Buying an investment property is a brilliant way to secure your financial future on the back of a growing property market. But so many Australians consider it out of their reach.
That's simply not true, especially here in South Australia and Adelaide. Purchasing a new investment property can be fairly straight forward, especially if you already own your own home. On that note, we've had a look at how and why buying and owning investment property can be so easy.
Using equity for a deposit
Us Australians are equity rich. In fact, CoreLogic RP Data and Aussie research shows that on average homeowners here hold 48.4 per cent equity in their properties, or around $242,642. By refinancing to unlock that equity, with the help of a mortgage advisor you trust, you could be the proud owner of a new investment property within weeks.
All it takes is a 20 per cent deposit, That amount could be as little as $80,000 if you buy just under the CoreLogic average value in Adelaide of $479,540. Refinancing to access that deposit can be surprisingly straight forward as long as you still have 20 per cent equity in your current home.
But how about the cost of paying your mortgage and keeping your investment property once you've bought?
Buying high yielding property
The secret to paying your investment property's mortgage with ease is barely a secret at all.
The secret to paying your investment property's mortgage with ease is barely a secret at all. Buying a property with a high rental yield will mean that the income your investment generates could cover all of your mortgage repayments – or more.
For an example let's say you've invested in a unit in Elizabeth East, a suburb in North Adelaide. Here Smart Investment Property puts the average unit price at only $135,000 and the average yield for such a property at 8.67 per cent . That means your gross rental income would be roughly $11,704 a year.
Assuming a 30 year home loan term, a 20 per cent deposit and an interest rate of 4.29 per cent – you'd have $5296 left over after your mortgage repayments. That's amount should be enough to maintain the property, cover any unexpected costs and even provide you with a very small income right from day one. As you pay off your mortgage that amount will only grow!
As you can see making a start in property investment doesn't have to be difficult. With the help of an experienced mortgage advisor here at Advantage Finance you could be securing a better financial future with property sooner than you ever believed possible.