The biggest financial impact for property investors
As mortgage brokers, we work with a lot of property investors who - at one time or another - are looking to increase the return on their investment. In many instances, however, investors look in the wrong place.
When they’re thinking of increasing their return, many investors will think of increasing the rent on their investment property.
An investor can increase the rent on their property, but it’s not something they can do all the time; they might get away with an increase once or twice a year, depending of course on their circumstances and lease terms.
An investor actually has the opportunity to seize a much greater impact if they look at their finance. Here’s why.
When APRA’s regulations around investors came into play in 2015, it forced a lot of banks - particularly the big four - to increase investment loan rates. This allowed smaller banks to become more competitive.
By addressing the biggest cost of an investment property, which is usually the mortgage against it, property investors may be able to save a significant amount of money. Instead of having a bit of extra rental income each year, an investor could potentially save thousands on their mortgage repayments if they simply reviewed their loan structure.
When an investor understands what options and savings are available, a mortgage broker can help answer a critical question: if they could save money each month, could they pay off their investment faster and even look at the potential of buying another property?
As APRA’s changes took effect last year, so many of our investor clients started receiving notice from their lender that their interest rate was increasing.This opened up an opportunity for them to broaden their horizon. Investment loan holders should not discount the smaller lenders - sometimes that’s where the biggest opportunities lie.
And that’s also where a broker comes in - we can help navigate investor clients through their options.