Questions worth asking before you buy

• What is my genuine usable equity, and what is left over if values fall 10 per cent?
• How much cash am I keeping aside as a buffer after settlement?
• What weekly shortfall can I fund without changing how my household lives?
• What happens to that shortfall if interest rates rise a percentage point?
• Have I budgeted every upfront cost, not just the deposit?

• What rate is the lender assessing me at, and what does that do to my capacity?
• Am I paying lenders mortgage insurance, and what is the actual premium?
• Is the loan secured against this property alone, or is my home cross-secured too?
• Interest only or principal and interest — and what happens when the interest-only period ends?
• What fees apply to set up, and to exit or refinance later?

• What is the realistic rent today, evidenced by comparable leases — not a projection?
• What is vacancy doing in this area, and how much new supply is coming?
• Who lives here and why? Employment, transport, schools, amenity.
• What did the independent building and pest inspection find?
• For a unit: what do the strata minutes, levies and sinking fund say?
• What maintenance is likely in the next five years — roof, hot water, stumps, wiring?
• Would I be comfortable holding this for ten years if growth is slow?

• Whose name, or what entity, should hold this — and why?
• What are the land tax implications in this state, including aggregation across holdings?
• Is a depreciation schedule worth obtaining for this property?
• What records do I need to keep, and from what date?
• What would capital gains look like if I sold in five or ten years?

• Who is managing it, what do they charge, and what is included?
• How are arrears, repairs and rent reviews handled, and who approves what?
• What insurance do I need — landlord, building, or is strata covering part of it?
• What is my plan if the tenant leaves and it sits empty for eight weeks?
• How is the person recommending this property paid, and by whom?

"How does the person telling me this get paid?" It isn't rude, and a straight operator will answer it without blinking. If the answer is vague, slow everything down.

Work through the first investment property checklist alongside these questions, and test your numbers with the equity calculator and holding costs estimator.

General information only — not financial, credit, tax or legal advice. We generate interest and pass your enquiry to one independent property specialist who can answer these against your actual position. Free, no obligation. Browse everything else on the resources hub.