Investment Property Guide
Your Path to Smart Property Investments
Investing in property can be one of the most rewarding financial decisions you’ll make—if done right. As mortgage brokers focused on property investors in Bondi Junction and Launceston, we’ve crafted this guide to simplify the journey.
Why Invest in Property?
Property remains a solid investment choice for Australian investors due to:
Capital Growth Potential
Historically, property values appreciate over time.
Steady Rental Income
High-demand areas like Bondi Junction and Launceston can deliver consistent cash flow.
Tax Advantages
Strategies like negative gearing can reduce your taxable income.
Steps to Securing an Investment Property
Understand Your Investment Goals
What’s your aim? Long-term growth, passive income, or something else? Align your goals with your financial capabilities.
Related guide: Types of Investment Strategies
Know Your Borrowing Capacity
Before diving into property options, understand how much you can borrow. This sets realistic expectations and keeps your finances in check.
Started by exploring your borrowing power with our Borrowing Calculator.
Choose a High-Growth Location
Select a location with strong rental demand and growth potential. Suburbs like Bondi Junction and Launceston offer excellent opportunities for property investors.
Secure the Right Loan
Investment property loans differ from standard home loans. Our expertise ensures you get a product tailored to maximise returns while managing costs.
Related guide: Investment Property Loan Options
How to Value Your Investment Property
Determining a property’s true value is critical to making a sound investment decision.
Market Comparison
Analyse recent sales of similar properties in the area.
Rental Yield Potential
Evaluate how much income the property can generate.
Future Growth Prospects
Look for infrastructure development, demand trends, and market forecasts.
For a detailed step-by-step process, check out our Guide to Valuing Your Investment Property.
Investing in New vs Established Properties
Each option has its pros and cons:
New Properties:
- Higher depreciation benefits.
- Typically require less maintenance.
- May come with a premium price tag.
Established Properties:
- More predictable rental income.
- Greater potential for capital growth in well-established suburbs.
- May require renovations or upgrades.
Deciding which is right for you? Explore our Investing in New vs Established Properties Guide.
What is Capital Gains Tax (CGT)?
Capital Gains Tax applies when you sell an investment property for a profit.
CGT Calculation
The tax is based on the profit from the sale, which is the selling price minus the purchase price and allowable expenses.
Exemptions
Properties held for more than 12 months may be eligible for a discount.
Learn how to minimise CGT in our Capital Gains Tax Guide.
Negative Gearing Your Investment Property
Negative gearing occurs when the costs of owning a property (loan interest, maintenance, etc.) exceed the rental income, creating a taxable loss.
Benefits of negative gearing include:
Tax Deductions
Offset losses against other income to reduce your taxable income.
Long-Term Capital Growth
The potential increase in property value can outweigh short-term losses.
Understand if this strategy suits your goals by reading our Negative Gearing Guide.
Costs of Buying and Owning an Investment Property
Determining a property’s true value is critical to making a sound investment decision.
Upfront Costs
Deposit, stamp duty, and legal fees.
Ongoing Costs
Property management fees, maintenance, insurance, and council rates.
Unexpected Expenses
Budget for vacancies and repairs.
Explore these in detail in our Costs of Buying and Owning an Investment Property Guide.
FAQs About Property Investment
Can I claim tax deductions for my investment property?
Yes, you can claim deductions for loan interest, depreciation, and maintenance costs.
How does Capital Gains Tax impact my investment?
CGT is applied when you sell your property for a profit. Long-term holdings (over 12 months) may qualify for a discount.
Should I buy a new property or an established one?
Both options have their benefits. New properties often come with higher depreciation benefits, while established properties offer predictable income and growth potential.
What is the difference between positive and negative gearing?
Positive gearing occurs when rental income exceeds costs, while negative gearing means expenses are higher than income, creating a taxable loss.
How can I evaluate if a property is a good investment?
Consider market comparisons, rental yields, and growth prospects.
Start Your Property Investment Journey
Our team of expert mortgage brokers is here to help you navigate the complexities of property investment with confidence.