Working fly-in, fly-out in Queensland puts you in a unique position when it comes to property investment. Your regular income and time away from home can actually work in your favour when buying an investment property. Let's chat about what you need to know about investment loans and how the rental market stacks up for FIFO workers.
Understanding Investment Loan Options
When you're looking to invest in real estate, you'll find banks and lenders across Australia offer different investment loan options. The key difference between an investment loan and a home loan is that you're purchasing a property specifically to generate rental income.
Your loan amount will typically depend on several factors:
• Your borrowing capacity based on your FIFO income
• The property's value and location
• Your loan to value ratio (LVR)
• Whether you'll need lenders mortgage insurance (LMI)
Most lenders will finance up to 80% of an investment property's value without LMI. If you want to borrow more, you'll likely need to pay LMI, which protects the lender if you can't meet your repayments.
Interest Rates and Loan Features
Investment loan interest rates are generally higher than owner-occupier rates. You'll need to choose between:
Variable Interest Rate: Your rate can go up or down with market changes
Fixed Interest Rate: Your rate stays the same for a set period, usually 1-5 years
Many lenders offer interest rate discounts based on your loan amount and relationship with them. When calculating investment loan repayments, factor in that you'll also have:
• Property management fees
• Council rates and insurance
• Maintenance costs
• Stamp duty (which varies by state)
Ready to get started?
Book a chat with a Finance & Mortgage Broker at FIFO Home Loans today.
Research Property Markets in Queensland
As a FIFO worker, you're probably familiar with various Queensland towns and cities. This local knowledge can be valuable when choosing where to invest. Consider these property types:
Stand Alone Dwelling: Often appeals to families and can provide stable rental income
Town House: Lower maintenance than houses, popular with young professionals
Apartment: Usually requires less upkeep but check strata fees
When you research property, look at:
• Rental yield (annual rent divided by property price)
• Vacancy rates in the area
• Population growth and employment prospects
• Infrastructure developments planned
The FIFO Advantage in Property Investment
Your FIFO lifestyle actually offers some advantages when buying a rental property:
- Steady Income: Regular FIFO wages can demonstrate strong borrowing capacity to lenders
- Tax Benefits: You might benefit from negative gearing if your property expenses exceed rental income
- Market Knowledge: Your work travels give you insights into different areas' growth potential
- Investment Focus: Time away from home means you can focus on building your investment property portfolio
Applying for an Investment Loan
The application process for investment loans involves providing:
• Bank statements (usually 3-6 months)
• Payslips and employment contracts
• Tax returns
• Details of any existing debts
• Information about the property you want to buy
Many lenders now offer a streamlined application process, but investment loan applications typically take longer to assess than home loans. Your first investment property application will be scrutinised more closely than if you're adding to an existing investment property portfolio.
Developing Your Property Investment Strategy
Successful property investment isn't just about getting finance. Consider your long-term property investment strategy:
• Will you focus on capital growth or rental yield?
• Do you want properties in mining towns or major cities?
• How many properties do you eventually want to own?
• Will you manage the properties yourself or use an agent?
The property market can be unpredictable, but having a clear strategy helps you make informed decisions about when and where to buy.
Investment Property Loan Features to Consider
When comparing investment loan options, look for features that suit your situation:
• Offset accounts to reduce interest charges
• Redraw facilities for accessing extra payments
• The ability to fix portions of your loan
• No monthly account keeping fees
Remember, the lowest investment loan interest rate isn't always the option that saves you the most money over time.
Building wealth through property investment can complement your FIFO income, but it's important to understand all the costs and risks involved. Getting professional advice tailored to your specific situation and FIFO circumstances can help you make informed decisions about entering the property market.
Call one of our team or book an appointment at a time that works for you to discuss your investment loan options and how we can help you achieve your property investment goals.
