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- 36 Marine Parade, Southport QLD 4215
- 36 Marine Parade, Southport QLD 4215
- 0414 646 513
- Free Of Charge Service!
- Free Of Charge Service!
For first home buyers in Queensland, the biggest hurdle isn’t finding the dream home, it’s acquiring a loan big enough to buy it. With property prices at record continuing to rise throughout the state, borrowing capacity has never been more important.
Until recently, first home buyers in QLD were restricted from renting out their property or rooms if they accessed the First Home Owner Grant. That’s now changed as of September 2024.
Now, you can rent out a room or part of your property without losing eligibility for the First Home Owner Grant or transfer duty concession, as long as you still reside in the home and use it as your principal place of residence.
This is a game-changer for First home buyers. It not only helps first home buyers borrowing power when applying for a loan but it also helps them afford the home with extra income to pay off the mortgage.
Your borrowing capacity is the maximum amount a lender will allow you to borrow. It determines where you can buy and the type of property you can afford.
Lenders will assess the following:
There are a few more things to consider when it comes to your borrowing power. Each person or couple’s borrowing power will look different and it is always a case by case scenario so it’s best to speak to experts like us to find out exactly what you may be able to afford.
As a first home buyer, you can demonstrate to the bank that part of your income will come from renting out sections (rooms or spaces) of your new property. Here are the main ways you can leverage rental income in Queensland:
Not all lenders see rental income the same way so here are a few points to keep in mind:
Most banks only consider 70–80% of projected rental income to allow for other expenses such as potential vacancies, management fees, and maintenance.
Proof or rental income will usually be required by lenders. This can include a signed lease (or room lease), a rental appraisal, or bank statements.
It’s good to keep in mind that some lenders are stricter than others so ‘shopping’ around can make a big difference.
Property Acquire has access to up to 60 lenders, this means that with our help, we will find the right lender for you and your circumstances in order to optimise your borrowing capacity and chances of getting into the market.
Let’s break down how renting a room can boost borrowing power.
Jess is a first home buyer earning $75,000 a year. On her salary alone, her borrowing capacity would usually sit at around $480,000 to $500,000, depending on the lender and her day-to-day expenses. At that level, her options are fairly limited – mostly smaller units or entry-level townhouses.
But Jess is open to the idea of renting out a spare bedroom in her home. She finds that she could reasonably charge about $200 a week for a room. Because banks typically only count 70–75% of rental income, her lender assesses this at around $150 a week, or just under $8,000 a year. This lifts her assessable income from $75,000 to close to $83,000.
That extra income might sound modest, but it’s enough to push her borrowing capacity up to around $520,000 to $530,000. Suddenly, instead of being restricted to a small unit, Jess could look at a modern townhouse or even a home in a family-friendly growth suburb!
Remember it’s not ‘when’ you get into the market that counts, it’s how long you are in the market that counts!
Make sure you have done your due diligence. First home buyers need to weigh up a few practical considerations before relying on rental income to boost their borrowing power. Some things to consider are:
For QLD first home buyers, every extra dollar of borrowing capacity matters. Thanks to the 2024 rule change, rental income from dual living, granny flats, or rentvesting can now help you qualify for bigger loans and a better chance to get your foot in the door of the property market.
If you are a first home buyer that is sick of renting and are looking to get into the market sooner, planning around rental income could be the strategy that makes it possible.
At Property Acquire, we’ve helped many first home buyers successfully step into the property market, guiding them through each stage of the process with confidence. Our team understands not only the ins and outs of finance and borrowing power but also the finer details that come with purchasing Home and Land Packages.
Yes. You can generate rental income through granny flats, dual living, room rentals, or rentvesting – even as a first home buyer.
Most lenders count 70–80% of rental income.
No. As long as you live in the property as your principal place of residence, you remain eligible.
Some lenders will consider this income if it’s under a formal lease, but not all do.
Rentvesting means buying your first property as an investment and renting it out, while continuing to rent where you live. You may still qualify for first home buyer incentives later since you haven’t lived in the property.