Do you know which investment property types suit your goals?

When buying an investment property, choosing the right property type is crucial for your long-term success. Each property type offers different advantages, rental yields, and investment loan requirements. Understanding these differences will help you make informed decisions when applying for an investment loan through WealthStreet Mortgage Brokers.

Stand Alone Dwelling Investment Properties

Stand alone dwellings typically offer strong capital growth potential and appeal to families seeking rental properties. These properties often provide:

• Higher borrowing capacity due to land value
• Potential for renovation and value-adding opportunities
• Strong rental demand in established suburbs
• Lower body corporate fees compared to apartments

When researching property options, consider that stand alone dwellings may require higher loan amounts, affecting your loan to value ratio (LVR). Many lenders offer investment loan options with LVRs up to 80% to avoid lenders mortgage insurance (LMI), though some borrowers choose higher LVRs when the property market conditions support this strategy.

Apartment Investment Properties

Apartments can provide excellent rental yields, particularly in inner-city locations like Rosebery. Key considerations include:

• Generally lower purchase prices requiring smaller loan amounts
• Strong rental demand from young professionals and couples
• Potential for higher rental yields in desirable locations
• Lower maintenance responsibilities for investors

The application process for apartment investment loans involves careful assessment of the building's construction quality and body corporate health. Lenders may apply different lending criteria for apartments, particularly those in high-density developments.

Town House Investment Properties

Town houses combine benefits of both apartments and houses, offering a middle ground for property investment strategies:

• Attractive to small families and professionals
• Often include private outdoor space
• Generally lower maintenance than stand alone dwellings
• Strong rental market appeal

When calculating investment loan repayments for town houses, consider both the purchase price and ongoing body corporate fees. These properties often provide solid rental yields while maintaining good capital growth potential.

Investment Loan Features Across Property Types

Regardless of property type, investment property loans offer specific features:

Interest Rate Options:
• Variable interest rate products with potential interest rate discounts
• Fixed interest rate options for budget certainty
• Interest-only repayment periods to maximise cash flow

Loan Structure Benefits:
• Access to negative gearing tax advantages
• Offset accounts to reduce interest costs
• Redraw facilities for portfolio expansion

Your investment loan interest rate may vary based on the property type, with lenders often offering different rates for apartments versus houses. Banks and lenders across Australia provide various investment loan options, each with distinct terms and conditions.

Choosing Your Investment Strategy

Successful property investment requires aligning property type with your financial goals:

1. First investment property buyers should focus on properties with strong rental demand and manageable maintenance requirements
2. Experienced investors building an investment property portfolio might diversify across different property types
3. High-yield seekers may prefer apartments in inner-city locations
4. Growth-focused investors might choose stand alone dwellings in developing suburbs

Preparing Your Investment Loan Application

Regardless of chosen property type, your investment loan application requires:

• Recent bank statements showing savings history
• Income documentation to establish borrowing capacity
• Property research supporting your investment decision
• Understanding of stamp duty costs and other purchase expenses

Lenders assess each property type differently during the application process. Professional mortgage brokers can access investment loan options from banks and lenders across Australia, helping you secure appropriate financing for your chosen property type.

Making Your Property Investment Decision

When buying a rental property, consider location, tenant demand, and your long-term investment goals. Each property type offers unique advantages, and the right choice depends on your financial situation, risk tolerance, and investment timeline.

Whether you're purchasing your first investment property or expanding an existing portfolio, understanding how different property types affect your borrowing capacity and investment returns is essential. Professional guidance ensures you select the most suitable property type and secure appropriate investment loan terms.

Contact WealthStreet Mortgage Brokers to discuss which investment property type aligns with your goals and explore the investment loan options available to Rosebery investors. Call one of our team or book an appointment at a time that works for you.