As a dental hygienist, you've worked hard to establish a stable career in healthcare. Now you're considering diversifying your income through property investment. Understanding investment loan options and developing a solid property investment strategy can help you achieve your financial goals.
Understanding Investment Loans and Property Investment Goals
Buying an investment property represents one of the most popular wealth-building strategies in Australia. Whether you're purchasing a town house, apartment, or stand alone dwelling, the right investment loan can make your property investment goals achievable.
When you invest in real estate, you're essentially buying a rental property that generates income while potentially appreciating in value. This dual benefit makes property investment particularly attractive for healthcare professionals like dental hygienists who seek long-term financial security.
Types of Investment Properties to Consider
Your first investment property choice depends on your budget, location preferences, and rental yield expectations. Consider these options:
• Apartments: Often require lower loan amounts and may offer strong rental demand in urban areas
• Town houses: Provide a balance between affordability and space, appealing to family tenants
• Stand alone dwellings: Typically offer higher rental yields but require larger initial investments
Research property markets thoroughly before making your decision. Each property type comes with different maintenance requirements, tenant demographics, and potential returns.
Investment Loan Features and Interest Rates
When applying for an investment loan, you'll encounter various loan features designed specifically for property investors. Most lenders offer both variable interest rate and fixed interest rate options for rental property loans.
Variable Interest Rates: These fluctuate with market conditions, potentially offering interest rate discounts during certain periods.
Fixed Interest Rates: Provide certainty for calculating investment loan repayments over a set period.
Your Investment Loan Interest Rate will typically be higher than owner-occupier rates, reflecting the additional risk lenders associate with investment properties.
Ready to get started?
Book a chat with a Finance & Mortgage Brokers at Home Loans for Dentists today.
Understanding Loan to Value Ratio and Lenders Mortgage Insurance
The loan to value ratio (LVR) represents the percentage of the property's value you're borrowing. Most lenders require a maximum LVR of 80% for investment properties to avoid lenders mortgage insurance (LMI).
If your LVR exceeds 80%, you'll need to pay LMI, which protects the lender if you default on your loan. While this increases your upfront costs, it may still allow you to enter the property market sooner.
The Investment Loan Application Process
The application process for investment loans requires thorough documentation of your financial position. Lenders will assess your borrowing capacity based on:
• Your employment income and job stability
• Bank statements showing your spending patterns and savings ability
• Existing debts and financial commitments
• The expected rental income from your investment property
Many brokers now offer a streamlined application process, helping you access investment loan options from banks and lenders across Australia without approaching each institution individually.
Building Your Investment Property Portfolio
Once you've successfully purchased your first investment property, you might consider expanding your investment property portfolio. This strategy can accelerate wealth building but requires careful planning and strong cash flow management.
Each additional property investment should align with your overall property investment strategy. Consider factors like:
• Geographic diversification across different property markets
• Mix of property types to spread risk
• Rental yield potential in various locations
• Your capacity to service multiple investment loan repayments
Tax Considerations: Negative Gearing and Deductions
Negative gearing occurs when your rental property expenses exceed the rental income. While this creates a tax deduction, ensure you can afford the ongoing cash flow shortfall.
Property investment expenses you can typically claim include:
• Interest on your investment loan
• Property management fees
• Maintenance and repair costs
• Stamp duty (depreciated over time)
• Insurance premiums
Consult with a qualified accountant to optimise your tax position and ensure compliance with Australian taxation laws.
Choosing the Right Lender and Loan Features
Different lenders offer varying investment loan options with distinct features and benefits. Some focus on competitive interest rates, while others provide flexible repayment options or specialised services for healthcare professionals.
Key features to compare include:
• Interest rate and ongoing fees
• Offset account availability
• Redraw facilities
• Split loan options between fixed and variable rates
• Professional package discounts
As a dental hygienist, you may qualify for professional packages that offer interest rate discounts and reduced fees.
Property investment can provide an excellent pathway to financial independence for dental hygienists. With careful planning, appropriate financing, and professional guidance, buying a rental property can complement your healthcare career and build long-term wealth.
Call one of our team or book an appointment at a time that works for you to discuss your investment loan options and develop a property investment strategy tailored to your professional circumstances.
