How Do I Start Property Investing in 2025?

Why 89% of Wealthy Australians Own Investment Property

Property investment remains the most popular wealth-building strategy among high-net-worth Australians. Unlike shares or other investments, property provides both **passive income** and **long-term capital growth**, while offering unique tax benefits and the security of a tangible asset.

How Much Money Do I Really Need to Start Property Investing?

Step 1: What's Your Financial Starting Point?

Your investment capacity depends on four key numbers. Calculate these before looking at any properties:

• Net worth calculation: Assets minus liabilities (include super, home equity, savings)
• Serviceability buffer: Can you afford loan repayments if interest rates rise 3%?
• Credit score check: 650+ is good, 750+ gets you the best rates
• Available capital: Cash + accessible equity + potential guarantor support

Step 2: Should I Focus on Cash Flow or Capital Growth?

Most successful investors choose one primary strategy initially. Here's how to decide:

Choose Cash Flow If You:

• Need extra income within 1-2 years
• Have limited borrowing capacity
• Prefer predictable, steady returns
• Want to reinvest rental income into more properties

Choose Capital Growth If You:

• Have stable income and can handle negative gearing
• Want maximum long-term wealth building
• Can access tax benefits from negative gearing
• Have a 7+ year investment timeline

Step 3: Where Should I Buy My First Investment Property?

Location beats everything else. Don't buy in your local area just because it's convenient. The best investments are based on data:

Step 4: How Do I Get Finance for Investment Property?

Investment loans are different from home loans. Banks are stricter, but there are strategies to improve your chances:

• 20% deposit minimum: Some lenders accept 10% with LMI
• Rental income assessment: Banks only count 75% of projected rent
• Interest-only options: Lower repayments, higher tax deductions
• Pre-approval strategy: Get approval before property hunting

Step 5: Who Should Be on My Investment Team?

Successful investors don't go alone. Your team should cost 2-3% of property value but save you 10x that in mistakes:

• Mortgage broker: Access to 40+ lenders vs. your bank's 1 option
• Buyers agent: Negotiates better prices, finds off-market deals
• Tax accountant: Maximizes deductions, structures ownership correctly
• Property manager: 7-10% of rent but handles all tenant issues
• Building inspector: $500-800 to avoid $50,000 repair disasters

Step 6: Should I Start with One Property or Multiple?

Start with one property and master the fundamentals. Most successful investors follow this progression:

What Mistakes Do 90% of First-Time Investors Make?

Can I Start Property Investing with Bad Credit?

Yes, but your options are limited and expensive. Here's the reality:

• Credit score 550-649: Specialist lenders, higher rates (8-12%)
• Recent bankruptcy: Wait 2+ years, rebuild credit first
• Guarantor options: Parents/family can guarantee the loan
• Improvement strategy: Fix credit first, then invest for better terms

Your First 30 Days: Action Plan

Ready to start? Follow this exact sequence:

How Long Until I See Results?

Realistic timeline for property investment returns:

• Month 1-3: Rental income starts (but costs are high initially)
• Year 1: Break-even or small loss while learning systems
• Year 2-3: Positive cash flow as rent increases, equity builds
• Year 5+: Significant equity growth enables portfolio expansion
• Year 10+: Multiple properties, substantial wealth accumulation