Investment Property

Buying an Investment Property

Property investment is one of Australia’s favourite ways to build wealth. Whether you’re looking for rental income, long-term capital growth, or a mix of both — the right finance structure can make all the difference.

Why Buy an Investment Property?

  • Build Wealth Over Time: Property values in Australia have historically grown over the long term.
  • Rental Income: Earn regular income from tenants to help cover your loan repayments.
  • Tax Benefits:  Depending on your situation, you may be able to claim deductions on interest, expenses, and even benefit from negative gearing.
  • Leverage: Use the equity in your existing home to help fund the purchase, instead of saving a brand-new deposit from scratch.

How Investment Property Loans Work

Investment loans are similar to home loans, but there are a few key differences:

  • Higher Interest Rates: Investment loans often attract slightly higher rates than owner-occupied loans.
  • Deposit Requirements: Many lenders require a deposit of at least 10–20% of the property’s value.

Loan Types: You can choose:

  • Principal & Interest: Pay off both the loan amount and interest.
  • Interest-Only: Lower repayments initially, which can help with cash flow, but the principal doesn’t reduce during this period.

Tax Considerations – Loan interest and certain property expenses may be tax deductible.

Using Equity to Buy

Already own a home? You may be able to use your home’s equity as security for your investment property.

  • What is equity?  It’s the difference between your property’s market value and the amount you still owe on your loan.
  • How it helps: Instead of saving a new deposit, you can leverage equity to fund the purchase or reduce borrowing costs.

What to Consider Before Investing

  • Rental Yield: Will the rent cover your loan and expenses?
  • Location & Growth Potential: Suburbs with strong demand often deliver better longterm returns.
  • Cash Flow: Factor in costs like property management, maintenance, council rates, and insurance.
  • Loan Structure: The right finance setup can maximise tax benefits and cash flow.
  • Risk: Property values can fluctuate, so make sure repayments fit within your budget even if interest rates rise.

How We Can Help

At Big Bear Wealth, we’ll:

  • Review your financial situation and borrowing capacity.
  • Compare investment loan options across multiple lenders.
  • Explain tax implications and work with your accountant for the best structure.
  • Guide you through using equity if you already own property.
  • Support you from loan approval through to settlement — and beyond.