Property investment FAQs
The questions we get asked most by Australian households thinking about a first or next investment property. Short answers, with a link to the longer read where there is one. General information only — not financial, credit, tax or legal advice.
How much deposit do I need for an investment property?
Most lenders look for around 20 per cent of the purchase price plus costs to avoid lenders mortgage insurance, though smaller contributions are possible with LMI. The deposit is only part of it — stamp duty, conveyancing and inspections sit on top.
Upfront costs explained →What is usable equity?
It is the portion of your home's value a lender will let you borrow against, after allowing for their maximum loan-to-value ratio and what you still owe. It is usually less than the gap between your home's value and your loan balance.
Estimate your usable equity →Should I use a cash deposit or my home equity?
A cash deposit keeps your home out of the transaction and keeps total debt lower. Releasing equity can let you act sooner but adds debt secured against where you live. Both are legitimate; the right one depends on your buffer and serviceability.
Deposit vs equity →What is LMI and do I have to pay it?
Lenders mortgage insurance is a one-off premium you pay that protects the lender, not you. It usually applies when your contribution is under about 20 per cent. Premiums vary by lender, loan size and LVR, so get a figure for your actual scenario.
LMI in plain English →How much does it cost to hold an investment property each year?
Council rates, insurance, management fees, body corporate levies where applicable, maintenance and vacancy all add up. Many owners are surprised by how much of the rent never reaches them. Estimate it before you buy, not after.
Holding costs estimator →How do lenders work out what I can borrow?
They assess your income at a buffered interest rate, shade the expected rent, count your existing debts and credit card limits, and apply an expense benchmark. The result is often well below what a simple repayment calculator suggests.
Borrowing power guide →Can I use my super to buy an investment property?
Super is one possible capital source and arrangements such as an SMSF exist, but they carry rules, costs and responsibilities. It is not a requirement to enquire, and any decision belongs with a licensed adviser.
Property and super →Is negative gearing a good strategy?
Negative gearing is a tax treatment, not a strategy. It reduces the sting of a loss at your marginal rate; it does not turn a weak property into a good one. Tax settings can also change.
Negative gearing explained →What is the difference between cash flow and negative gearing?
Cash flow is the money moving in and out of your account each week. Negative gearing is what the tax system does with a loss once a year. Mixing them up is how people buy something they cannot comfortably hold.
Cash flow vs tax treatment →House or unit for a first investment?
Houses carry a land component and more control; units cost less to enter and often yield more, but bring body corporate levies and shared decision-making. The right answer depends on your budget and the market you are buying in.
House vs unit →Do I have to buy where I live?
No. Plenty of Australians invest interstate. It does mean relying more heavily on independent inspections, a local property manager and your own research rather than local familiarity — and being especially careful with out-of-town marketing.
City guides and resources →Is buying off the plan riskier?
It carries a different risk profile: a long gap between signing and settling, the chance of a valuation shortfall, build delays and finance policy changing in the meantime. Some projects are delivered well; the contract terms matter enormously.
Off-the-plan risks →What does a property manager actually do, and what do they charge?
Leasing, tenant screening, rent collection and arrears, inspections, maintenance coordination, compliance and reporting. Fees are often somewhere around 5–9 per cent of rent plus letting and administration charges — ask locally for the real schedule.
What property managers handle →What should I check before I sign anything?
Independent building and pest, the strata report and minutes for a unit, the contract reviewed by your own conveyancer, and your buffer still intact after settlement. Work through a checklist rather than trusting memory on the day.
First investment property checklist →What does Aust Property Investor actually do?
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Compliance and disclaimer →Want a straight read on your position?
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