Investing in a property can be a great way to boost your investment portfolio and make your money work harder for you. Our lending experts can talk to you about your investment needs and find the right home loan for you. Don't forget that like most investments, property prices can go up and down, so make sure you do your research before you make a decision.
Call us 7 days a week on 13 17 18 to talk with our lenders or to make an appointment for a Mobile Banking Manager to visit you. Alternatively click here to locate your nearest branch.
Which investment loan is right for me?
Tips for investing in property
Which investment loan is right for me?
At Bankwest we offer a variety of home loans that can be tailored to your specific requirements. The following Home Loans are popular among investors.
You can also click here to view our full home loan range.
Interest Only Loans
As an investor, you may want to consider taking an Interest Only loan where you only pay back the interest owing (rather than the interest and principal amount) for the agreed term. This will free up some cash to look at other investment opportunities and the interest may also be used as a tax deduction.
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Variable vs Fixed?
Both Variable Loan and Fixed Loans have their pros and cons so it's good to know these before making a decision. You may also want to consider a Split Loan which combines a percentage of both Variable and Fixed. Click here for further information.
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Tips for investing in property
- Negative gearing means your loan repayments, fees, and other costs exceed the rental income from the property. This means that the net loss can be offset against other income you earn, so you will be able to reduce the amount of tax payable on that income.
- Positive gearing, on the other hand, is where the annual rental income received from the property is higher than the annual loan repayments, fees and costs. The benefit here is that you earn extra income, however this is taxable.
- When searching for an investment property, think less about your personal lifestyle preferences (as you won't be living in the house) and more about capital growth potential.
- One way to determine capital growth potential is to look in suburbs where the demand is higher than supply. Generally, more auctions are held in these areas so it's a good idea to attend a few and get an idea of how much people are willing to pay.
- Also look at median price increases between suburbs to determine which ones have the most growth potential. Compare these increases to the market as a whole.
- As an investor, you are also entitled to tax benefits. But you should remember that capital gains tax will apply to the property when sold.
- Although you won't be living in the house consider amenities close by (cafes, transport, shops) which will make it a more attractive rental. Also think about what sort of tenants you want to attract when choosing the location and property type. For example, if you want to attract a family you might consider schools, playgrounds and how safe the area generally is.
- If you choose to rent out the property, you will need to decide whether to use a property manager or handle the process yourself. Click here for further information.
- You may also want to consider Landlord Insurance. This covers you from financial losses connected with the property which you rent out. Common features of a Landlord Insurance policy include:
1. Malicious or intentional damage to the property by the tenant or their guests.
2. Theft by the tenant or their guests.
3. Loss of rent if the tenant defaults on their payments.
4. Liability, including for a claim against you by the tenant, and
5. Legal expenses incurred in taking action against a tenant.
Bankwest can arrange Landlord Insurance for you through our partner Vero Insurance Ltd.
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Frequently Asked Questions
How much can I borrow?
That all depends on your circumstances. These can include family income and expenditure, credit history, assets, liabilities and the cost of the home you are looking to buy. Find out how much you can borrow using this online calculator.
How much Deposit do I need?
As a general rule you need a 10% deposit. However, in some circumstances you may be able to borrow up to 95% but some conditions apply. Your Bankwest consultant can provide more information for you with regard to deposits. If you have equity in another property you may use this in place of a cash deposit. New customers may borrow up to 90% of the property value. Existing Bankwest home loan customers with good conduct may borrow up to 95% of the property value (conditions apply).
Can I get Pre-approval?
Yes. In most cases we can pre-approve your home loan so you know exactly what you can afford.
Can I purchase land only?
You can take out finance for a block of land, or for the block and a house.
What are the costs in buying a home?
Click here for a list of associated costs.
Managing your Mortgage
Once you have secured your home loan, there are additional ways you can save yourself thousands of dollars.
Click here for some hints from our experts.
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