Futurerent covers investors' rental income up to $100,000

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on November 19, 2021 Fact Checked
Futurerent covers investors' rental income up to $100,000

Establishing an investment property can be a long process, and one of the most challenging steps is finding suitable tenants.

This is where Futurerent steps in. Futurerent is a property-technology platform providing investors up to $100,000 upfront to cover rental income. This can help in the early stages of property investment where it can be hard finding tenants.

However, Futurerent is not a personal loan. So what is it? Read on to discover how it works.


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Buying an investment property or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for investors.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
GET A FULL OFFSET ACCOUNT FOR NO EXTRA COST

Low Rate Home Loan - Prime (Principal and Interest) (Investment) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
GET A FULL OFFSET ACCOUNT FOR NO EXTRA COST

Low Rate Home Loan - Prime (Principal and Interest) (Investment) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Investor, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Investor, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
AN EASY ONLINE APPLICATION

Yard Investment Loan (Principal and Interest) (LVR < 80%)

  • No application fee
  • Unlimited additional repayments
  • Unlimited free redraws
AN EASY ONLINE APPLICATION

Yard Investment Loan (Principal and Interest) (LVR < 80%)

  • No application fee
  • Unlimited additional repayments
  • Unlimited free redraws
VariableMore details
FREE REDRAW FACILITY

Smart Investor Home Loan (Principal and Interest) (LVR < 80%)

  • Option to add an offset for 0.10%
  • Fast turnaround times, can meet 30 day settlement
  • No on-going or monthly fees
FREE REDRAW FACILITY

Smart Investor Home Loan (Principal and Interest) (LVR < 80%)

  • Option to add an offset for 0.10%
  • Fast turnaround times, can meet 30 day settlement
  • No on-going or monthly fees

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of December 7, 2021. View disclaimer.

What is Futurerent?

Godfrey-Dinh-square.jpg

Savings.com.au spoke with Futurerent co-founder and CEO Godfrey Dinh (pictured above) to find out how the platform is changing property investment.

Futurerent provides property investors up to $100,000 in rental income in advance. There is technically no interest rate on this advance - unlike a personal loan. Instead, investors are charged a monthly admin fee of 0.5% of the total advanced amount.

“Futurerent is a simple, fast and loan-free alternative to the banks, that gives property investors up to $100,000 of their rent, paid in advance,” Mr Dinh told Savings.com.au.

“[We are] helping property investors with funding for renovations, new property purchases, small businesses and other investments.”

If an investor has a rental charging $3,000 per month ($36,000 a year) takes out a $36,000 advance through Futurerent and pays back $1,000 per month, it will take them 36 months to pay off. At 0.5% of the $36,000, their monthly admin fee will be $180 per month. Over 36 months, this will cost $6,480, which is the equivalent of a 6% p.a. interest rate per year.

How does Futurerent work?

Futurerent1.jpg

“We pay our clients in two business days, while the banks are known to force property investors into waiting two to three months to refinance,” Mr Dinh said.

“Property investors can save on hours of paperwork when they use Futurerent. We don’t require a valuation, bank statements, or income verification. We get everything we need from each client’s property manager.”

How is Futurerent different from a loan?

“The key difference between Futurerent and any loan is you’re not borrowing money – you’re just getting your rent paid in advance. This means there’s none of the paperwork associated with a loan like serviceability and valuation assessments, no impact on your credit file, and no interest,” Mr Dinh said.

“The rent you’re paid in advance is repaid in equal instalments over a maximum of 3 years, from a portion of the rent paid by your tenant. Futurerent’s 6% cost is also paid from the rental income, like your property management fees.

“This means Futurerent clients don’t pay anything out of pocket and repayments are paused or adjusted if the tenant vacates or if the rent changes.”

What sets Futurerent apart from other funding avenues for investors?

The main funding avenue for investors looking to access capital through their property is refinancing or equity release, and Mr Dinh said Futurerent can be a favourable alternative to these options.

“Our low fixed cost of 6% per year leaves more dollars in our clients’ pockets than other financing services. Refinancing a home loan can cost up to $3,000 in additional fees alone, plus tens of thousands in break costs and lenders mortgage insurance,” he said.

“Add on interest payments and it’s clear why refinancing is an inefficient and expensive way for property investors to access capital.”

Futurerent did a calculation and found if a property investor wants to access $25,000, refinancing to add this amount onto their home loan would cost them an additional $15,370 in interest over 30 years, on a variable interest rate of 3.42%.

Using Futurerent to access $25,000, investors can repay in three years, and it will only cost them a maximum of $4,500. If they choose to repay in 1.5 years, their cost is halved at $2,250.

“Compared with 7-year personal loans and 30-year investor home loans, our short 1.5-3 year repayment terms enable property investors to avoid years of additional interest payments,” Mr Dinh said.


Photo by R Architecture on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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