As a FIFO worker in South Australia, you're in a unique position when it comes to buying an investment property. Your higher than average income can open doors to investment loan options that might not be available to everyone else. However, the irregular nature of FIFO work means you need to approach property investment strategy differently.
Understanding Investment Loan Options for FIFO Workers
When you're ready to invest in real estate, you'll have access to investment loan options from banks and lenders across Australia. Unlike owner-occupier loans, rental property loans typically come with:
• Higher interest rates (usually 0.1% to 0.5% above owner-occupier rates)
• Stricter borrowing capacity assessments
• Different loan to value ratio (LVR) requirements
• Potential lenders mortgage insurance (LMI) if borrowing above 80%
Your FIFO income can actually work in your favour here. Lenders recognise that FIFO workers often earn substantial salaries, which can support larger loan amounts and stronger investment property portfolios.
Choosing Your Investment Property Type
The South Australian property market offers various options for your first investment property:
Apartments: Often provide higher rental yields in city locations, making them attractive for investors focused on cash flow. The application process tends to be more straightforward, and stamp duty is generally lower due to reduced property values.
Town houses: Strike a balance between affordability and growth potential. They're particularly popular in suburban areas where FIFO workers might prefer to invest close to home.
Stand alone dwellings: While requiring higher loan amounts, these properties often deliver stronger capital growth over time and appeal to families in the rental market.
Rental Market Analysis for South Australian FIFO Investors
Before applying for an investment loan, research property locations that align with your investment goals. South Australia's rental market shows particular strength in:
• Areas near major employment hubs
• Suburbs with good transport links
• Locations popular with young professionals and families
When calculating investment loan repayments, factor in the rental yield you can reasonably expect. Properties in established suburbs often provide more stable rental returns, while emerging areas might offer higher growth potential but variable rental demand.
Interest Rate Considerations
You'll need to choose between variable interest rate and fixed interest rate options. Many FIFO investors opt for variable rates to take advantage of potential interest rate discounts and offset account features. However, fixed rates can provide certainty when planning your property investment strategy.
Remember that investment loan interest rates are tax-deductible, and you might benefit from negative gearing if your property expenses exceed rental income.
The Investment Loan Application Process
When you're ready to start the investment loan application, you'll need to provide:
• Bank statements showing your FIFO income pattern
• Employment contracts or letters confirming ongoing work
• Details of the property you're purchasing
• Evidence of savings for deposit and associated costs
• Information about your existing debts and expenses
FIFO workers often benefit from a streamlined application process when working with brokers who understand the industry. Your irregular income patterns don't have to be a barrier – they just need to be properly presented to lenders.
Property Investment Loan Features to Consider
Look for investment loans that offer:
• Offset accounts to reduce interest payments
• Redraw facilities for accessing equity
• No ongoing monthly fees
• Flexibility to split loans between variable and fixed portions
These features can significantly impact your investment returns over time, especially as you build a larger investment property portfolio.
Managing Stamp Duty and Costs
Buying a rental property involves various costs beyond the purchase price. In South Australia, stamp duty varies based on property value, and you'll also need to budget for:
• Legal fees
• Building and pest inspections
• Loan establishment fees
• Ongoing property management costs
Factor these into your borrowing capacity calculations from the start.
As a FIFO worker, you have unique advantages when it comes to property investment. Your higher income can support investment loan applications that might be challenging for other borrowers, and your disciplined savings approach often translates well to property investment.
The key is working with professionals who understand both the FIFO industry and investment property lending. They can help you access the right investment loan options and develop a property investment strategy that works with your lifestyle and financial goals.
Call one of our team or book an appointment at a time that works for you to discuss your investment loan options.
