9 things to consider before buying an investment property


Congratulations on the decision to become a property investor, for most of us, buying an investment property is exciting but nerve racking at the same time.


I normally tell a new property investor to consider the following 9 things when starting in property investing. Understanding that each person’s needs are different, I will cover these points broadly below.

  1. What’s your end goal?

Understanding your objectives is key to finding the right investment property. The actual property itself is never the end goal when it comes to investment – it’s the financial element that you’re really concerned about, capital growth and rental return (yield).

First and foremost, decide what your end goal is whether it be wealth creation or debt reduction and we will work together to create a plan to get there within a realistic time-frame, with the help of our other professional partners in financial planning and accounting. Remember to review this plan regularly as your situation and the property market changes.

  1. What can you actually afford?

We will always check your financials before you decide to purchase a property, making sure there has been no new lending changes or policies or even more suitable offers. Its always best to start with a Loan Strategy Session with an experienced mortgage broker and get a written pre-approval to make sure you have all extra costs available, including conveyancing, inspections, legals and any duties – and always ensure you have a financial buffer.

  1. Leave your emotions at the door

This is not a home for you so there doesn’t need to be an emotional connection to it. It should always be about which property will give you a solid return not which one is most suited to your furniture.

  1. House or Units?

Understanding what property is going to best work for your situation is key. It needs to be a property that will be in hot demand from renters and possible owner-occupiers down the track. It’s best to do your research to see what types of properties are renting quickly and what properties are staying on the market for longer periods of time.

  1. Old or new?

It’s the age-old debate: should you buy a renovator’s delight, or something you can rent straight away? It’s great if it can be rented out as is, but potential to renovate should also be considered. The ability to add value to the property is a good tick, as it will increase rental returns. Don’t immediately write off a property just because it needs a paint job or the kitchen cabinets need to be replaced.

  1. Location, location, location

Location is critical to performance. Things to consider when it comes to location include:

  • How far it is to the CBD or business area?
  • What is the proximity to schools?
  • Are local shops within walking distance, or will tenants have to get in their car to pick up the essentials?
  • Local industry, new jobs and current main employers in the area along with potential council improvements?
  • Where are the public transport options?
  • What other amenities are close by?
  1. Features

You want to appeal to the highest number of tenants, so look for properties that offer that little something extra, like a second bathroom or a double lock-up garage.

Also look at properties that appeal to many segments. For example, a lift may appeal to both retirees and a young family, as both will be looking to avoid stairs, as an example. Just make sure the benefits outweigh any extra costs.

  1. Timing

You need to understand the market and the dynamics. check the history of the property and location. While there are investment opportunities around most of the time, some market conditions are more favourable. Do some serious homework or have a chat with your Mortgage Corp broker, he/she can give you some insights and direct you to the right people to talk to.

  1. Get help from the experts

An experienced mortgage broker can put you in touch with the experts you need to talk to when it comes to real estate and investment. This means accountants, real estate agents, lawyers and valuers. These people are in the industry and they’ll be able to guide you in your decision making. A Mortgage Corp premium broker will help you structure the loan to best suit your situation in order to maximize your wealth-building potential.

9 things to consider before buying an investment property
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Neil Carstairs

Neil Carstairs

Neil Carstairs is the founder of Mortgage Corp, an active property investor and awarding winning MFAA credited finance broker with more than 10 years mortgage broking experience. Currently, Neil is one of only 19 MFAA Certified Mentors in VIC/TAS region.

Neil specialises in helping successful professionals and investors build & grow your property portfolio through strategically structuring your loans for long-term investment success. He is known for his strategic approach to investing and ability to reach fast, successful outcomes for clients where his industry peers could not.

Thanks to his dedication to clients’ success, Neil has consistently receive 5 star client reviews and has been called, by his clients, “Miracle Mortgage Man” “Trusted Friend, Mentor and Educator” “God-send”… 

To find out more about Neil Carstairs and Mortgage Corp, visitwww.mortgagecorp.com.au


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