This client was a high school teacher in Prospect earning $105,000 per year. She owned her home outright in the sense that she had significant equity - her property was valued at $680,000 with a remaining mortgage of $310,000. She had been thinking about buying an investment property for years but assumed she needed a separate cash deposit and was not sure a single income would be enough.
The main challenge was structuring the loan correctly on a single income. Most first-time investors make the mistake of cross-collateralising their properties - using one loan secured against both the home and the investment. This gives the bank more control and makes it harder to sell or restructure later.
Additionally, servicing two mortgages on $105,000 required careful loan structuring to ensure the repayments were manageable and the investment was cash-flow positive from day one.
Standalone security means each property secures only its own loan. This protects you if property values change and gives you flexibility to sell or refinance one property without affecting the other. Lendology structures every investment loan this way.
Jason accessed the available equity in her existing home to fund the 20% deposit on the investment property. With $680,000 in property value and $310,000 owing, she had $370,000 in equity. Borrowing up to 80% of the home's value ($544,000) meant she could release $234,000 - more than enough for the 20% deposit ($104,000) plus costs on a $520,000 investment in Elizabeth.
Jason structured the investment loan as interest-only for five years to maximise cash flow. At 5.2% rental yield, the property was generating $520 per week in rent, which covered the interest-only repayments and left a small surplus after property management and insurance costs.
The client purchased a three-bedroom house in Elizabeth for $520,000 with a 20% deposit funded entirely from equity. The property was tenanted within two weeks of settlement at $520 per week. With interest-only repayments on the investment loan, the property was cash-flow positive from month one.
The standalone security structure means her home is protected, and she has full flexibility to sell or refinance the investment independently. She did not need to save a separate cash deposit - her existing equity did the heavy lifting.
I had been telling myself for years that I could not afford an investment property on a teacher's salary. Jason showed me the equity was already there - I just needed the right structure. The whole thing was so much simpler than I expected.
Book a chat with Jason or Steve. We will assess your situation honestly and tell you exactly what is possible.