Can I afford an Investment Property?

This is the question most asked by people thinking to invest. So as a rule of thumb, use this as a guide. If you own a home or have a current mortgage on your home, you will need to have 30% equity in that property or more to comfortably use it as for an-other property purchase. Borrowing up to a max of 80% of the two properties value will avoid mortgage insurance in most circumstances and reduce costs. Depending on what you owe to banks, finance companies and credit providers, your borrowing capacity will be assessed using your income, rent to be received from the new investment property and current loan commitments. You will need to be comfortable in investing around $60 to $100 per week to meet all commitments relating to the purchase of the investment property. All other costs will be met by the tenants rent and tax benefits relating to the property. If you are renting or simply don’t want to use your existing property as security, you will need $35,000 -$40,000 in the bank to comfortably purchase a new Investment Property.