A Beginners Guide to Property Investment - Newcastle Financial Planning Group
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A Beginners Guide to Property Investment

Getting started with property investment: 3 tips for success!

Thinking of investing in property but not sure where to start? You’ve come to the right spot!

Property investment is an extremely popular choice for budding investors. According to the Reserve Bank of Australia, out of 2 million Australian investors, about 70% own property and 20% own two or more.

So where to start?

First, let’s look at some of the pros and cons of buying an investment property to find out if it will bring you success.

According to ASIC’s MoneySmart resource hub, here’s what you need to consider about investing in property:

Less volatility than other investments (such as shares) Cost: risk of rental income not covering expenses
You can earn rental income if you lease as a rental property. Interest rates: chance of rising interest rates
Tax deductions – you can offset property expenses against rental income, including interest on a property loan Vacancy: there may be times where you have no tenant and must cover the costs.
Capital growth if the property increases in value Inflexible: you can’t sell part of the property if you need quick cash
Less complex than other types of investments High entry and exit costs (stamp duty, legal fees, or real estate fees)

Here are 4 questions you can ask yourself before you decide if property investment is a good idea for you.

  1. What are your goals for investing in property? 

Are your financial goals short or long-term? In other words, are you wanting to gain income from the rent over the next few years or do you want the value of your property to increase in the long-term? Or maybe both?

Or perhaps your long-term goal is to create a diverse property portfolio? So, you can reap the different benefits from each property type.

No matter what your objectives are, establishing your goal will help you to decide on the best investment property for you and create a personal plan to reach your goals in the timeframe you want to.

  1. How much do you have to spend?

Buying and managing an investment property can be costly. Other than the actual cost of the property, some of the other costs include:

  • Stamp duty
  • Conveyancing fees
  • Legal costs
  • Search fees

Think about what your budget looks like and how much you want to be spending on an investment property.

One strategy you might like to consider if you have a smaller budget is negative gearing. Find out why negative gearing may be the best investment option for you.

  1. Where do you want to buy?

Do you want a house near where you live now so you can maintain it and keep an eye on things or interstate or in an upcoming suburb which may increase your returns in the future?

Proximity to public transport, healthcare, food and retail facilities, childcare, education, and other amenities can make a big difference to how much rent you end up charging.1

This is where your budget is key to work out to determine the suburbs you can afford.

  1. What type of property do you plan on buying?

According to Investopedia, there are three main types of investment properties for your consideration that have different benefits and may suit your circumstances:

  1. Residential
  2. Commercial
  3. Mixed-Use

Here are 3 top tips to help your first property investment process runs smoothly!

1. Know your property audience

Consider who will be living in the house and what they would want from it? What kind of people live in the local area? Are there good schools nearby so you can market it to a young family? Do these people have the money to afford your home?

There’s no point in buying an investment property only to find out that that type of property isn’t in demand for that suburb.

Do your research first and have a target audience in mind.

2. Don’t make it personal

It’s completely understandable if you are buying your dream home, why you would buy with your heart instead of your head. But when it comes to purchasing an investment property, remember that you won’t be living in it so don’t let your emotions get in the way of your decision or your offer.

When it comes to investing, letting your heart rule your buying decision is a common trap to be avoided at all costs.2

3. Find the right property for you

A perfect investment property is different for everyone. Scan through current opportunities for you to gauge an idea of what’s available and what’s within your price range.

Take the time to scroll realestate.com, estimate a property price using Domain’s Home Price Guide or use the CommBank Property App to hunt for options!

If you’re ready to invest in property, seek advice from a financial adviser to help you manage the costs and ensure your strategy matches your circumstances.

Investment properties come with tax implications, additional income to manage, as well as risks that need to be considered. In Newcastle, a financial adviser can help you make the right choices for you.

If you would like advice on your property investment plan, get in touch with Newcastle Financial Planning Group today. We’re here to help your financial dreams become a reality.

We have offices located in Newcastle – The Junction (NFPG), Central Coast – Erina (CCFPG), and  Sydney CBD (SWA).


1  https://www.commbank.com.au/articles/property/finding-the-right-investment-property.html
2 https://propertyupdate.com.au/property-investment-for-beginners/

DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group and Sydney Wealth Advisers are subsidiaries of Coastal Advice Group which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.

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