Investment Loans

Property has been an enduringly popular investment in Australia. This isn’t surprising when considering:

• financial deregulation
• the increasing norm of double-income families
• generous tax advantages.

These factors and the willingness of households to shoulder significantly more debt over the past two decades have all combined to significantly increase house property prices.

Investors need to consider different issues to those of home buyers, including how they structure their property loan.

When you borrow money to invest, that investment can either be:

• Positively geared – where the cost of holding the investment (interest on the loan and other expenses) is less than the income you receive from it, or
• Negatively geared – where the cost of holding the investment is greater than the income you receive.

Importantly, the rule of borrowing for investment: always ignore the tax deduction promises and look carefully at the quality of the underlying investment when deciding whether it’s worthwhile.

So when it comes to investing in property, stay well-informed of mooted tax and legislative changes. It’s also useful to know where an investment property fits in with your overall wealth creation strategy. Our engaged and energised team can assist, or we can tap into the knowledge of Strategic Wealth.