I

Index

Is property for me?...... 1

A HANDY How much could I borrow?...... 2

Where should I buy?...... 3

What sort of home loan should I get?...... 4

TO PROPERTY What is negative gearing?...... 5

INVESTMENT What is positive gearing?...... 6

What’s Capital Gains ?...... 7

Do I need a managing agent?...... 8

I’m interested in applying for a home loan. Who should I talk to?...... 9

Everyday Banking | Savings | Home Loans Is How much could I investment borrow? for me?

No matter why you want to invest in property – Our handy online ‘Borrowing Power Calculator’ at wealth creation, capital growth, taking advantage ingdirect.com.au/homeloans (click on ‘Calculators’) of tax concessions – there are a few things to is a great place to start. It works out how much you consider before you commit. Such as: could borrow based on how much you earn and what other financial commitments you have. Performance over time How much the property will cost over the time you If you already have a loan amount in mind, you can own it versus how much you could earn from renting apply for an Indicative Pre-Approval at our website. and/or selling it. It only takes two minutes to apply and is valid for three months. Vacancy rates How often you will – or won’t – have tenants.

Rental returns What you can realistically expect for the size, condition and location of your property.

1 2 Where What sort of should I bu ? homesho loanuld I get?

The location of your investment property can affect To choose the right type of home loan, think about your rental returns and the property’s long-term what’s important to you: value, so it’s smart to research what a suburb or area • The security of repayments that stay the same has to offer. Look at things like: (fixed repayments) • Public transport • Being able to pay off your loan faster by making • Proximity to jobs and schools additional payments (variable repayments) • Parks, shops and recreational facilities • The flexibility of having both (fixed and variable • Noise, neighbours and other potential irritants repayments) • The recent, current and potential future growth • The freedom to access your available redraw for of the area those unplanned expenses, like a burst water pipe • The ability to have a 100% offset You can find out a lot of this information – even account comprehensive suburb profiles – from various • Low fees companies online.

3 4 What is What is ne ativegearing? positivegearing?

If your investment property expenses (interest on Positive gearing is where the income from your your loan, council rates, management fees etc) are investment property is greater than the expenses. higher than the rental income you get from it, you This excess amount may be added to your need to make up the difference from other income. assessable income and increase your tax liability. You may be able to offset that shortfall, or difference, Your personal circumstances and other factors will against other assessable income. This is called influence whether positive gearing is suitable for negative gearing. you. It’s best to speak with your tax or financial adviser to obtain advice on investing in property.

5 6 What’s Do I need Capital a managing Gains tax? agent?

Capital Gains Tax (CGT) may apply to any capital Managing a property can be time-consuming gains you make when you sell or dispose of your and inconvenient. If you’re time-poor or busy, investment property. a managing agent could be a good idea. But before you decide there are a few things that you may CGT is assessed as part of your income tax and want to consider: is taxed at your marginal tax rate. However you may be entitled to a discount if you held the • A managing agent will usually take care of property for more than 12 months. advertising for tenants, the lease, rent collection, building maintenance and inspections • Agents generally charge around 6-7% of the rent you receive from tenants, which adds to the overall cost of owning your property

These costs may be tax deductible – check with your tax adviser.

7 8 I’m interested in applying for a home loan. Who should I to?

An ING DIRECT Home Loan Specialist. They can answer questions you have, and if you proceed with an ING DIRECT home loan, your Home Loan Specialist will be your single point of contact from application to settlement. Call 1800 100 258 between 8am-8pm Monday-Friday and 9am-5pm Saturday (EST). Or if you need some financial advice, why not Everyday Banking | Savings | Home Loans call your Financial Adviser? Important information: Information in this Guide is current as at 14/07/11 and is subject to change. This Guide is intended to provide general information of an educational nature only and does not constitute tax or financial advice. Any information contained in this guide does not have regard to the investment objectives, financial situation or needs of the reader. It is not intended to provide financial advice and the information cannot be relied upon as such. ING DIRECT recommends you seek independent taxation or financial advice where appropriate. All applications for credit are subject to ING DIRECT’s credit approval criteria. Fees and charges apply. Details of these and the terms and conditions are available at 9 ingdirect.com.au or by calling 133 464. ING DIRECT is a division of ING Bank () Limited ABN 24 000 893 292. ING DIRECT’s colour orange is a trade mark of ING DIRECT and the ING Group of companies.