Buying Your First Investment Property? Read This First
I still remember the first couple I helped buy an investment property. They’d spent months scrolling through listings, running the numbers, and second-guessing themselves. When they finally exchanged, the relief was written all over their faces: “We can’t believe we actually did it.”
That’s the thing about buying your first investment property—it’s exciting, but it can also feel daunting. The good news is, with the right preparation, it doesn’t have to be. Here are the key steps I walk clients through when they’re ready to take the plunge.
Get clear on your “why.”
Ask yourself: are you looking for long-term capital growth, reliable rental income, or simply a way to diversify your wealth? Your answer will shape what type of property makes sense. For example, a city unit might give you steady rental demand, while a suburban house in a growth corridor could deliver bigger gains down the line.
Work out your borrowing power.
Investment loans aren’t assessed the same way as home loans. Lenders look at your income, expenses, existing debts, and even the rent you might earn. Many first-timers either overestimate or underestimate what they can afford. A broker can help you get pre-approval, so you know exactly what’s in your budget before you start shopping.
Budget for more than just the deposit.
Stamp duty, conveyancing, building and pest inspections, insurance, property management fees—the list of extras adds up. I always suggest clients keep a buffer for unexpected costs like repairs or vacancies. It’s not just about buying the property—it’s about holding it comfortably over time.
Think long-term.
Property is rarely a quick win. Instead of chasing the highest rent today, look at the bigger picture: infrastructure projects, new schools, or transport links in the area. These can signal future growth. Remember, a cheaper property in the right suburb can often outperform a flashier one in a stagnant market.
Build your team.
Smart investors don’t go it alone. A broker helps structure your loan. An accountant explains tax benefits like depreciation. A property manager handles tenants and maintenance. Surround yourself with the right people, and you’ll make decisions with confidence, not guesswork.
Stay calm—don’t follow the crowd.
Two traps catch most beginners: waiting forever for the “perfect time,” or jumping in because everyone else is buying. Markets will always move up and down, but the real trick is being able to hold your property long enough for growth to do its work.
Structure your loan to suit your goals.
Interest-only or principal-and-interest? Fixed or variable? There’s no one-size-fits-all answer. For some, interest-only frees up cash flow in the early years allowing additional principle payments on your owner-occupied property. For others, paying down principal quickly builds equity to assist with the next purchase. This is where tailored advice pays off.
Buying your first investment property isn’t just about finding any old property—it’s about building confidence as an investor. Once you’ve taken that first step, you’ll understand how the numbers stack up, how tenants and managers operate, and how to plan for the future.
You don’t need perfect timing or the perfect property to get started. What you do need is clarity, a solid plan, and the right advice. Not overextending for your first property paves the way for future investments. Take that first step, and the rest becomes much easier.
Contact Us
