In the first part of this two-part article, Wealthy You, your trusted mortgage broker, has already shared five helpful tips on how you can start investing in real estate property. As mentioned, the article intends to guide you through the process of becoming a successful property investor and ensure that your first time will be a positive experience.
In continuation, here are the other steps to take when investing in real estate property from one of the best mortgage brokers in Sydney:
Step #2: Prepare Your Deposit
Once you have completed the first step and you believe you are ready to become a real estate property investor, you can move on to the next step, which is preparing your deposit.
Like with other types of home loans, you’re going to need at least a 20% deposit for the investment property you want to buy. It’s possible to get an investment loan that allows you to pay lower than the standard 20% deposit, but it’s likely that you’ll have to pay LMI or Lenders Mortgage Insurance.
You may be a beginner in investing but if you have been a homeowner for many years now, you probably have more than enough equity built up that you can use instead of a cash deposit. However, if you don’t have a home of your own and you do want to invest in property even if you have little money at present, you might need to get a guarantor loan.
A guarantor is someone who has more than enough home equity that they can provide a guarantee for your loan instead of you putting up a cash deposit.
Once you have your deposit ready, you can begin considering the available types of investment loans to choose from. Make sure that you consider the interest rates. They will be higher for actual investment properties than the rates for an owner-occupied property.
Step #3: Calculate Both One-Time and Ongoing Expenses
Say you got your way around a deposit. You should know that there are still other expenses that come with being a rental property owner.
One Time Costs
There are some upfront expenses that you need to be ready for right from the get-go. From application fees, to stamp duty, and all the legal fees, you’re going to need a substantial amount for these, too.
Another one-time cost you will have to incur will be for a property inspection. You shouldn’t skip this because you want to make sure that there are no pest problems or structural problems with the building that you are buying.
Ongoing Expenses
The expenses don’t stop when you buy a rental property—it only begins there. You need to prepare for ongoing costs like the following:
- Insurance
- Advertising costs
- Maintenance costs
- Management fees for agents
- Taxes
- Loan interest
- Utilities.
Step #4: Apply for Investment Home Loan
Once you have determined that you are indeed ready for the responsibility of being a rental property owner, you can now start applying for an investment home loan. You should only go to versatile mortgage brokers who may be able to provide you with a mortgage solution that is suitable to your needs, like Wealthy You. Your broker should be able to answer all your questions regarding the loan. They should also provide you with sufficient assistance throughout the loan application process.
Conclusion
Remember that a loan is a huge undertaking that needs careful consideration so you shouldn’t rush this step. Being a real estate investor is not a simple matter. Hopefully, you’ve learned a lot from this post so you’ll be ready for your investing journey.
You want to get a loan from only the best mortgage brokers in Sydney, so you should choose Wealthy You. Our team can provide you with the right mortgage solutions that will be perfect for what you need. Contact our lending specialist today to learn more!
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