There are two reasons for buying a property -- either as a home to live or more commonly in countries like Australia, the second reason is buying property as an investment. These are completely different journeys and processes. Yet most of the time, property investors mix their emotions as though they were buying a home to live in.
As of the most recent data, Australia has around 2.2 million property investors, reflecting the country's strong preference for real estate as a wealth-building tool. Property investment remains one of the most popular avenues for Australians to grow their wealth, with many individuals owning more than one investment property.
This trend has been supported by favourable tax policies like negative gearing and capital gains tax concessions, which encourage both seasoned investors and first-timers to enter the market. Despite rising interest rates and market fluctuations, the number of property investors remains high, driven by long-term growth expectations in key urban and regional markets.
From a lending perspective, here are the top 3 things you should be aware of before building your property investment portfolio:
Loan-to-Value Ratio (LVR) Requirements
Lenders typically require a deposit that represents a percentage of the property's value, influencing how much you can borrow. At Esho Capital, we specialise in offering tailored loan solutions that often include LMI waivers for professionals, which means you can borrow at higher LVRs without the added cost of lenders mortgage insurance. This gives our clients more flexibility when building their investment portfolios.
Interest Rates and Loan Terms
Interest rates have a direct impact on your investment returns. Fixed-rate loans offer certainty, while variable rates provide flexibility but can change based on market conditions. At Esho Capital, we work closely with you to secure competitive interest rates and loan structures that align with your investment goals, ensuring that you can manage your cash flow effectively across both short and long-term horizons.
Serviceability and Debt-to-Income Ratio
Lenders assess your ability to service debt based on your income and current financial commitments. At Esho Capital, we specialise in working with investors and sophisticated clients, helping you structure your finances in a way that maximises your borrowing potential. Whether you’re starting with one property or scaling a portfolio, we assist in navigating serviceability requirements and finding solutions that enable long-term growth.
Interested in working with our team on building your portfolio and unlocking your borrowing capacity? Click the link below to book a time.
You can also listen to our Podcast archive with more than 100 episodes to help you navigate the market.
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