Do you know how to purchase an investment apartment?

As a FIFO worker in Western Australia, you've probably been thinking about putting your hard-earned income to work through property investment. Investment apartments can be an excellent choice for FIFO workers, offering potential rental yield and capital growth while requiring less maintenance than a house.

Understanding Investment Loan Options

When you're buying an investment property, you'll need to access investment loan options from banks and lenders across Australia. Investment property loans work differently from home loans, with lenders typically requiring:

• Higher deposits (usually 20% minimum)
• Proof of rental income potential
• Evidence of your borrowing capacity
• Recent bank statements and income documentation

The loan to value ratio (LVR) plays a crucial role in your investment loan application. Most lenders prefer an LVR of 80% or less to avoid lenders mortgage insurance (LMI), though some FIFO workers choose to pay LMI to enter the property market sooner with a smaller deposit.

Choosing Between Apartments, Townhouses and Standalone Dwellings

When buying a rental property, you have several options:

• Apartments: Lower entry price, minimal maintenance, good rental demand in city areas
• Townhouses: Balance between apartment and house living, moderate maintenance
• Standalone dwellings: Higher capital growth potential but more maintenance responsibilities

For FIFO workers who spend extended periods away, apartments often make sense due to lower maintenance requirements and body corporate management of common areas.

Investment Loan Interest Rates and Features

Investment loan interest rates are typically higher than owner-occupier rates. You can choose between:

• Variable interest rate: Fluctuates with market conditions
• Fixed interest rate: Locked rate for a set period
• Split loans: Combination of variable and fixed portions

Many lenders offer interest rate discounts for larger loan amounts or existing customers. Your rental property loan may also include features like offset accounts or redraw facilities.

The Application Process for Your First Investment Property

Applying for an investment loan involves several steps:

1. Research property markets and potential rental yields
2. Assess your borrowing capacity with a mortgage broker
3. Get pre-approval for your loan amount
4. Research property options in your target area
5. Make an offer and arrange building and pest inspections
6. Finalise your investment loan application
7. Arrange settlement and property management

The streamlined application process with an experienced broker can help FIFO workers manage the timeline effectively, even when working on-site.

Calculating Investment Loan Repayments and Returns

When calculating investment loan repayments, consider:

• Principal and interest payments
• Property management fees
• Council rates and insurance
• Body corporate fees (for apartments)
• Stamp duty and other purchase costs
• Ongoing maintenance and repairs

Rental yield is calculated by dividing annual rental income by the property's purchase price. Many FIFO workers also benefit from negative gearing, where property expenses exceed rental income, providing tax advantages.

Building Your Investment Property Portfolio

Your first investment property can be the foundation of a larger investment property portfolio. FIFO workers often have strong income streams that support multiple property investments over time.

Consider your property investment strategy carefully:

• Focus on areas with strong rental demand
• Look for properties near transport, schools and shopping
• Consider the property market cycle in your chosen location
• Plan for vacancy periods and unexpected expenses

Property Investment Loan Features to Consider

When comparing investment loan options, look for:

• Competitive interest rates
• Flexible repayment options
• Offset account availability
• No monthly account fees
• Ability to capitalise on interest rate discounts

Your mortgage broker can help you compare property investment loan features across different lenders to find the right fit for your FIFO lifestyle and investment goals.

Investing in real estate, particularly apartments, can be a smart wealth-building strategy for FIFO workers. With the right loan structure and property choice, you can build long-term wealth while someone else pays off your investment property.

Ready to explore your investment loan options? Call one of our team or book an appointment at a time that works for you.