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New research from Great Southern Bank reveals 48% of property investors belong to ‘mum and dad’ investors who maintain an existing home mortgage, while 14% were rentvestors.
The study of over 2000 Australian’s shows property investors were 10% more confident in managing their current expenses compared to first home buyers, with 44% reporting high levels of residential satisfaction versus 34% of first home buyers. Financial confidence also strongly favours property investors, with 41% feeling on track to meet their financial goals - significantly outpacing both owner-occupiers (29%) and first home buyers (33%).
When it comes to type of dwelling investors showed a strong preference for traditional housing options: 68% choose to invest in houses; 17% opted for apartments and 12% selected townhouses. Almost a fifth [18%] of respondents said they were looking at buying an investment property in the next three years.
A spokesperson for Great Southern Bank noted the average investor at the customer-owned bank has an average age of 45.
“It’s not just a wealth creation strategy for high net worth individuals – rising property values mean mum and dads who may have bought their property some time ago are gaining significant equity, which is likely to further boost their financial confidence.
“With professional guidance and careful planning, these experienced homeowners are aligning property investment to their longer-term financial goals.”
Hamish Crawford, Franchisee of Aussie Stones Corner has helped many mum and dad investors start a property portfolio, stating many customers are often under the impression they need upfront costs, just as they did for an Owner Occupier loan.
“While many know they have equity there, often they don’t realize that this equity can be diversifying their investment strategy, without needing the substantial upfront costs typically associated with property investment.
“We often see some investors saving diligently for a second property in a separate account. However, when we look closer at their situation, they could potentially be better off directing those savings into their existing mortgage. This approach can help reduce interest and repayments while simultaneously building usable equity for property investment.
“Using equity and structuring the loan so the home you live in isn't tied directly to your future income strategy creates a more comfortable position for many.”
Hamish notes there are growing investors who are using this approach to help their children enter the property market in the future - without having to resort to guarantor loans.
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