10 Ways to Get Your Investment Loan Approved as a Painter

As a painter, you're already skilled at transforming spaces and adding value to properties. But have you thought about using those same principles to build wealth through property investment? Getting investment loan approval can seem challenging when you're in the trades, but with the right approach, you can secure the investment property finance you need to grow your portfolio and create passive income.

Let's dive into the key strategies that will help you get your investment loan application across the line.

1. Understand Your Borrowing Capacity

Before you start looking at investment loan options, you need to know how much you can actually borrow. Lenders assess your income, expenses, existing debts, and financial commitments to determine your borrowing capacity. As a painter, especially if you're self-employed, this means having your financials in order - including tax returns, profit and loss statements, and bank statements from the past two years.

Lenders typically calculate your investment loan amount based on your ability to service the debt, considering both your current home loan (if you have one) and the new investment property loan. They'll also factor in the rental income from your investment property, though they usually only count 80% of the expected rent to account for vacancy rates and maintenance costs.

2. Save a Strong Investor Deposit

While you might have heard about low deposit options for owner-occupied properties, investment loans typically require a higher deposit. Most lenders want to see at least 20% of the property value as your investor deposit to avoid Lenders Mortgage Insurance (LMI). However, if you have equity in your existing home, you might be able to leverage equity instead of saving additional cash.

A larger deposit also improves your loan to value ratio (LVR), which can help you access better investor interest rates and more favourable investment loan features. If you're working towards building your deposit, consider setting aside a percentage of each job specifically for your property investment strategy.

3. Get Your Documentation Ready

Investment loan approval relies heavily on proper documentation. As a painter, you'll need to provide:

• Two years of tax returns and notices of assessment
• Business Activity Statements (BAS) if you're self-employed
• Bank statements showing consistent income
• Details of existing assets and liabilities
• Proof of rental income if you already own investment properties
• ABN and business registration documents

If you're operating through a company or trust structure, you'll need additional documentation showing the business structure and your role within it. Having all these documents organised before you start your investment loan application can speed up the approval process significantly.

4. Choose the Right Loan Structure

Investment loan products come with different features, and choosing the right structure can impact both your approval chances and your long-term financial outcomes. The main decisions you'll face include:

Interest Only vs Principal and Interest

Many property investors prefer interest only investment loans because they maximise tax deductions and improve cash flow. With an interest only loan, you're only paying the interest charges for a set period (usually 5 years), which means lower repayments. This can be particularly useful when you're building your portfolio and want to keep more cash available for additional investments or business expenses.

Variable Rate vs Fixed Rate

A variable interest rate means your repayments can change when interest rates move, while a fixed interest rate locks in your repayments for a set period. Some painters prefer the certainty of knowing their costs upfront with a fixed rate, while others value the flexibility and potential interest rate discounts that come with variable rates.

5. Demonstrate Stable Income

Lenders want to see that you have consistent income to service the investment loan repayments. As a painter, this can sometimes be challenging if your income varies seasonally or project-to-project. To strengthen your application:

• Maintain a healthy pipeline of work and contracts
• Keep detailed records of regular clients and repeat business
• Show bank statements with consistent deposits
• Consider waiting to apply until after you've lodged tax returns showing strong income

If you're self-employed, lenders will typically average your income over two years, so one strong year can help offset a slower period.

6. Factor in All Property Investment Costs

When calculating investment loan repayments, don't forget to account for all the costs associated with buying an investment property. Beyond the property price, you'll need to budget for:

• Stamp duty (which varies by state)
• Legal fees and conveyancing
• Building and pest inspections
• Lenders Mortgage Insurance if your LVR is above 80%
• Ongoing costs like body corporate fees, council rates, and insurance
• Maintenance and repairs (where your painting skills might come in handy!)

Understanding these costs helps you calculate realistic returns and shows lenders you've thought through your property investment strategy carefully.

7. Maximise Your Tax Benefits

One of the significant investment loan benefits is the ability to claim various expenses and maximise tax deductions. As a painter investing in property, you can typically claim:

• Interest charges on your investment loan
• Property management fees
• Maintenance and repairs
• Insurance premiums
• Depreciation on the building and fixtures
• Body corporate fees

Negative gearing benefits occur when your claimable expenses exceed your rental income, creating a tax deduction. While this means a short-term loss, many investors use this strategy while building wealth through property appreciation over time. Speak with an accountant who understands both property investment and trades businesses to structure things optimally.

8. Access Investment Loan Options from Multiple Lenders

Different banks and lenders have varying policies when it comes to lending to painters and other tradies. Some lenders are more comfortable with self-employed borrowers, while others might offer rate discounts for specific professions. At Tradie Home Loans, we can access investment loan options from banks and lenders across Australia, which means we can find investment loan products that suit your specific situation.

This is particularly valuable for painters because:

• Some lenders offer better investor interest rates for established businesses
• Different lenders have different policies on rental income calculations
• Certain lenders are more flexible with documentation requirements
• Competition between lenders can result in better investment loan features

Don't limit yourself to just your current bank - exploring various investment loan options can save you thousands over the life of your loan.

9. Consider Your Long-Term Portfolio Growth Strategy

Lenders want to see that you've thought about your investment beyond just the initial purchase. Having a clear property investment strategy shows you're a serious investor:

• What type of properties are you targeting and why?
• What are the rental yields in your chosen areas?
• How does this property fit into your overall wealth-building plan?
• Do you plan to renovate (using your painting skills) to add value?
• What's your timeline for portfolio growth?

If you're looking at expanding your property portfolio, having a strategy mapped out can help with both your initial investment loan approval and future borrowing.

10. Work with a Mortgage Broker Who Understands Tradies

Painters face unique challenges when applying for investment loans. Your income might look different on paper compared to wage earners, and some lenders don't fully understand how trades businesses operate. Working with a broker who specialises in investment loans for tradies means:

• Your application is presented in the most favourable light
• You access lenders who are comfortable with trades income
• You understand all available investment loan features and benefits
• You can explore options like investment loan refinance down the track
• Your unique circumstances as a painter are properly explained to lenders

Getting investment loan approval is about more than just meeting minimum requirements - it's about positioning yourself as a reliable borrower with a solid plan. As a painter, you understand the value of preparation before starting any job. The same applies to property investment. By following these ten strategies, you'll be well-positioned to secure the investment property finance you need to build wealth and create financial freedom.

Whether you're buying your first investment property or adding to an existing portfolio, having the right finance partner makes all the difference. At Tradie Home Loans, we understand the trades industry and can help you access property investor loan options that work for your situation.

Ready to start building wealth through property? Call one of our team or book an appointment at a time that works for you.