Investing in the right property at the right time is a great way to build your wealth. The current record low interest rates make it an optimal time to purchase an investment property.

If you’re investing in property and you intend to rent to tenants, be sure to ask the real estate agent for a rental evaluation. Also confirm your rental expectations by checking current weekly rents on similar properties. The benefits of property investing start with securing the best advisers.

Investment loans may have a higher interest rate than a home loan. This can depend on the particular lender and any risk they associate with the property or investment loan.

Interest-only loans can also be an option for investment properties. These loans are usually great at tax time because you can offset the interest against the rental income and other associated costs.

Remember with an interest-only loan that you’re not paying anything off the mortgage, and will still owe the full amount you borrowed at the end of the term of the loan. The long-term attraction of interest-only loans is that your property can increase in value and be worth more than you paid for it. In other words, your equity will increase as you go about your everyday life.

The equity in your home is the value of the property minus the amount owed to a lender. So if your home is worth $600,000 with a mortgage of $250,000 then you have equity of $350,000.

The good news is that you can generally use this equity as a deposit on an investment loan.

Talk to an Entry Finance broker if you’d like to find out how much equity you have in your home.

When you buy a property you’ll have establishment fees, solicitor fees and stamp duty to pay. You can search for your state or territory stamp duty calculator online once you know how much you’re paying for your property. This will enable you to see the amount of stamp duty you’ll be paying.

There’ll be no broker fees because our services will be paid by your lender.

It is a good idea to incorporate your fees and charges into the amount you borrow (your investment loan).

Your mortgage broker can help you work out the fees and charges you’ll have to pay. They can also let you know if there’s any way to minimise the costs.

Your Entry Finance broker will help you calculate the fees you’ll need to pay.

It’s only possible to negative gear the costs of owning an investment property if those costs exceed the income the property produces. So, if your mortgage and costs (water and council rates, insurance, maintenance) cost you $25,000 per tax year and your rental income is $16,000, you can claim the difference as a deductible tax benefit.

If you want to investigate negative gearing further, contact an Entry Finance mortgage broker for advice on the button below.

If your income from your investment property exceeds the cost of the investment loan and associated costs plus maintenance of the property, then you’re positive gearing.

So, if your mortgage and costs total $25,000 per year, and you receive $30,000 in rental income from the property you will be subject to additional tax because the money you earned through your property is considered income.

If you want to explore this further, chat to one of our mortgage brokers.