There are different ways to succeed
If you're already paying off your mortgage, you may be in a position to consider property investing. That’s because every payment you make builds up what is known as ‘equity’. The more equity you have in your home, generally the stronger your borrowing potential is. You may even be able to unlock that equity to buy your first investment property.
If you don't own, maybe your parents do? They might not be rich, but if they've paid a big chunk (or all) of their mortgage, perhaps they can help you by using some of their equity. You can read more about equity here.
And plenty of people achieve their property investment goals entirely on their own steam. Maybe you want to jump straight to the investment part while renting in an area you love. This is known as rentvesting. You can read more about this clever tactic here.
You may not need to save up as much as you think
If you decide to opt for an investment property as a first step – rather than buy to live – the pathway may be even shorter.
"If you opt for an investment loan over an owner-occupier home loan, you might be able to factor in potential future earnings from a tenant into your loan application," John says. "That could make property investment easier than buying your own home because of that extra earning potential."
It's also worth speaking to your accountant about a little-known tactic called ‘tax variation’. If you usually get a decent lump sum back from the Australian Tax Office (ATO) at the end of the financial year, you might be able to share this across the financial year instead.
You may be eligible to apply to the ATO to cash it in advance by reducing the amount you pay on your salary in what's known as a variation schedule. That could help you make any investment loan payments. You must apply for this annually with the ATO, and if you choose this option, you can't receive a refund from the ATO of more than $500. If you change jobs, you'll also have to apply for a new variation schedule.
You can read more about tax variation here.
Whatever route you take, John says it makes sense to think about your future now. "We can hold your hand and help you develop a new build property solution strategy that works for you."
Make sure you seek financial advice
While we've tried to be as helpful as possible, this article should not be considered professional financial advice. It contains general information only, and you should seek out independent, professional advice on your personal situation before making any financial decisions.
If you feel ready to start your property investment journey, learn more about Invest by Metricon today. Invest by Metricon offers an end-to-end process that allows you to obtain a rent-ready, premium home in one of Australia’s leading estates, simplifying your investment journey. With new build investment opportunities across Victoria and Queensland, you're sure to find something that suits your investment strategy, no matter where you live.