Investing

QBANK's Home Loan Hub is your guide to investment property home loans and building your property portfolio.

Bricks and mortar is still Queensland's most popular form of investment. Before you start thinking about buying an investment property there are a number of things to consider. What are the tax implications? How can you leverage your equity? Before you commit, make sure you are well informed so  you can make the best decision for your financial situation.

Get smart: Financial advice for the right investment choices

Financial advice is a great starting point when you’re thinking about an investment property. A qualified financial advisor helps you look at the big picture and your financial goals. They’ll consider your assets, income, what you spend and recommend investment choices to your budget and how long you want to invest.

QBANK tip: Bridges Financial Services is our licensed financial planning partner. Call 13 77 28 to get started with a free appointment to discuss your investment choices.

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Borrowing power and equity: What’s your investment budget?

Borrowing for an investment property means doing the sums on managing an extra financial commitment – either on top of an existing mortgage or on top of rental costs. If you already own a home, you know that buying and maintain a property comes with costs like maintenance, rates and insurance.

Use a borrowing power calculator to get an idea of your investment property budget. Having a deposit or equity in an existing property will make a difference to your next steps.

QBANK tip: If you’re buying your first property as an investment, use a budget planner to check you’re ready for the costs of home ownership. Do you have a backup plan if your investment property is vacant and you’re not getting rental income?

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Understanding equity: Making your money work for you


Equity is the value of your home minus the existing debt. If you already own a home, you can make the money you’ve already invested in it work for you to fund buying another property.

For example, if your home is valued at $500,000 and you owe $250,000, you have $250,000 in equity. Using the general formula for useable equity (80% of your property value less debt), your useable equity is $150,000.

QBANK tip: Weigh up how much risk you’re comfortable with before you commit to an investment loan using equity – especially if you don’t have any other savings or investments aside from your property.

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Tax: Know the rules

Do your research with the Australian Taxation Office (ATO) or talk to a financial planner about how becoming a landlord or a rentvester may impact your tax.

Capitals gains tax (CGT) may apply if you sell your investment property and make a profit (a capital gain). Capital gains are added to your assessable income as part of your tax return – it may significantly increase the tax you need to pay.

QBANK tip: You don’t have to pay CGT when you sell your principal residence (usually your own home). A 6-year rule applies: you can rent out your home and come back for up to 6 years without needing to pay CGT if you sell it and make a profit.

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Positive and negative: Understanding gearing

Negative gearing and positive gearing are the 2 main ways property investments are structured.

Negative gearing: the costs of owning a property outweigh the income it produces. On paper, your investment is effectively costing you money, but these losses are often tax deductible and provide benefits for properties expected to grow in value over time.

Positive gearing: income produced by a property outweighs the cost of owning it. There are no tax benefits as there are no losses to claim.

QBANK tip: Get some financial advice to decide on the best approach for your investment loan. Look at how long you intend to keep the property before you sell it, projected growth in value, and the financial goals of your family.

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Choosing the right investment home loan

Do your research into the types of investment home loans: choose from variable interest rate loans, fixed rate loans or offset home loans.

Fixed rate home loans have a set interest rate (usually for 1, 3 or 5 years). Then you’ll pay the standard variable interest rate which could be at a lower, similar or higher rate.

Variable rate home loans are generally aligned with interest rates set by the Reserve Bank, but lenders can change rates independently.

Offset home loans have a savings or transaction account linked to your home loan, so your balance is ‘offset’ daily against your home loan. You may pay less interest as your savings are reducing the amount you owe on the day.

Use a loan comparison calculator to check out your choices or talk to our mobile home loan specialists.

QBANK tip: Pre-approval for your loan puts you in a stronger negotiating position when you find the right investment property. Having your finance ready to go means you won’t lose out on your dream investment property while you wait on finance approvals.

Talk to a Mobile Banking Specialist at a time and place that suits you. They’ll talk you through the pre-approval process and what paperwork is needed.

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Managing the property: Ready to become a landlord?

If you’re relying on rent to cover your home loan repayments, it’s important to get a tenant in the door as quickly as possible. It’s a good idea to plan for how you’ll manage the property before you buy. If you manage it yourself, you’ll have to deal with tenants directly and be across rental tenancy laws and processes. If you have it managed by a real estate agent, you’ll pay a fee but it will be more convenient, especially if you don’t live nearby.

Just like owning a home you’ll live in yourself, investment properties come with ongoing costs including:

  • property management fees
  • council rates and insurance
  • maintenance and repairs
  • body corporate or strata fees.

QBANK tip: Working with a real estate agent you trust and who knows the area where you’re buying can help you find the right property, as well as the right tenants.

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House hunting: Choosing the right investment property

Choosing an investment property comes down to the same thing as choosing a family home: location.

Use real estate websites for research, and ask real estate agents for help to find a property with:

  • low vacancy rates
  • high rents compared to property values
  • positive future growth predictions.

Choose a property as if you were going to live in it and look for a property offering what renters want: schools, safety, shops and public transport.

QBANK tip: Get your free Property Report to access the latest real estate market data. Use this information to make an offer and negotiate a price to get you the best start on your investment. Keep in mind that a newer investment property means less maintenance.

Once you've found a property you're keen on investing in, talk to our Mobile Banking Specialist, at a time and place that suits you. They’ll talk you through the next steps and what paperwork is needed.

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