As a FIFO truck driver, you've got the earning power to build serious wealth through property investment. But choosing the right investment property can make or break your financial future. Let's talk about how to select an investment property that actually makes you money.
Understanding Your Investment Loan Options
Before you start looking at properties, you need to understand what loan amount you can access. Investment property loans work differently from home loans. Most lenders require a higher deposit - typically 20% to avoid lenders mortgage insurance (LMI), though some options exist with lower deposits.
Your borrowing capacity depends on several factors:
• Your FIFO income and employment history
• Existing debts and expenses
• The rental income the property will generate
• Your loan to value ratio (LVR)
As a FIFO worker, your income structure can actually work in your favour. Many lenders recognise FIFO income as stable employment, especially if you've been in the industry for a while.
Types of Investment Properties to Consider
When you're buying an investment property, you've got three main options:
Stand Alone Dwelling
These typically offer stronger capital growth and attract families as tenants. You'll have more control over the property, but maintenance costs can be higher.
Town House
Often a middle ground between apartments and houses. They usually come with some shared facilities but offer more space than apartments.
Apartment
Generally lower entry costs and potentially higher rental yields in the right areas. However, body corporate fees and potential oversupply in some markets are considerations.
Ready to get started?
Book a chat with a Finance & Mortgage Broker at FIFO Home Loans today.
Research Property Markets That Work
Property market research is crucial. Don't just buy where you live or where you think looks nice. Focus on areas with:
• Strong rental demand
• Good infrastructure and transport links
• Employment opportunities for potential tenants
• Reasonable vacancy rates
• Potential for capital growth
For FIFO workers, consider that you understand boom and bust cycles. Apply this knowledge to property markets. Look for areas with diverse economies rather than single-industry towns that might experience dramatic swings.
Calculate the Real Costs
When applying for an investment loan, make sure you factor in all costs:
• Stamp duty (varies by state)
• Building and pest inspections
• Legal fees
• Loan establishment fees
• Ongoing property management fees
• Insurance and maintenance
Interest Rates and Loan Features
Investment loan interest rates are typically higher than owner-occupier rates. You can choose between:
Variable Interest Rate
Rates can go up or down with market conditions. You might access interest rate discounts and additional features like offset accounts.
Fixed Interest Rate
Locks in your rate for a set period, making calculating investment loan repayments easier for budgeting.
Many investment property loans offer features like:
• Interest-only payment options
• Redraw facilities
• Offset accounts
Understanding Rental Yield and Negative Gearing
Rental yield is the annual rental income as a percentage of the property's value. A property costing $500,000 AUD that rents for $400 per week gives you roughly a 4.2% gross rental yield.
Negative gearing occurs when your rental income is less than your property expenses. While this creates a tax deduction, don't buy a property just for negative gearing benefits. Focus on properties that will grow in value over time.
Your Investment Property Strategy
Develop a clear property investment strategy before you start. Are you looking for:
• Strong rental yield for immediate cash flow?
• Capital growth potential?
• A combination of both?
Your first investment property is often the hardest to get approved. Once you've built an investment property portfolio, lenders often view you more favourably for future purchases.
The Application Process
When you're ready to apply, gather:
• Recent payslips and FIFO contracts
• Bank statements showing your savings pattern
• Tax returns
• Details of any existing debts
The streamlined application process through experienced brokers can help, especially those who understand FIFO income structures.
Getting Professional Help
Access investment loan options from banks and lenders across Australia through mortgage brokers who understand your situation. FIFO workers have unique circumstances that not all brokers understand.
A good broker can help you compare different lenders, understand which ones offer the most suitable investment loan options for your circumstances, and guide you through the entire investment loan application process.
Building wealth through property investment takes time and patience. Start with solid research, choose your first investment property carefully, and build from there. Your FIFO income gives you advantages many other investors don't have - use them wisely.
Call one of our team or book an appointment at a time that works for you to discuss your investment property loan options.
