Investment Loans


Buying a home at auction can cut your purchase price dramatically. But many beginners fail to realize how these auctions work. To maximize your chance of success, you need to understand the auction process.

The Auction Process

Always do your research before the auction. Know what the house is worth in good condition, know what it needs, and figure out your budget before you start. Above all, do not get swept up in the excitement of the moment. Keep a cool head and stick to your plan.

Pest and building inspections should always be carried out before the auction. The inspection will expose any structural issues or other problems that will affect the value of the house. Surprises are common after a property auction. Avoid them with an inspection.

If you’re the high bidder, you’ll need to put down a deposit immediately after the auction. Unless you’ve negotiated otherwise, this is typically 10 percent of the purchase price. You can eliminate any problems during this phase by getting pre-approved for a mortgage. (A mortgage consultant can help you with the pre-approval process.) Also remember to bring a picture ID and register with the auction when you arrive.

Once they begin, property auctions move quickly. They can be intimidating. Consider legally appointing someone to bid for you if you’re not comfortable with the pressure and bidding practices.

Key Tips for Buying At Auction

Auctions can be overwhelming for first-time buyers, but these tips can improve your chance of success:
• Study the market values in the area surrounding the property. Knowing current prices in the neighbourhood could keep you from overpaying, or it could reveal a hidden gem.
• Stay calm and stick to a pre-agreed bidding limit. You’ll avoid bidding too high, and you’ll appear calm and confident before other bidders.
• Attend a few auctions before you bid on a property. Familiarise yourself with the atmosphere and process so you’re comfortable when it comes time to bid.
• Enlist the support of your family and friends on auction day to keep you calm and focussed.
• Even if you don’t win your property, stay positive – there are plenty more opportunities out there.
• Talk to a mortgage consultant beforehand. They know a lot about home valuations and the buying process.



Investment properties can provide a road to early retirement. Here’s a fairly typical scenario:

A married couple begins investing in rental properties in their late 30’s. Each home they rent brings in $500 to $700 in net profit per month. By the time the couple hits 45, they own several properties which earn close to $3,000 per month after expenses. Rather than spending this money, they reinvest it in other types of low- and high-yield investments. The combined property and investment income virtually ensure that they can retire completely before the age of 55.
The above scenario sounds ideal, but there are risks involved. You can avoid most of them by asking yourself three fundamental questions:

1. If something goes wrong with the property, will I have the money to fix it?

Even after a careful inspection, you might discover problems. A roof leak could cost thousands of dollars to repair. Make sure you have the extra money to cover unexpected costs.

2. Will I be able to find good tenants?

Making money on a rental property depends on finding tenants who pay their rent each month and don’t damage the property. Don’t assume that you’ll always be able to find them. Keep enough cash on hand to deal with tenant issues and to cover the mortgage if the home has to sit empty for several months.

3. How important is it to balance rental income against capital growth?

Sooner or later, you’ll probably want to sell your rental property and re-invest the gains. While beginner investors tend to think only in terms of rental income, more experienced investors consider the appreciation of the home over the long-term. Buying a lesser house in an area where demand is high could actually earn you more.

Live the Dream, Not the Nightmare

Smart real estate investments can put you on the road to early retirement and a great life. But hasty investments can turn the dream into a nightmare. Balance the risks of investing against the rewards, and be sure to follow the three tips above before making your first property investment. To learn more, take a look at our guide to property investment.



No-Deposit Investment Loans

Yes, but it isn’t as easy as it used to be. A family pledge loan is usually the best way.
• You don’t need a deposit.
• You can borrow the full purchase price and costs.
• You don’t need to pay an LMI premium.
• You can qualify for exceptional interest rate discounts.
• You can buy property on your schedule, to capitalize on market conditions
With a family pledge loan, the bank accepts a limited guarantee from your parents or relatives, which is secured by a property they own. Given this additional security, most banks are usually happy to lend the full amount.
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