A rental property is typically a home that you buy to rent out. Many people choose to rent out different types of properties, such as apartments, townhouses, terraced houses, and freestanding houses. A rental property can bring you additional income and help you build your property portfolio. It also has the potential to increase in value (historically property prices have climbed over long periods of time) and return additional money.

Freestanding Houses – These are “standalone” houses. In the current market, freestanding houses in major cities are relatively expensive, and a lot of people have been looking at buying freestanding houses in other smaller towns or centres.

Townhouses – Townhouses, sometimes used interchangeably with terraced houses, can refer to properties that are semi-attached or attached to others. A townhouse typically has access from the ground floor, however there are different interpretations of the word. Townhouses seem to balance the attractiveness of a ground floor house with the cost advantages of an apartment. It may be possible to get townhouses at affordable prices in CBD-style districts in certain towns or cities, as well as in city fringe areas. They are also better received by tenants due to the fact that they usually have ground floor access

Apartments – An apartment usually refers to a dwelling where you own one level of it. Apartments can range in the number of storeys they have from as few as 3 up to 10, 20, or even more. Although apartments are typically smaller than freestanding houses, they often represent a chance to buy in a highly sought after location. Many people own apartments as rental properties in busy central business districts because they believe there will be high demand from businesspeople and students who find the proximity of the property to their workplace or school advantageous.

There are also other types of rental properties, or variants. These can include, but are not limited to: other types of dwellings, studios, flats, boarding houses, and so forth.

If you already own a home, it may be possible for you to buy a new rental/investment property without having to put down an extra cash deposit. This can be done by leveraging your existing home’s equity in order to secure a large loan on the new property. For example, if more than half of your mortgage has been paid off, you may be able to buy an investment property.

A lender or bank is likely to also consider your income and expenditures. For example, if they deem your income not enough to sustain a rental property, even though the rental income may match or exceed the mortgage payment, you could be rejected. Therefore it’s worth talking to a financial adviser about how this, and other factors and considerations, work.

It is possible that a 10-15% deposit is acceptable for an investment property if it is newly built. In other cases, you may need a 30% deposit. For this reason, many people are considering buying a newly built property due to the lower deposit requirement.

In the case that you already own property, you may not need a ‘cash deposit’ – it is possible to leverage, or transfer, the equity from your existing property.

Yes, this may be possible.