Saving for a home

Investing in property: what you need to know

You’re ready to take your next step on the property ladder and buy an investment property. This is huge! But it’s probably got you questioning a few things. Do you know when to make the leap? Is it the right move for you? Before you rush in, here are a few things to consider over a cuppa first.

Can you afford it (No, but actually?)

It could be a renovator’s dream or the deal of the century, but if it’s going to push you to your limits to make the repayments, ask yourself: is this the right investment for me?

As well as the cost of the property, remember the other expenses of buying (like stamp duty, legal fees and building reports to name a few) as well as ongoing costs (a few examples include – interest repayments, any strata fees, and council and water rates).

The long-term capital growth of a property could make it a smart investment for your future, but adjusting your lifestyle in the present to accommodate your repayments might be a bit stressful. To help make sure that you don’t over commit yourself, do a thorough number crunch and consider giving yourself a buffer to allow for any surprise expenses – because, let’s face it, they’re going to happen whether we like it or not. At least this way you’re prepared.

Do your homework

Okay, you’ve found a place and the numbers work for your budget – but how well do you know the neighbourhood? When you’re looking, experts may advise you to choose a location that has a history of strong capital growth. If you’re not familiar with the property market, consider enlisting the help of a professional.

Remember, you’re looking for something that’s rentable, not your personal dream home. So you’re better off choosing a property with broad appeal and features that could make it easier to rent out.

Another thing that could be worth looking into is whether you can add value to a property through renovation or redevelopment. If people are starting to revamp other houses in the area (but there are still plenty of original… how do we put this… ‘ugly ducklings’), this could indicate good investment potential.

Expect the unexpected

Setbacks are a reality. That’s why all the best advice will likely tell you to factor a buffer into your budget. Don’t kid yourself by thinking that once you’ve secured your investment you can just sit back and watch the value climb: unexpected things – like tenants moving out or strata fees going up – do happen. Having a plan for setbacks could help you access the cash to get you through.

It’s a marathon not a sprint

When it comes to property investment, having a long-term strategy will set you up for success. Investment properties aren’t a get-rich-quick tactic. They’re a commitment. Prepare yourself to play the long game and make sure you’re all set up to hang onto your investment for around ten years or more (depending on your circumstances).

How much can you borrow?

Are you ready to discover your borrowing power? Try our ING borrowing power calculator to find out an estimate of where you stand.

The information is current as at publication. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Deposit products, savings products, credit card and home loan products are issued by ING, a business name of ING Bank (Australia) Limited ABN 24 000 893 292, AFSL and Australian Credit Licence 229823. ING Living Super (which is part of the ING Superannuation Fund ABN 13 355 603 448) is issued by Diversa Trustees Limited ABN 49 006 421 638, AFSL 235153 RSE L0000635. The insurance cover offered by ING Living Super is provided by Metlife Insurance Limited ABN 75 004 274 882, AFSL 238096. ING Insurance is issued by Auto & General Insurance Company Limited (AGIC) ABN 42 111 586 353 AFSL Licence No 285571 as insurer. It is distributed by Auto & General Services Pty Ltd (AGS) ABN 61 003 617 909 AFSL 241411 and by ING as an Authorised Representative AR 1247634 of AGS. All applications for credit are subject to ING’s credit approval criteria, and fees and charges apply. You should consider the relevant Product Disclosure Statement, Terms and Conditions, Fees and Limits Schedule, Financial Services Guide, Key Facts Sheet and Credit Guide available at when deciding whether to acquire, or to continue to hold, a product. Before interacting with us via our social media platforms, please take a minute to familiarise yourself with our Social Media User Terms

Did you find this page helpful?