Things to consider when buying your second property

You’ve purchased your first home. Congratulations! If you’ve been there for a while, you may be building up equity, which can put you in a good position to consider a second property.

So, what’s equity and how can it help you buy a second property?

The equity in your home is the value of your home minus the debt you owe. So, if your home is worth $400,000 and you owe $250,000, your equity is $150,000. If you are eligible for a second loan, you may be able to use up to 80% of this equity as a deposit towards your second property. This means that you don’t actually have to save for another deposit.

But before you take the plunge, there are a few things you should consider.

Know why you want a second property

Before you make an offer on a second home, be sure you know why you want a second property.

If you are purchasing as an investment, consider all the hidden costs, and long term costs associated with owning a second house, such as maintenance. Research rental returns, and perhaps consider renting out your existing home, and moving into your new home.

If you are purchasing a holiday house, you need to be sure you have the capital to support the purchase. Talk to your tax accountant about options for renting out the property as a holiday rental, when you aren’t using it.

Having a clear understanding of your goals will help direct decisions such as where to buy, how much to spend, and the type of property you are looking for.

Research and plan

A smart investor has a plan. A good plan involves research. Consider rental returns. These will fluctuate, so if you’ve been a homeowner for some time, talk to your local real estate agent about the demand for rental properties, and rental prices in your area.

It’s also worth looking at the rise and fall in property prices. There’s been a drop in the last year, in some areas, such as Sydney and Melbourne. This could be the time to take advantage of lower prices. The historically low interest rates may also entice you to consider making a purchase sometime soon.

If you are planning to do up a property to sell, consider the fluctuating market, as well as costs associated with renovating, and buying and selling. While it may initially seem like a no-brainer to add $100,000 in value to a second property, if it costs you $80,000 to renovate, and another $20,000 in buying and selling fees, the investment may not be worth your while financially.

Talk to your tax accountant about how purchasing and renting out a second property will affect your tax.

Can you afford a second property?

When you purchase your first property, you need a deposit. When you purchase a second property, you may be able to leverage your equity, which means you don’t need to save another deposit.

It’s important to that linking both securities to the same loan would mean both properties are at risk, if you default on the mortgage. You can discuss the ins and outs with your Smartline Adviser.

Don’t forget to calculate purchasing costs, like stamp duty, and conveyancing. You should also ensure you have a comfortable buffer zone, in case you hit a tricky patch. You need to be able to afford both mortgages, if your second property is unrented for any length of time, or if you run into unexpected maintenance costs.

The good news is your New Vision Financial Services Adviser can help guide you through the process of purchasing your second property. Book a chat with your Adviser about your options today on  1300 422 506.


Managing Director – New Vision Financial Services & New Vision Real Estate After years in the banking, finance & commercial sector Chris noticed that the industry needed a company with a personal touch that offered their customers a complete solution. In 2015 New Vision Financial Services was created to allow our consultants to use their experience (including approving and structuring large complex commercial transactions through to basic home loans) and to concentrate on offering a personalised service to their clients. With the growth and success of New Vision Financial Services a decision was made in 2019 to launch New Vision Real Estate to provide an end to end solution for client weather they be first home buyers or seasoned investors. Chris has built a team at New Vision Financial Services and New Vision Real Estate that have access to over 70 different lenders, insurers, lawyers, accountants and financial planners giving you more flexibility when making a decision. We offer a full service Real Estate agency offering Sales, Leasing, New Developments, House & Land and Commercial. Call me anytime on 0433 181 544 or email The team at New Vision Financial Services have access to over 70 different lenders, giving you more flexibility when making a decision. Our consultants have had extensive experience within the banking, financial and corporate sector. At New Vision Financial Services we specialise in finance lending for home, investment, business, commercial, asset, debtor and many other requirements. As New Vision Financial Services has progressed, we have developed strong relationships with professional service providers such as; Financial Planners, Accountants, Settlement Agents, Leasing & Equipment Providers, Debt Management Specialists and any more to allow our clients access to a complete suite of services.

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