in 15-years is $500,000, less the cost of property ownership.

Property expenses include agent fees, solicitor costs, stamp duty and any title transfer fees incurred at the time of property purchase and sale. Other expenses that are deductible from the capital gain consist of maintenance and renovation fees, repairs or ongoing corporate fees, and letting charges. Plus, if you’ve owned the property for more than 12-months, then you may be entitled to a 50% discount.

Another crucial consideration is that any home that is your place of residence is exempt from capital gains tax. However, you must have resided in the property for at least 12-months before you sell it. To prove residency, the property must be listed on the electoral roll as your principal place of residence, and you must have the utilities such as gas and power in your name.

Property that was once your principal place of residence (for at least 12 months) that you have then chosen to rent out is also exempt from capital gains tax for six years. After this period, you will again be liable for capital gains tax.

Several capital gains tax calculators are available online. To find a calculator that suits you, type the term into a search engine and explore your options.

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Investment property return calculatorTo calculate your estimated return when buying an investment property, you need to consider your costs, income generated, and rates of taxation and appreciation. Costs include the purchase price of the property, cash invested as well as depreciable value. Other costs include the loan terms and rate, and any closing costs, as well as property tax, insurance and maintenance. Income, on the other hand, includes rent received, any rent increase and occupancy rate.

Often calculating return on investment for a property is complicated; this is why many people opt to use an online calculator. One of the best calculators (that we’ve found) is CalcXML, as it includes all of the features we’ve mentioned and more, so it’s well worth the visit.

Multiple investment property calculatorIf you’re looking to buy more than one investment property, then this is considered as a portfolio. Property portfolios enable you to create a passive income, and many people use their investment portfolio as a means to fund their retirement. If this is your strategy, using a multiple investment property calculator could help you estimate how many properties you need to fulfil your goal.

This calculator is free and takes into account your desired passive income, time to achieve this in, average purchase price of your properties, loan-to-value-ratio, inflation, expected capital growth, selling costs and tax rate. The calculator then works out how many properties you’ll need to reach your goal.

Using equity to buy investment property calculatorThe equity of a property is the dwelling’s estimated value less any debt owed. For instance, if you buy an investment property for $580,000 and you have $120,000 as the deposit, then you’ll need to borrow $460,000. Therefore, you have $120,000 worth of equity in the property. Then, let’s say over the next 10-years you pay $240,000 of that loan, leaving you with just $220,000 owing. Over that 10-years the property’s value has increased to $980,000. Therefore, the equity you have in the property is now $760,000.

But it’s also important to remember that you cannot use all of one dwelling’s equity to secure the purchase of other properties. Instead, you’ll need to leave some equity in the original property, also known as the loan-to-value-ratio or LVR.

The best news, however, is that this equity could be used to finance the full purchase price of an investment property and that you’ll only need to pay the real estate agent a deposit at the time of purchase. Of course, this depends on your lender, loan terms and conditions and your borrowing power.

If calculating equity yourself sounds too confusing, then try using an online equity calculator. This tool is efficient and takes seconds to operate.

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INVESTMENTII PROPERTY TAX__

Before you buy an investment property, it is essential for you to consider your tax obligations. Typically, you’ll need to keep records of your rent received, which becomes taxable income, and any property related payments and other expenses so that you submits claims for these deductions.

Keeping up-to-date, accurate records may make it easier for you to declare all associated property investment costs so that you can claim the maximum amount allowed for your property. Sloppy record keeping could create havoc, and this may result in missed opportunities.

Tax obligations associated with buying an investment propertyWhen you buy an investment property, there are several taxes that you’ll encounter. The most common being capital gains, income, land and property tax.

Capital gains tax - When you sell your investment property you may be required to pay tax on any profit that you’ve made on the purchase. For instance, if you buy a property for $350,000 and sell it for $550,000 10-years later, then you would have made a capital gain of $200,000 less any expenses.

Income tax - You are required to declare any rent that you collect from your rental property, which gets added to your income. However, at tax time, you may be able to also deduct any interest paid on your investment property loan from your income, along with expenses.

Land tax - A state and territory tax payable on the amount of land that you own. This tax does not include dwellings or improvements made to property or your principal place of residence, and the rate of this tax varies depending on the property’s location.

Property tax - Also known as land rates, these taxes fund the maintenance of the community, including parks, waterways, recreational areas and rubbish collection. The amount of tax paid depends entirely on the council that the property is situated in, but typically this value is determined by the municipal value (usually less than market value) of your property.

How to calculate short term capital gains taxShort term capital gains are treated as ordinary income and apply to an asset held for 12 months or less. So, if you buy an investment property and you keep it for less than a year, then any financial gain that you make on that investment will be classified as income. For instance, let’s say you bought a rundown property for $199,000 and you renovated the dwelling. Five months later, you then sold the property for $250,000. The $51,000 that you’d gained would then be added to your taxable income.

When calculating short term gain it’s essential to remember that any property expenses such as mortgage interest and renovation costs are tax deductible. Also, if you hold the property for 12 months and 1 day you’ll be eligible for a 50% capital gain reduction. However, if you keep it for 12 months or less, then you’ll pay 100% in capital gains tax.

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Investment Property Tax CalculatorTo estimate how much property taxes could be in a financial year you can use a calculator. Some of the best calculators for investment property are as follows:

Capital gains tax - A simple calculator that works out how much capital gains tax you’ll pay. If you want to include purchasing and selling costs, then click on ‘advanced options.’

Income tax - This basic calculator allows you to estimate how much tax you’ll pay based on your earnings during a financial year. However, when using this tool, it’s essential you remember this calculator does not include the Medicare Levy, tax deductions or other tax-related payments.

If you want to use a detailed income tax calculator that includes the Medicare Levy and surcharge, higher education loans and any tax offsets, then visit the ATO.

Land tax - A state tax, land tax varies depending on the location of your investment property. Click on the state (below) to go to the respective calculator. Please note - the Northern Territory government does not charge land tax.

ACThttps://www.revenue.act.gov.au/self-assessment-tools-and-forms/calculators/rates-and-land-tax

NSWhttps://www.apps08.osr.nsw.gov.au/erevenue/calculators/landtax.php

QLDhttp://amun.osr.qld.gov.au/sap/osrqld/wd_ltax_calc

SAhttps://www.revenuesa.sa.gov.au/calculators/calculate-land-tax-new

TAShttps://www.sro.tas.gov.au/land-tax/land-tax-calculator

VIChttps://extranet.sro.vic.gov.au/SRO/calcs.nsf/landtax.xsp

WAhttps://apps.osr.wa.gov.au/portal/0/home;jsessionid=pg8Fa8N1ZIaRoM7jWfkpnpy5wy-jS3n1IaZLTc44lQxDMFiLnCcL!-1677711370

Property tax - Your local council charges a fee to collect your rubbish and maintain the community areas surrounding your investment property. This fee is known as property tax or council rates, and it varies depending on where your property is situated. To find out how much this fee is, contact your local council.

How to pick the right location for an investment propertyWhen it comes to selecting the right location for your investment property, many strategists might advise you to look out for ‘hotspots’ and suburbs that are performing well. Other investment experts suggest that you buy property in a location that best represents your investment strategy, such as generating residual income for retirement.

However, we suggest that you combine this advice, as it may enable you to think with your head and budget in mind, rather than your heart, when selecting an investment property location. Also, make sure you consider infrastructure - existing and planned - and what renters want, which is typically an affordable, easy-to-maintain situated close to shops, transport and recreation. Taking all of these aspects into consideration could help you to pick the best investment property for your situation.

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COMPARING INVESTMENTII PROPERTIES IN AUSTRALIA__

There are many desirable places to buy property in Australia. These areas may be regional or city-based, and they can range significantly in price.

So, how do you find the right area without spending hundreds of hours poring over research?

This tool lets you explore suburbs for property investment potential. With this tool, you can select your state, whether you are looking at regional or metro areas, as well as your budget range. The search results will then be narrowed down to properties that suit your needs. The best thing about this tool is that it will also break the results down into long term growth and estimated cashflow so that you can estimate your return.

Investment property in BrisbaneWhile Sydney and Melbourne property prices have experienced a downturn, Brisbane investment property prices are gaining ground. According to economic data, families and downsizers are chasing the sun and moving to Queensland, and BIS Oxford Economics expect Brisbane property prices to rise by 13% by 2021.

But when you review this data, it’s important to consider the collection methods. For instance, if the number of properties was low, then this may not give you an accurate representation of the market. If this is the case, you need to look at other data and cross-reference this to gain an accurate picture.

CoreLogic is another excellent resource for property information.

Investment property in MelbourneOver the last 12-months, Melbourne investment property prices have declined by 5.8%. But if you look at the growth of property in this city over the last decade, then values have risen by 72.4%. At present in Melbourne median dwelling values hover at around $656,163, median house prices are at approximately $768,929, and unit values at $550,389.

Rental yields in Melbourne for houses on average are $435 weekly with a gross yield of 3.0%. On average, units collect $430 weekly with a total rental yield of 4.2%.

To see how individual suburbs in Melbourne are performing, view investment property data, and drag your cursor over the map. The annual growth rate, rental yield, median price, median rent, rental demand and estimated cash flow rate are displayed. If you wish to view other areas type in the suburb name in the ‘Show insights’ boxes found at the top of the map. You can also see unit and house data.

Investment property in SydneySydney investment property rises and falls in value with regularity. This market also tends to be more volatile than other Australian capitals due to higher population influxes, so this city’s property prices could rise significantly in value, and then drop, before rising again.

Over the past three months, the Sydney property market has fallen by 4.5%, and over the last 12-months, dropped by 9.7%. However, this city’s overall growth over the last decade is 79.3%.

Median dwelling values in Sydney hover at around $795,509, while house prices are at $902,786. Average unit prices, on the other hand, are $696,903.

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Investment Property Loans: Rates June 14, 2019

All Dwellings

Loan Type

Principal & Interest Interest Only

OffsetAnnual Rate

Comparison Rate

Annual RateComparison

Rate

Standard Variable 5.95% 6.09% 6.39% 6.27%

1.50%

1 Year Fixed 4.29% 5.93% 4.54% 5.95%

2 Year Fixed 4.04% 5.73% 4.34% 5.78%

3 Year Fixed 4.14% 5.59% 4.34% 5.65%

4 Year Fixed 4.54% 5.59% 5.04% 5.77%

5 Year Fixed 4.54% 5.49% 5.14% 5.75%

Source: CommBank * Introductory, LVR & Package deals are also available. Rates are subject to change at any time.

HOW DO BANKSII ASSESS LOAN ELIGIBILITY?__

Many investors say they are unsure of how banks now assess loan eligibility. Consequently, many feel it’s getting harder to gain finance approval as there have been changes to lending criteria. To overcome this issue, think like a lender. After all, if you lent someone thousands, you’d want to guarantee you’d be paid back too.

To ensure loan payback, lenders typically want an investor to have a sound credit history, a high loan-to-value-ratio, strong savings record and an ability to repay the mortgage, and security. A lender may also assess the rental income (or projected income) associated with the property, cross securitisation (where more than one property secures the loan), loan terms (loan type and conditions), and the serviceability of the loan (your ability to repay your debt).

CBA investment loan ratesInvestment property loan types with the Commonwealth Bank range from principal and interest, interest only, variable and fixed. The rates for these loans vary depending on the term of the loan and the features. As of April 9, 2019, the Commonwealth Bank rates for investment loans are as follows:

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NAB investment loan ratesThe National Australia Bank provides residential investment property loans and packages for investors in the form of principal and interest and interest-only loans. This bank also offers varying rates based on the amount borrowed and the features linked to the loan. If you’re looking for a loan without features, then opt for a ‘base’ loan. Investment property loan rates for the NAB as of April 9, 2019, are as follows:

St George investment loan ratesSt George offers residential investment property loans to property investors who are seeking to buy one or multiple properties. Discounts apply to loans taken out over a specific value and packages are also available. Current rates as of April 9, 2019, are as follows:

Investment Property Loans: Rates April 9, 2019

All Dwellings

Loan Type

Principal & Interest Interest Only in Advance

OffsetAnnual Rate

Comparison Rate

Annual RateComparison

Rate

Standard Variable 5.96% 6.09% 6.41% 6.27%

Not Advertised

1 Year Fixed 4.39% 5.93% 4.39% 5.77%

2 Year Fixed 4.09% 5.73% 4.08% 5.61%

3 Year Fixed 4.19% 5.60% 4.14% 5.49%

4 Year Fixed 4.49% 5.57% 4.64% 5.54%

5 Year Fixed 4.55% 5.49% 4.85% 5.56%

Source: NAB Bank * Interest Only in Arrears, Package, and Portfolio deals are also available. Rates are subject to change at any time.

Investment Property Loans: Rates April 9, 2019

All Dwellings

Loan Type

Principal & Interest Interest Only

OffsetAnnual Rate

Comparison Rate

Annual RateComparison

Rate

Standard Variable 5.92% 6.08% 6.46% 6.62%

Not Advertised

1 Year Fixed 4.64% 5.95% 4.54% 6.42%

2 Year Fixed 4.04% 5.72% 4.44% 6.23%

3 Year Fixed 4.34% 5.65% 4.69% 6.12%

4 Year Fixed 5.04% 5.77% 5.34% 6.22%

5 Year Fixed 4.74% 5.58% 5.14% 6.05%

Source: NAB Bank * Interest Only in Arrears, Package, and Portfolio deals are also available. Rates are subject to change at any time.

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Westpac investment loan ratesThe Westpac bank provides a range of investment property loans for property investors. Several packages exist with this lender along with discounts depending on the amount borrowed. Basic rates are as follows:

Real estate investing groupsIf you’re looking to reduce the amount of risk and also stress associated with buying and governing your investment properties, then an alternative is to join a real estate investing group. These organisations buy, manage and sell property on behalf of shareholders (investors) for a fee.

How real estate investing groups workBasically, real estate investing groups operate like a syndicate, where a group of people buy shares in a fund, and this money is then used to purchase property. This type of setup allows investors who don’t have enough capital or assets to acquire property by themselves to break into the real estate market. Plus, the cost of investing suits many budgets, so often it's affordable for everyone.

Properties purchased through a real estate investing group may be residential - homes, units, apartments and townhouses - or commercial - shops, offices, apartment buildings, shopping centres and hotels, although some groups specialise in commercial property only.

Before you join any group, it’s crucial to review the terms and conditions and understand your financial obligations, risks and returns. If you’re not sure, then seek out independent investment advice.

Real estate investing group companiesThere are two distinct types of real estate investing companies that operate in Australia, such as real estate investment trusts (REITs) and real estate funds. These groups have varying structures, so make sure you take the time to understand their operational configuration before you buy into them.

Some well known Australian real estate investing companies include Ironfish, Sentinel and Integrity. All of these companies are very different from each other, and they have varying services, opportunities and prerequisites.

To find other real estate investing companies type the term ‘property investment companies’and then the name of the investment area you seek into a search engine. For instance, ‘Property Investment Companies Sydney.’

Investment Property Loans: Rates April. 9, 2019

All Dwellings

Loan Type

Principal & Interest Interest Only in Advance

OffsetAnnual Rate

Comparison Rate

Annual RateComparison

Rate

Standard Variable 5.93% 6.07% 6.44% 6.57%

Not Advertised

1 Year Fixed 4.69% 5.94% 4.59% 6.38%

2 Year Fixed 4.15% 5.72% 4.35% 6.17%

3 Year Fixed 4.39% 5.64% 4.49% 6.03%

4 Year Fixed 4.99% 5.73% 5.29% 6.16%

5 Year Fixed 4.69% 5.54% 5.15% 6.02%

Source: Westpac Bank * SMSF, Package, and Portfolio deals are also available. Rates are subject to change at any time.

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FINAL TIPS & ADVICE WHENII INVESTING IN PROPERTY__

Regardless of the type of property that you’re looking to buy as an investor, it’s essential that you have a strategic plan, understand the market, and know your budget before you start purchasing property. By taking the time to set yourself goals and research the national, state and local markets, you’ll narrow down your investment areas. Plus, you’ll also gain valuable insight into property investment, so you’ll avoid the mistakes that other investors have made.

How to invest in real estate with little moneyYou don’t have to be wealthy to start investing in real estate. But you do have to be smart with your money.

Buying regional property might be a great way to break into real estate with limited funds. Another way to invest sooner is to get together with family and friends and pool your resources. These two options mean you need less upfront capital to get started, but they also allow you to buy properties in areas that may offer a good return.

Investment property adviceProbably some of the best investment advice anyone can give you is to be realistic when it comes to setting yourself investment goals. Saying you’re going to buy five investment properties in five-years is an ambitious goal if you haven’t even started saving a deposit for your first property, and you’ve got a mountain of personal debt.

Being realistic also means buying with your head. Treat every investment property as you would a business. Think about profit, return on investment and occupancy rates.

Investment property tips for beginnersAs a beginner investor, you need to plan, plan, and plan, and learn, learn, learn. There is so much information to be found online, in book stores and in libraries about property investment that you’ll probably feel a little giddy looking at it all.

The basics you’ll gather from all of this information though is that you need to have an investment plan and that you must stick to this to be successful. To learn more about investing, surround yourself with a network of experienced professionals - ones who you feel suit your way of thinking. There are hundreds of real estate investors out there, and they all have different ideas. Some of these philosophies could work for you; others won’t. So, you need to decide on your style and then follow this when investing; after all, there are no ‘one-size fits all’ approaches.

Property investment Australia forum One of the best ways to learn more about property investing is to join a forum, and there are hundreds of these across Australia. Forums get frequented by property investors of varying experience levels, so by being a member of a forum, you can upskill your knowledge and also share valuable advice with others. Forums are a great way to build a network and for you to empower yourself by belonging to a like-minded group.

Some great property investment Australia forums to get you started include:

PropertyChat

PropertyInvesting

YourInvestmentProperty

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General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your lending objectives, financial situation or particular needs. Before making a decision on the basis of this advice, you should consider how appropriate the advice is to your particular lending needs, and objectives. Terms and conditions, fees and charges, normal lending criteria apply.Publication Date June 2019.