Property investment is a sure-fire way to build long-term wealth, but you do need to understand property financing. This will ensure you make the right investment choices! As a first-time property investor, you will need to learn the difference between various financing options and how you can leverage financial tools to maximise ROI and minimise risks.
With our IGrow experts on your property investment team, we’ll make sure you are guided through the entire property purchasing process. Our property investment strategists will tailor a financial strategy to meet your specific investment goals.
Coming to terms with property financing
There are several ways you can finance a property investment. Some of the more common options are as follows:
1. Home loans – leveraging Other People’s Money (OPM)
Securing a home loan is one of the more common options. In this way, it is an easy way to secure property financing, particularly if your credit score is good and you have a stable monthly income. If you partner with IGrow, our bond originators will negotiate with major banks and financial institutions to secure the best home loan terms on your behalf.
This is part of a core strategy backed by Jacques Fouché, IGrow CEO & Founder’s philosophies on property investment, and is known as leveraging Other People’s Money (OPM).
“What is leveraging OPM?”
It involves utilizing financial institutions to finance or fund your property purchases, rather than relying solely on your own capital. By using OPM, investors can grow their property portfolio at a faster pace, without depleting their personal financial resources.
This is a very different approach for people used to thinking of loans for private homes, which are not an investment in the true sense, so you want to pay them off much more quickly, and preferably start off with a strong deposit.
When it comes to investing in buy-to-let property, two big things change:
- Your tenant is paying off most of your bond costs, not you.
- The interest portion of your bond repayments is a tax-deductible expense
So while it may look and feel like the same process as buying a home for yourself, it’s another game entirely.
2. Making strategic use of equity in existing property
Strategic property financing can mean making careful use of equity in a property you already own – e.g. your home. Equity is the difference between what your home is worth and what you still owe on it. As property tends to increase in value, this can give you access to more money than you think, as your original bond amount will likely be lower than the current value of the house.
This is a bit like using your home as a kind of bank. You can refinance by taking out a fresh mortgage at the same time as you buy an investment property, to access the capital locked in your original home loan. You may even be able to restructure with a better interest rate, as the interest rates are lower now than they have been for years. Remember, a bond originator like IGrow Home Loans specialises in applying to multiple banks at the same time on your behalf, so that they compete for your business. AND they do this free of charge!
Refinancing carries some risks, and is best entered into with the advice of an expert. Chat to one of our friendly investment strategists if you need to plan ahead.
3. Set-up company and/ or trust structures
Chat to an expert at IGrow Trusts about the right time to set up the correct structures you need to ensure tax efficiency and protection of your assets from various risks. Tax on income earned through property needs to be well-managed in order to get maximum benefits. IGrow Trusts are experts at property investors’ needs.
4. Invest in buy-to-let property
A particularly good property investment strategy is financing a buy-to-let property, where the rental income helps you cover home loan repayments. To agree on the best property financing terms, our bond originators negotiate for you, so that you get competitive interest rates for your home loan structuring.
5. Sourcing alternative financing routes
In the example of an investor who doesn’t qualify for traditional home loans, you can try joint home loans. With these loans, two or more investors split the financial burden. It’s important to note that banks are more likely to allow you to qualify for a joint home loan as “joint home loan co-applicants”. This is due to there being dual/further income streams supporting your joint property purchases. This makes it easier to handle home loan repayments. View our blog post explaining the benefits of joint home loans.
The IGrow Wealth property investment strategists and IGrow Home Loans will be by your side to navigate financing options. We will help you secure the ultimate solution, so your investment goals will be within reach!
How can IGrow help you lock down appropriate and secure financing?
At IGrow, we offer a multifaceted suite of services, led by experts from different companies under the IGrow Group of Companies. We aim to help novice investors secure their property financing journey. To eventually grow their first investment into an expanding property portfolio.
Our team of qualified experts includes the following:
1. Property investment strategists
Our property investment strategists will do an assessment of your finances and investment goals. Then, they will create a tailor-made, personalised plan.
They’ll guide you through:
- Choosing the appropriate property financing option.
- Setting up your property investment, ensuring that it’s tax efficient.
- Identifying high-yield property purchase opportunities.
2. Home Loan Specialists: Bond Originators
Securing a loan can become rather complex, but with IGrow Home Loans on hand working on your behalf, they’ll:
- Compare home loans offered by multiple banks.
- Negotiate the best interest rate deals and terms possible.
- Make sure you secure the highest home loan amount possible.
Our IGrow Home Loan team is adept at securing excellent terms on home loans. We take the hassle out of document submission and negotiations with major banks to finance your home loan.
We have a very handy Bond Repayment calculator. By clicking on the link to our Calculator and filling in the necessary details, your Bond repayment details with IGrow are just a click away! It’s easy to see what you will owe on your property purchase, so you can be prepared!
“Our purpose is to offer the best in every service associated with being a home loan provider. These services cover the full spectrum of home ownership and home financing – from origination and credit approval through to registration and ongoing loan servicing”. – IGrow Home Loans Bond Originators
3. IGrow’s trust set-up team can help protect your property assets
If you manage to grow your property portfolio from one property investment to a multi-property portfolio, our team at IGrow will assist you further. We can help you with the possibility of setting up a trust to secure your property assets.
Our trust specialists will handle the legalities of placing your properties securely within a trust. Your property assets will be protected from risks from creditors and such. This means you won’t be personally liable for financial difficulties or challenges you face with your properties. Your properties are protected by your trust.
IGrow’s trust team can offer you an assessment to ascertain the value of setting up your properties within a trust system.
Key takeaways
Assuming the role of captain of your property finance ship can lead to a bumpy passage. However, if you have the right knowledge and expertise at hand, this will give you a strong advantage. First-time investors can start building a profitable property portfolio. In leveraging strategic property finance and in leveraging Other People’s Money (OPM), you will be able to fast-track your wealth creation journey! At the same time, you will minimise your personal financial burdens or pressures.
IGrow Wealth Investments offers you end-to-end expertise and guidance, beginning with strategic planning, and moving on to home loan applications by IGrow bond originators. From there, after purchasing your property and growing your portfolio, our IGrow Trust specialist team can help you place your properties into a trust structure. This will keep you safe from financial liabilities and risk, on a personal level. Your properties will be seen as “assets”, safeguarded by the IGrow trust facility. Our Property Investment Strategist team will help you structure and diversify your property investment portfolio, for a financially free retirement!
Conclusion
Overall, IGrow team’s mission is to help you secure the best financing solution, for a tax-optimised and safeguarded property portfolio. We aim to help you structure your property portfolio for maximum ROI and the ability to leave a legacy for your loved ones.
Are you ready to dive into the world of property investment? We’ve got you!
Contact an IGrow Property Investment Strategist today and begin building a path to your financial freedom!
