Welcome to our winter Wealth Management update
Buying an Investment Property
With interest rates at record lows, interest in investment
properties has boomed. This article explores the pros and cons of
buying investment properties.
How can I fund an investment property?
If you have equity in your own home, most financial institutions
will allow you to borrow up to 80% of the combined value of your
own home and the proposed property. This is subject to meeting
serviceability criteria (which is essentially having sufficient
cashflow, after tax and living expenses, to be able to service the
monthly repayments).
Example: Joel owns a home worth $800,000 with a
mortgage of $400,000. Joel earns $80,000 per annum. He wants to buy
an investment property but is unsure about how much he can borrow
and whether or not it is affordable.
