Unlock Your Property Dreams with Rentvesting!

Unlock Your Property Dreams with Rentvesting!

Saving for a deposit for your first home requires discipline. It can be hard work, especially when the market dynamics are influenced by interest rate movements or growing values in your target suburbs.

But don’t let frustration signal the end of the road for your ownership ambitions. As experienced mortgage brokers, we believe you can modify your strategy to ensure you can climb onto the property ladder.

One option you could consider is becoming a ‘rentvestor’. Rentvesting is where you purchase a property within your budget and rent it out. You then rent where you want to live while reaping the benefits of being a property owner and landlord.

It can be a great approach for those who want to stay in busier areas, such as major cities, yet remain focused on owning real estate.

Below are some tips and watch-outs to help you consider a rentvesting strategy.

THE POSITIVES:

  • THINK LONG-TERM: Capital gain from property takes time, so make sure it matches your other personal and financial goals.
  • PROPERTY CHOICE: Your purchase must be attractive to tenants. The property will crush your cash flow if it’s vacant. Research the types of homes popular with renters including agents and reviewing rental listings for the area.
  • LOCAL SERVICES: Ensure your property is near shops, schools and other amenities. Local transport is not the best in many areas but good transport can help attract good tenants.
  • FINANCIAL BENEFITS: A good accountant will also maximise the tax benefits of being a landlord. Make sure you get tax advice before you purchase. Don’t assume! Your accountant is best placed to know your circumstances.

THINGS TO WATCH:

  • CASH SHORTFALL: The rent may not cover the entirety of the mortgage. Make sure you have the cash flow to cover any shortfall and know how long you can cover a gap before it becomes personally unsustainable.
  • LOAN COSTS: Lenders tend to charge a higher interest rate on an investment loan, so consider whether living in the property for a while is an option for the first year or two.
  • MANAGEMENT FEE: Many clients use a property manager to look after their property and pay 6-10% of the rent in fees. A good property manager will help set the rent, negotiate with potential tenants and handle maintenance. Make sure you budget for them.
  • UPKEEP COSTS: If you buy an apartment, predetermined strata fees apply and should be in your budget calculation. With a house, maintenance costs can be higher. Make sure a broker hot water service doesn’t tip your finances over the edge.

If you would like to discuss any of the above, please reach out by requesting a call back below.

Want Your First Property Investment? Everything You Need to Know, Including SMSF Option

Investing in property can be a game-changer on your path to financial success. Whether you’re aiming to create wealth, secure a steady stream of passive income, or both, property investment offers remarkable opportunities. If you’re new to this exciting venture, you’re in for an enlightening ride. In this blog, we’ll cover all the essentials you need to know, including the intriguing SMSF option.

Unlocking the Benefits of Property Investment:

Property investment has the power to transform your financial landscape. It’s not just about owning a piece of real estate; it’s about creating wealth and generating passive income streams that can sustain you for years to come. Property values have historically appreciated over time, making it a wise choice for long-term wealth accumulation.

Residential vs. Commercial: Choosing Your Path:

Deciding between residential and commercial properties is a crucial step. Residential properties often offer steady rental income and are more familiar to first-time investors. Commercial properties, on the other hand, can offer higher rental yields but might require more intensive management. The choice depends on your risk appetite, investment goals, and personal preferences.

Individual, Company, or SMSF: Structuring Your Investment:

When it comes to structuring your investment, there are multiple avenues to consider: individual ownership, company ownership, or utilising a Self-Managed Super Fund (SMSF). Each option has its pros and cons. Individual ownership offers simplicity, while company ownership might provide some asset protection. SMSFs allow you to invest using your superannuation funds, but they come with strict regulations.

Good Debt vs. Bad Debt: Structuring Loans for Tax Purposes:

Understanding the concept of good debt and bad debt is crucial in property investment. Good debt is borrowed money used to acquire assets that generate income or appreciate in value. Structuring your loans strategically can help you maximise tax benefits. For instance, an interest-only loan might suit an investment property, allowing you to deduct the interest from your taxable income.

Chasing the Best Interest Rate:

Interest rates play a significant role in your investment’s profitability. Securing the best interest rate can save you thousands over the life of your loan. As mortgage brokers, we have access to a wide range of lenders, helping us find the most competitive interest rates tailored to your investment needs.

Having an expert team on your side:

Investing in property involves more than just securing a loan. That’s where our team of expert referral partners come in. Collaborating with financial planners, accountants, and investment property consultants can ensure that your investment aligns with your overall financial strategy. Financial planners can help you make informed decisions, accountants can optimise your tax strategy, and property consultants can guide you toward the right investment opportunities.

Start Your Property Investment Journey with Bayland Finance:

At Bayland Finance, we’re your trusted partners on your property investment journey. We understand that every investment is unique, and we’re here to provide personalized guidance. Whether you’re considering residential or commercial properties, evaluating different ownership structures, or aiming to optimize your tax benefits, our team has the expertise to assist you every step of the way.

Conclusion: Your Investment Future Starts Here

Property investment can pave the way to financial independence and long-term prosperity. From understanding the benefits of investing to choosing the right property type and ownership structure, there’s a lot to consider. However, with the right team by your side, the journey becomes smoother and more rewarding.

Are you ready to embark on your property investment journey? Bayland Finance is here to help you navigate the complexities, make informed decisions, and set the stage for a prosperous investment future. Reach out to us today to start your journey toward property investment success. Your financial dreams are closer than you think.