The Complete Guide to Financing an Investment Property

 

Australia is a developed tourism destination and is rated as one of the most inhabitable countries worldwide, well-reputed for its high living standards. In 2021, Perth, Adelaide, Sydney, Melbourne, and Brisbane all were featured in the top liveable cities globally. 

Attractive beaches, thick tropical rainforests, wavy hills, above 3000 hours of yearly sunshine, national parks, wild animals, and significant sports and cultural activities are the precious natural and human environmental resources in Australia are attributes to attract investors from all over the world.  

 

Property investment is one of the most appropriate methods to accumulate wealth. But it is a long-term commitment. That’s why you must research before venturing into the real estate sector. 

 

If you’re contemplating buying an investment property in Australia after taking an investment loan, then you must read the entire article and know about the ins and outs. 

 

A few reasons why you should invest in Australian property are as follows: 

 

  1. Steady Growth in Property Market 

 

Investors are attracted to investing in Australian properties due to rental growth. For years, the country has witnessed stable rental growth while attaining capital growth.  

The present average rental output rate of Sydney is 5%. The average rental output rate is calculated as per the annual rental income as a percentage of house prices. The rental income can approximately be the same as the price of holding the property, and some even have only cash flow income. 

 

Moreover, the real estate market in Australia is of lower risk than real estate markets of other nations. Property prices are appreciating at a phenomenal average annual compound growth rate of 6.8%. 

 

  1. Population Growth 

 

During real estate investment, one of the principal factors that you must look into is the population of the region. In Australia, the population is growing in important cities such as Sydney, Melbourne, and Brisbane.  

 

The vacancy rate in Australia is minimal at present, at less than 2% vacancy rate. With low-interest rates and increasing population growth over the recent past, the demand for housing is much more than the supply. As long as the property rental price is logical enough, it will grow in popularity, ensuring both rental and capital growth for investors as well as the mortgage brokers in Australia.  

 

  1. Consistency  

 

Australia’s real estate market is one of the steadiest property markets worldwide. It has an average ROI of 7% per annum. Moreover, it also has fewer years of decline compared to other property markets globally. For more than a century, Australian investment properties have enjoyed a consistent rise in the capital.  

 

  1. Easy to Invest 

 

It is convenient investing in Australian properties. Unlike other nations, Australia doesn’t have rigid foreign investment laws, making it effortless for investors to invest in the Australian property market.  

 

A few things that you must be conscious of are as follows- 

 

  • The legal procedure in Australia is transparent and has similarities with the UK system  
  • The country possesses effective and strong consumer protection legislation through the National Consumer Credit Protection Act 2009 (NCCP Act) 
  • The immigration trend in Australia is expected will grow over the coming 50 years.  
  • As far as the tax deduction policy is concerned, although the seller needs to pay VAT once the property is sold, Australia’s tax law has a very liberal deduction policy. Maximum expenses incurred during buying can be offset by the income tax. 
  • As far as the loan policy is concerned, several Australian banks offer financial products to help overseas investment and lending, including loans that can just pay off loans with interest. 

Inference 

 

As Australia has witnessed economic growth over the last decade, a lot of the foreign property markets like the United States market and the Hong Kong market have suffered massive losses in the past, with a few unstable economies suffering a price drop of nearly 70% in the housing sector. On the flip side, the Australian market continues to remain unassailable.  

 

If you search for the best online home loans in Australia then you’ll find that the Australian investment property market instils the confidence among the investors that they need and could be the best option for your long-term wealth-building objective. Even for the long-term investment commitment, the Aussie property market could be the best option for you. The low volatility of real estate in Australia makes it a preferred choice over other property markets as well as the stock markets worldwide. Irrespective of the country you are from, you are welcome to invest freely in the Australian property market. 

Location: United States

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