Investment Properties | Mortgage Broker in Coolum, Yandina, and Nambour
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Are investment properties worth it? How do they work?
Investment properties are bought for the primary reason of accumulating income via rent and/or appreciation of value. Investment properties are typically viewed as a stable investment strategy, unlike investing in digital currencies or the stock market. The primary reason for this perspective is that properties are a physical asset; they are less likely to be wiped away/lose value unexpectedly.
One of the major upsides to investment properties is that they are less volatile than other investment strategies. Income on investment properties is well known, such as rent, and tends to appreciate more predictably.
However, investment properties aren’t immune to risk. Changes in the property market, unexpected repairs, and issues with surrounding areas can cause properties to depreciate. Alongside this, rent is not always able to cover the full cost of a mortgage repayment.
Curious as to how an investment property may be the right move for you? Get in touch with Coolum and the Sunshine Coast's expert mortgage broker, Michael Smith, today.
Fixed vs variable interest rates
When choosing an investment loan, you will be faced with the choice between going for loans with fixed interest rates or loans with variable interest rates. Both interest rate options offer different benefits and pitfalls, so choosing the right one requires an intimate understanding of your goals and financial situation.
Fixed rates offer stability, allowing you to budget in a much easier fashion. Fixed-rate loans usually come at a slightly higher rate than variable interest loans; however do come with the potential for more unique loan features. What fixed-rate loans offer in stability, they lack in flexibility.
Variable interest rates are unique in that their interest rates are typically lower than fixed-rate loans. However, it’s important to understand that should official interest rates rise, so will your variable interest rate. Should official interest rates lower, however, so will your variable interest rate. This can make variable interest rates tricky to navigate when trying to budget, as the highs and lows of your rate can fluctuate dramatically. With that in mind, variable interest rate loans offer more flexibility than fixed interest rate loans.
By getting in touch with your local mortgage broker, Michael Smith, you can discover which interest structure is best suited for your goals and learn more about how to utilise your loan to its fullest potential.
Investors guide
If you’re wanting to learn more about investment properties and how they can benefit you, check out our handy investors' guide.
Michael is experienced in all areas of the property market, and can assist with navigating:
