First Time Property Investors - Part 1: Navigating Finance

Welcome back to another episode of Talk Property to Me! In this episode, my co-host Aaron Downey and I dive into the world of first-time property investors in Australia, focusing specifically on the finance aspect. This episode is part one of a two-part series, with the next episode delving into the property side of things.

We kick off the episode by discussing the crucial question of how much deposit is needed for first-time property investors. We explore the concept of lenders mortgage insurance (LMI) and its impact on deposit requirements. We also touch on the option of using a guarantor to increase the deposit amount and avoid LMI.

Moving on, we delve into government schemes available for first-time homebuyers in Australia, particularly in New South Wales. We highlight schemes like the first home loan deposit scheme and stamp duty exemptions, emphasising the eligibility criteria and benefits for first-time buyers.

Next, we shift our focus to understanding how banks assess borrowing capacity for potential property investors. We break down the calculation process, including net income, living expenses, and loan repayments. We stress the importance of managing existing debts like credit cards to improve borrowing capacity.

In a thought-provoking segment, we discuss the strategy of rent vesting for individuals who cannot afford to buy property in their desired location. We explore the concept of investing in more affordable markets while renting in a preferred area, highlighting the potential benefits and considerations for this strategy.

Wrapping up the episode, we touch on the significance of financial discipline and strategic planning for aspiring property investors. We emphasise the need to assess individual financial situations, explore alternative options, and make informed decisions to achieve property ownership goals.

Join us next week for part two of our series, where we will delve into the property side of first-time property investment in Australia. Stay tuned for more insights, tips, and advice on navigating the property market as a first-time investor.

Thank you for tuning in to Talk Property to Me! Remember to connect with us on our social media platforms and reach out with any questions or topics you'd like us to cover in future episodes. See you next time!

00:00:02 - Introduction to Finance Tips for First Time Property Investors

00:02:12 - Explanation of Lenders Mortgage Insurance (LMI)

00:03:29 - Tips for Saving a Deposit

00:08:55 - Overview of Government Schemes for First Home Buyers

00:11:30 - How Banks Assess Borrowing Capacity

00:16:13 - Impact of Credit Cards on Borrowing Capacity

00:18:49 - Considerations Before Buying Property When Planning for Kids

00:21:47 - Introduction to Rent Vesting Strategy

00:25:25 - Conclusion and Preview of Part Two

ABOUT THE HOST

BRAD EAST

Brad East is the Managing Director of Wisebuy Home Loans. Brad is an award-winning mortgage broker and has helped thousands of clients gain finance to purchase properties. Wisebuy Home Loans is the go-to mortgage brokerage for clients wanting out-of-the-box applications approved.

Website → https://wisebuygroup.com.au 

LinkedIn → https://www.linkedin.com/in/newcastlemortgagebroker/ 

Instagram → https://www.instagram.com/bradeast_mortgagebroker/ 

Facebook → https://www.facebook.com/bradeastofficial