If you’ve been toying with the idea of getting into property investment in Australia, you’re definitely not alone. With over 2 million Aussies already owning investment properties, it’s become something of a national obsession. And there’s good reason for that—more than half of household wealth in this country is tied up in residential real estate.
But where do you even begin? What’s the best way to start investing in property? As someone who’s been through this journey and come out the other side, I can tell you: while the process seems overwhelming at first, with the right information and strategy, you can make some incredibly rewarding long-term decisions.
Let’s break it down.
Australia’s Love Affair with Property Investment: Key Stats
Before we dive into the how-to, here are some figures that show just how serious Australians are about property:
- Over 2 million Australians are property investors.
- According to the Reserve Bank of Australia, 70% of investors own just one property, 20% own two, and only 10% own three or more.
- Roughly 48% of investor-held dwellings are units (CoreLogic, 2016).
- The most investment-heavy markets are the Gold Coast, Brisbane, Darwin, Sydney and Melbourne (CoreLogic, 2016).
Clearly, the appeal is there—but that doesn’t mean every investor is winning. The key is knowing what you’re doing.
The Pros and Cons of Property Investment
Let’s look at the upside—and the downside—of building wealth through bricks and mortar.
Advantages
- Stability: Unlike shares or crypto, property tends to be less volatile. Markets move more slowly, giving you time to adjust.
- Rental Income: With a tenant in place, you can enjoy regular passive income—often covering part or all of your mortgage.
- Capital Growth: Historically, property values in Australia have risen over the long term. This means a potential windfall when it’s time to sell.
- Tax Benefits: Many expenses—including loan interest, maintenance and depreciation—can be claimed against your rental income.
- Tangible Asset: Property is a physical investment, and that can feel more secure than numbers on a screen.
- No Expertise Required: Unlike shares or startups, you don’t need specialist knowledge to start. Though learning the ropes is strongly recommended.
Disadvantages
- High Costs: Between deposits, legal fees, and stamp duty, the upfront cost is substantial—and ongoing expenses don’t stop.
- Interest Rate Rises: Higher rates mean more expensive repayments and less cash in your pocket.
- Vacancies: No tenant? You’re footing the bill yourself.
- Inflexibility: You can’t just sell one room if you need fast cash.
- Depreciation: Property markets can go down as well as up. If you’ve borrowed heavily, negative equity becomes a real risk.
- Entry and Exit Costs: Think stamp duty, agent commissions, legal fees, pest reports—the list goes on.
Understanding the True Costs of Property Investment
Many first-time investors underestimate just how expensive this journey can be. Let’s break it down.
Upfront Costs (Buying and Selling)
- Stamp duty (varies by state)
- Legal and conveyancing fees
- Pest and building inspections
- Title searches
- Mortgage establishment fees
- Capital gains tax (when you sell)
Ongoing Costs (Holding the Property)
- Property management fees
- Land tax (state-specific)
- Council rates and water rates
- Landlord insurance
- Building insurance
- Maintenance and repairs
- Body corporate (if you buy a unit)
All of these costs eat into your return, so it’s essential to do your numbers upfront—and build a buffer for unexpected expenses.
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Step-by-Step: How to Start Your Property Investment Journey
Let’s talk practical steps. Here’s the framework I wish someone had given me at the start.
1. Set Your Financial Goals
Before anything else, figure out why you want to invest.
- Are you aiming for $70,000 in annual passive income?
- Do you want to retire in 15 years?
- Are you trying to reduce your taxable income?
Set clear, time-bound financial goals. These will help determine the investment strategy that best suits your journey.
2. Choose the Right Investment Strategy
This is a critical step that many beginners skip over. There’s no one-size-fits-all. Some common strategies include:
- Buy and Hold: Long-term capital growth is the goal.
- Positive Cash Flow: Focus on high-rent, low-cost areas for net income.
- Renovation (Flipping): Buy, renovate, sell at a profit.
- Subdivision/Development: Add value through rezoning or development.
Not sure what strategy is right for you? Read widely—start with the Top 30 Property Investment Books—but don’t lock in your strategy based on one author’s perspective. Study multiple strategies and cross-reference with your financial goals.
3. Talk to a Mortgage Broker
Before you start scouring listings, speak to a mortgage broker. They’ll help you:
- Understand your borrowing capacity
- Identify what deposit you’ll need
- Factor in all additional costs (stamp duty, legal fees, insurance)
- Compare loan products across lenders
A good broker is worth their weight in gold—they’ll help you avoid financial stress down the road.
4. Do Your Suburb Research
This is where smart investors are separated from the rest.
Start looking at suburb-level data:
- Is population growth trending up?
- Are job opportunities improving?
- Are higher-income demographics moving in (a sign of gentrification)?
- What’s the historical capital growth?
- How are vacancy rates and rental yields performing?
This type of due diligence is crucial. Tools like SuburbsFinder make this easier by letting you filter 15,000+ suburbs by 40+ performance metrics—capital growth, cash flow, inventory levels, vacancy rates and more.
5. Get Pre-Approval
Once you’ve identified a strategy and suburbs you like, it’s time to get your loan pre-approved.
A pre-approval gives you:
- A clearer idea of your budget
- The ability to move fast when the right deal comes up
- Confidence during negotiations
Your mortgage broker will coordinate this with your preferred lender.
6. Start Making Offers (Even for Practice)
This may sound odd—but try making a few mock offers even if you don’t plan to buy that specific property.
Doing this:
- Helps you understand market dynamics
- Builds confidence in negotiation
- Gets you used to the process
Just don’t hassle the same agent repeatedly. Spread it out across different areas and agents.
Why Tools Like SuburbsFinder Give You the Edge
There’s a reason smart investors lean on data. Platforms like SuburbsFinder simplify the process:
- Customisable Filters: Find suburbs with both strong capital growth and positive cash flow.
- Feasibility Analysis: Run side-by-side comparisons of up to 5 properties.
- Research Efficiency: Slash your research time and avoid manual spreadsheets.
Using this tool is like having an in-house data team—it levels the playing field against more experienced investors and developers.
Your First Property Is Just the Beginning
Getting started in property investing can feel overwhelming—but it’s also one of the most empowering financial decisions you can make.
With the right guidance, a clear goal, and solid tools, you can navigate this journey like a pro.
And remember, the sooner you pinpoint a strategy that works for you, the sooner you can build on it. Rinse and repeat. That’s how real wealth is built in real estate.
Ready to Take the First Step?
Try out SuburbsFinder’s research and analytics platform today. Our customisable tool helps you:
- Target suburbs with the right mix of growth and yield
- Compare suburb performance history
- Run feasibility studies on multiple properties at once
There is really so much to learn in property investing and SuburbsFinder is here to help you. We offer our services to help you find the best location to buy investment properties and more importantly, identify the right property to have.
Take advantage of our fully customisable tool to help you in choose which areas have both Good Capital Growth and Positive Cash Flow and utilize it to be on top over the less-knowledgeable property investors, local real estate representatives, developers and owners. It lets you narrow down 15,000+ suburbs by combining all 40 data points as filters. It also lets you compare suburbs historical & current performance. And once you identified the best location our tool also lets you do feasibility studies on 5 properties all at the same time. Save time, budget, and cover the full cycle of your investment property research workflow.
So, if you think what we’ve built will drastically decrease your time researching for the best location and finding the right property based on your goals and financial situation, why don’t you sign up and give it a try.
It is the most comprehensive location report of all 15,000+ suburbs in Australia – with linked state, suburb, and postcode. It’s the perfect tool for property investors looking to buy a property to rent out rooms individually to have a positively geared portfolio.
