Investment Loans for Painters: Property Goals That Pay

If you're a painter earning solid money and ready to put your cash to work, an investment loan lets you buy a rental property and start building wealth through someone else paying down your mortgage.

Painters have an advantage most don't talk about. You understand property better than the average punter. You've worked in enough homes to know what holds value, what costs a fortune to maintain, and what tenants will actually want to rent. That knowledge matters when you're picking an investment property that'll generate rental income without becoming a money pit.

What an Investment Loan Actually Does

An investment loan is finance for buying a property you'll rent out rather than live in. The rental income covers most or all of your mortgage repayments, while you claim tax deductions on the interest, property management fees, maintenance, and other claimable expenses. Over time, the tenant pays down your loan while the property value grows.

Lenders treat these differently to owner-occupied home loans. They assess your borrowing capacity based on rental income, but they typically only count 80% of the expected rent to account for vacancy periods and maintenance costs. Your income as a painter still matters, but the property needs to stack up on its own numbers.

Interest Only Loans Cut Your Monthly Outgoings

Most property investors start with interest only repayments for the first five years. You're only paying the interest each month, not reducing the loan amount. Your repayments might be $2,400 a month instead of $3,100 on principal and interest for the same loan.

Consider a painter who bought a unit in Campbelltown for $520,000 with a 15% deposit. On interest only, the repayments were $2,350 a month at current variable rates. The unit rented for $520 a week, which covered the mortgage and left a small buffer for body corporate fees and property management. If he'd gone principal and interest from day one, he'd have been tipping in an extra $600 a month from his own pocket. Instead, the property was close to neutral from the start.

Interest only loans suit painters who want to buy another investment property in a few years. You're not locking capital into the first property when you could use that cash flow to build a second deposit.

Variable or Fixed Rate for Investment Property

Variable rates give you flexibility. You can make extra repayments when work's busy, refinance without penalty, or access features like offset accounts. Fixed rates lock in your repayments for one to five years, which helps with budgeting but costs you if rates drop or you need to sell early.

Most painters we work with split their loan. Half variable, half fixed. You get stability on part of the loan and flexibility on the rest. If rates climb, you're partially protected. If they fall, you're not locked out of the benefit entirely.

Investment property rates typically sit 0.3% to 0.5% higher than owner-occupied rates at the same lender. That's the pricing difference for rental properties across the board.

Deposit Size and Lenders Mortgage Insurance

You need at least a 10% deposit plus stamp duty and other upfront costs. If you're putting down less than 20%, you'll pay Lenders Mortgage Insurance. LMI can add $15,000 to $25,000 to your loan amount on a $500,000 property with a 10% deposit.

Some tradies skip LMI by using equity release from their existing home. If you've owned your place for a few years and it's gone up in value, you can borrow against that equity for your investment deposit. You're not paying LMI, and you're not draining your savings account. The downside is higher total debt across both properties, so your borrowing capacity takes a hit if you want a third property later.

Loan to value ratio matters when you're planning portfolio growth. Lenders will look at your total debt across all properties, not just the one you're applying for. Keeping each property under 80% LVR gives you room to move.

Negative Gearing Cuts Your Tax Bill

Negative gearing means your rental income is less than your total property costs, so you're making a loss on paper. That loss reduces your taxable income, which means you pay less tax. If you're earning $95,000 as a painter and your investment property loses $8,000 a year after all expenses, your taxable income drops to $87,000.

You're not chasing a loss for the sake of it. The goal is capital growth. The property value increases while the tax deduction softens the short-term cost. In ten years, a property that cost you $3,000 a year out of pocket might be worth $150,000 more than you paid.

Buying your first investment property works when the numbers make sense for your income level and the area you're buying in. Regional areas with high rental yields might be positively geared from day one, but capital growth can be slower. Inner suburbs might cost you more each month but deliver stronger long-term returns.

Calculating What You Can Borrow

Lenders assess your borrowing capacity based on your income, existing debts, and the rental income from the investment property. They'll apply a buffer to your interest rate and test whether you can still afford the loan if rates climb. For painters, showing consistent income matters. If you're self-employed, lenders want two years of tax returns showing steady earnings.

Rental income gets counted at 80% of market rent, not the full amount. If the property should rent for $500 a week, the lender uses $400 in their calculations. That's to cover vacancy periods and unexpected repairs. If you've already got a tenant locked in before settlement, some lenders will use the actual lease amount instead of their estimate.

Your other debts shrink what you can borrow. Car loans, credit cards, personal loans all reduce your capacity. Paying off a $15,000 car loan before applying for an investment loan can increase your borrowing power by $80,000 or more depending on your income.

Refinancing to Access Better Investment Loan Options

If you bought your investment property a few years back, investment loan refinancing can reduce your interest rate or switch your loan structure. Rates have moved around enough that a loan from three years ago might be costing you more than it should.

Refinancing also lets you pull equity out of the investment property if it's increased in value. That equity can fund renovations, cover a deposit on a second property, or reduce high-interest debt. The process takes four to six weeks and requires a new valuation, but the savings can be worth it.

Some painters refinance to switch from interest only back to principal and interest once their cash flow improves. You're building equity faster and reducing your total interest cost over the life of the loan.

Call one of our team or book an appointment at a time that works for you. We work with painters every week who are building rental income and long-term wealth through investment property. We'll walk through your numbers, show you what you can borrow, and connect you with investment loan options from lenders across Australia who understand tradie income.

Frequently Asked Questions