Property investor loans
What is a Property investor loan?
Investing in the property has become a popular form of investment in New Zealand over the years.
The amount borrowed to finance the investment property is a Property investor loan. As an investor, you can gain two types of potential returns. One is when you rent the property, you get the rental income and other is capital gains, that is the increase in the value of your property which can get you added income on your investment. An investment property is usually bought with the expectation of gaining long term profits attained with the increase in the value of the property.
Accord home loans collaborate with several banks and lenders and have expertise in getting the client the right type of investor loan.
Accord Home Loans will help you along the way –
- Guidance with prerequisites
- Expert advice
Benefits of property investment
Additional income
Income earned by renting out the property will be an additional source of income. In the long term, when your mortgage is paid off, this income becomes profit on the investment.
Tapping into home equity
You can use the equity from your current home to pay for the deposit of the new investment property. Home equity is the difference between the current value of your home and the present home loan on the property. You can either use cash for the deposit or use the home equity without utilising the cash as the funds for the new property deposit.
Capital growth
The market value of real estate properties is always growing. You can get rapid growth in your investment when there is a rise in the market value of your property. You can make profits by selling the property at the right time and reap the benefits of your investment.
Securing your future
The investment property can assure a secure future. With the increasing housing prices, your investment may make long-term profit and generate additional income.
Wealth creation in the long term
Investing in and holding onto the property for a long term will aid in getting tax incentives on your personal income.
So how do I get started?
Gathering deposit
To buy an investment property, a 20%-40% deposit is required for the loan.
Plan of action
When investing, you should have a plan of action whether to rent out your property or capitalise by selling it with profits. You can also flip it, renovate and then sell the property at a higher cost. With bright line property test, you may want to review the opportunity of when to sell your property for maximum capital gains.
Getting pre-approval
Next step is getting an investment loan pre-approval. The lender will assess financial status to determine how much amount can be borrowed and all the documentation that is required for the loan approval.
Accord home loans will help you identify which lender will best suit your investment loan needs from our panel of secure banks and lenders.
In addition to the deposit (20-40% of the property price), there are a few other costs to consider too. Like valuation fees, loan-application fee (can be waived off), Statutory government charges, Conveyancing and legal fees and Lenders Mortgage Insurance (LMI) if you are borrowing more than 80% of the property value.
While these charges will add to the budget currently, your property will bring you more benefits in the long term.