Can I Afford An Investment Property?

Buying an investment property is a big decision.

Many of my clients ask me how much cash they need to purchase an investment property, and if they can afford it. In many instances no cash is required, and it is affordable due to current interest rates. These type of loans work if you have enough equity in another property. Banks can approve loans of up to 105%, which is the full purchase price plus stamp duty.

Banks recognise the rent you receive goes a long way towards paying the interest on your loan. This is also tax effective, as the interest you pay on an investment loan is tax deductible.

As a qualified Charted Accountant I can work alongside your accountant to make sure the loan is structured correctly. It is very important to make sure the non-deductible part of your loan is separated from the deductible part. You must also be aware that the bank is taking security from both your home and the investment property to support the loan.