Successful property investing isn’t just about the property you buy. It can also hinge on something you may not have given much thought to – your investment loan. Phil Gallagher, Franchisee at Aussie Belmont in NSW’s Hunter region explains four ways your Aussie Broker can help you become a successful property investor.
1. Get a Better Deal on Your Home Loan
Before you start thinking about investment loans, Phil recommends asking your Aussie Broker to review of your current home loan. The reason? The potential to improve cash flow with a lower rate loan.
Phil explains, “A lot of my customers are using home equity to fund an investment property, and where that’s the case, it makes a lot of sense to review your current home loan first.”
He adds, “It’s not unusual to find that an investor’s owner occupied home loan is not the most competitive option available. I often find for instance, that the customer is paying a rate that’s 1% higher than many of the loans available today – especially if they’ve had the same home loan for a number of years. Cutting your home loan rate by just 0.5% can have a significant impact on repayments, freeing up valuable cash flow to invest in a rental property.”
Even better, Phil says your Aussie Broker can usually help you get a better deal on your loan without blowing out the loan term or even necessarily needing to refinance.
2. Provide Insights About the Market You Plan to Buy in
With your home loan in top shape, Phil says the next step is to talk to your Aussie Broker for valuable insights into those locations where you can afford to buy.
He explains, “Investors have more access than ever before to market information, so they no longer have to rely heavily on details provided by selling agents to make an informed decision.”
Phil adds, “Your Aussie Broker can point you in the right direction for key industry insights such as current market values, details of past capital growth and current rental yields – information that puts property investors in a strong position to negotiate.”
Your Aussie Broker can also provide one critical piece of the puzzle that isn’t available to ordinary investors – and that’s details of those postcodes where lenders may impose particularly tight loan-to-valuation ratios (LVRs).
The LVR is the percentage of a property’s value you are able to borrow, and Phil points out, “There are some postcodes where certain lenders won’t lend above 80% of the property’s value.”
It’s essential to know these sorts of details because it can heavily impact your borrowing power across a variety of locations. Phil adds, “Because Aussie brokers work closely with up to 21 different lenders, we know which lenders impose tight LVRs – and those lenders that have more flexible limits for a given suburb. This is where Aussie Brokers add real value, helping investors understand their borrowing power across different lenders and locations.”
