Working in the FIFO mining industry puts you in a unique position when it comes to property investment. Your consistent income and time away from home can actually work to your advantage when buying an investment property. However, choosing the right property requires careful consideration of several key factors.
Understanding Your Investment Loan Options
Before diving into property selection, it's crucial to understand your investment loan options. Finance & mortgage brokers can help you access investment loan options from banks and lenders across Australia, each offering different features and benefits.
Your borrowing capacity will depend on several factors:
• Your income stability (a major advantage for FIFO workers)
• Existing debts and commitments
• The loan to value ratio (LVR) you're comfortable with
• Whether you'll need lenders mortgage insurance (LMI)
Most lenders offer both variable interest rate and fixed interest rate options for investment property loans. The choice between these will impact your investment loan repayments and overall property investment strategy.
Property Types: What Works for FIFO Investors
When selecting your investment property, you'll typically choose between a stand alone dwelling, town house, or apartment. Each has distinct advantages:
Stand Alone Dwellings
These often provide stronger capital growth potential and appeal to families. They typically offer higher rental yields in regional areas, which might align well with your knowledge of mining regions.
Town Houses
Offering a middle ground between apartments and houses, town houses can provide good rental returns while requiring less maintenance than standalone properties.
Apartments
Usually requiring lower loan amounts and offering rental properties in high-demand urban areas. However, research property market trends carefully, as oversupply can affect rental yields.
Location Strategy for FIFO Workers
Your FIFO schedule means you won't be managing the property day-to-day, making location selection even more critical. Consider these factors:
- Proximity to your home base: Choose locations you can easily access during your time off
- Property management availability: Ensure quality property managers operate in your chosen area
- Rental demand: Research areas with consistent tenant demand and low vacancy rates
- Infrastructure development: Areas with planned infrastructure improvements often see property value growth
Financial Considerations Beyond the Purchase Price
When calculating investment loan repayments, factor in all costs:
• Stamp duty: This varies by state and can significantly impact your initial investment
• Ongoing costs: Property management fees, insurance, rates, and maintenance
• Tax implications: Understanding negative gearing and how it affects your tax situation
• Rental yield calculations: Ensure the property will generate sufficient rental income
Your investment property loan features might include offset accounts or redraw facilities, which can help manage cash flow during your roster cycles.
The Application Process
When applying for an investment loan, lenders will require:
• Recent bank statements
• Proof of employment and income
• Details of existing assets and liabilities
• Information about the property you're purchasing
A streamlined application process through experienced finance & mortgage brokers can save time and potentially secure interest rate discounts that individual applicants might not access.
Building Your Investment Property Portfolio
Many FIFO workers don't stop at their first investment property. Your stable income provides a solid foundation for building an investment property portfolio over time. Each property should complement your overall property investment strategy and financial goals.
Consider how each addition will affect your borrowing capacity for future investments. Some investors focus on cash-flow positive properties, while others prioritise capital growth through negative gearing strategies.
Research Before You Buy
Successful property investment requires thorough research. Analyse:
• Local rental markets and vacancy rates
• Historical property price movements
• Future development plans that might affect supply and demand
• Demographics of potential tenants
Your mining industry knowledge can be valuable here – understanding which regions have long-term mining prospects can inform your investment decisions.
Remember, buying a rental property is a long-term commitment. Choose properties that align with your financial goals and risk tolerance. Consider how your FIFO schedule will affect property management and factor this into your selection criteria.
The combination of your stable income, industry knowledge, and strategic property selection can create a powerful wealth-building strategy. Take time to research property options thoroughly and work with professionals who understand both property investment and the unique circumstances of FIFO workers.
Call one of our team or book an appointment at a time that works for you to discuss your investment property goals and explore loan options tailored to your FIFO lifestyle.
