As a FIFO worker, you've likely built up solid savings and steady income during your roster cycles. Now you're thinking about putting that money to work through property investment. Buying an investment property can be a smart wealth-building strategy, but understanding investment loan options and the application process is crucial for success.
Understanding Investment Loans for FIFO Workers
An investment loan differs from a standard home loan because you're buying a rental property rather than your primary residence. Finance & Mortgage Brokers who specialise in FIFO lending can access Investment Loan options from banks and lenders across Australia, helping you find suitable products that recognise your unique employment situation.
The key difference lies in how lenders assess your borrowing capacity. With investment loans, they consider potential rental income alongside your FIFO wages, though they typically calculate rental yield at around 70-80% of the expected rental return to account for vacancy periods.
Types of Investment Properties to Consider
When buying an investment property, you'll need to research property types that suit your budget and investment strategy:
• Apartments: Often require lower initial investment and may offer higher rental yields in city locations
• Town houses: Provide middle-ground option between apartments and houses with shared maintenance responsibilities
• Stand alone dwellings: Typically offer better capital growth potential and attract longer-term tenants
Your property investment strategy should align with whether you're purchasing your first investment property or adding to an existing investment property portfolio.
Key Financial Considerations
Loan to Value Ratio (LVR)
Most lenders require a maximum 80% LVR for investment loans to avoid lenders mortgage insurance (LMI). However, some investment loan options allow higher LVRs with LMI, which might suit FIFO workers with strong income but limited deposit savings.
Interest Rates and Loan Features
Investment loan interest rates are typically higher than owner-occupier rates. You can choose between:
• Variable interest rate: Fluctuates with market conditions but often comes with offset account features
• Fixed interest rate: Provides certainty for calculating investment loan repayments over the fixed period
Some lenders offer interest rate discounts for larger loan amounts or existing customers, so it's worth exploring different investment loan options.
Additional Costs
Beyond the loan amount, budget for:
• Stamp duty (varies by state)
• Legal and inspection fees
• Ongoing property management costs
• Council rates and insurance
The Investment Loan Application Process
Applying for an investment loan requires thorough documentation. FIFO workers need to provide:
- Recent bank statements showing savings patterns
- Employment contracts and pay slips demonstrating roster income
- Tax returns showing consistent earnings
- Details of the property you're purchasing
A streamlined application process works better when you're prepared with all documentation upfront. Many lenders now understand FIFO employment patterns, making investment loan applications more straightforward than in the past.
Maximising Your Investment Strategy
Negative Gearing Benefits
Many investment properties are negatively geared, meaning rental income is less than loan repayments and expenses. This creates tax deductions that can benefit FIFO workers in higher tax brackets.
Building Your Portfolio
Starting with one rental property loan can be the foundation for building a larger investment property portfolio over time. As your first investment property gains value and you pay down the loan, you create equity for future purchases.
Property Market Research
Successful property investment requires understanding local property markets. Look for areas with:
• Strong rental demand
• Infrastructure development
• Population growth
• Good transport links
Working with FIFO Specialists
FIFO Home Loans understands the unique challenges FIFO workers face when invest in real estate. We work with lenders who recognise FIFO income patterns and can structure rental property loans to suit your roster lifestyle.
Our experience with the FIFO industry means we can help you understand which investment loan features matter most for your situation and guide you through the entire process from initial application to settlement.
Whether you're buying a rental property for the first time or expanding your investment portfolio, having the right support makes the difference between a successful investment and a costly mistake.
Call one of our team or book an appointment at a time that works for you. We'll help you explore investment loan options that align with your FIFO lifestyle and financial goals.
