| Buying income producing property is becoming a | | | | deferred period or may require a lump sum |
| popular choice for people seeking to supplement their | | | | repayment after the deferred time. Investment loan |
| income creating an additional revenue stream. Real | | | | repayments may need to be increased to activate |
| estate purchases will typically grow in value. Yet, | | | | this feature. |
| many properties acquired through a structured | | | | • Parental leave – allows to either reduce or |
| financial plan using funds from an investment loan can | | | | defer repayments for a mutually agreed upon period |
| produce income both part time and a full time. | | | | after the birth or adoption of a child. Interest still |
| An Investment Loan as Part of a Personal Growth | | | | accrues on the balance and a fee may be charged to |
| Plan | | | | activate this feature. |
| As part of a strategic personal financial growth plan, | | | | Planning Considerations for Investment Loan Funds |
| an investment loan can be a valuable method toward | | | | There also exist many traditional tax advantages |
| obtaining financial independence. The actual structure | | | | when obtaining an investment loan. Before venturing |
| of your investment loan is an important aspect | | | | into the world of purchasing property through the |
| affecting the return on your investment. Options | | | | funds available from an investment loan, consulting a |
| available to investors today are quite similar in the | | | | financial planner to ensure any purchase from you |
| same loans available for owner-occupied dwellings. A | | | | investment loan is a financially wise long-term choice. |
| person seeking to invest in a secondary, or | | | | There are key factors to consider when investing in |
| income-producing, property can use the same | | | | property including: |
| standard fixed and variable rates for home purchase. | | | | • Sufficient infrastructure in place. Is a targeted |
| Not only will the same rates be available but the | | | | investment property in an area with sufficient access |
| same loan features as well. | | | | to schools, medical facilities, shopping areas, freeways |
| What are Investment Loan Features? | | | | and other main roads? |
| Just as is available for owner-occupied home loans, an | | | | • Capital growth has historically increased steadily |
| investment loan will have the following features: | | | | during the past 20 years. |
| • Redraw – allows access to additional funds | | | | • Check out any potential growth plans including |
| paid into an investment loan if extra funds are | | | | housing density increases or planned roads for |
| needed. It is generally nit available with a fixed-rate | | | | increased traffic flow. |
| loan. | | | | • When examining investment in new subdivisions, |
| • Additional repayments – This feature allows | | | | always check for similar planned developments |
| an investor to make extra loan repayments reducing | | | | nearby that may have a direct impact on the value |
| the interest charged due to reducing the loan length | | | | of your targeted purchase. Many people prefer |
| term. This feature also is typically not available for | | | | renting new homes compared to any three years or |
| fixed-rate loans. | | | | older. |
| • Repayment holiday – allows many | | | | • Establish an investment exit plan that will free |
| borrowers the opportunity to forego repayments | | | | you from financial consideration in any property |
| during specified periods. Although not making | | | | purchased. For example, purchasing a new home in a |
| repayments during these times, interest still accrues | | | | new subdivision may call for sale of the property |
| on the balance. This feature may compel the need to | | | | within three years when it outlives its rental |
| make additional advance payments before the | | | | popularity potential. |