Introduction
Property investment can be a powerful wealth-building strategy, but success requires thorough research and due diligence.
This checklist covers the key factors to evaluate before purchasing an investment property. Use it alongside professional advice from an accountant and financial planner.
Financial Analysis
Before anything else, run the numbers. Investment property success is built on sound financial analysis.
Pro Tips
- Use conservative estimates – assume some vacancy and unexpected costs
- Get a depreciation estimate BEFORE buying to understand tax benefits
- Compare cash flow scenarios at different interest rate levels
Capital Growth Factors
Long-term wealth from property comes primarily from capital growth. Evaluate these factors:
Tenant Demand Analysis
A property is only an investment if it's tenanted. Assess rental demand carefully:
Property Assessment
The property itself must appeal to quality tenants and require reasonable maintenance:
Strata Considerations (Apartments)
If buying an apartment or townhouse, strata factors are critical:
Official Resources
Tax & Finance Structure
How you structure the purchase significantly impacts returns:
Ownership Structure:
Personal name: Simple but personally liable
Joint names: Splits income/CGT but both liable
Trust: Flexibility but costs and complexity
Company: Asset protection but CGT disadvantages
SMSF: Long-term strategy with strict rules
Loan Structure:
Interest-only vs. principal & interest
Fixed vs. variable rate
Offset account benefits
Separate loan from owner-occupied property
Pro Tips
- Get specific tax advice BEFORE purchasing – structure is hard to change
- Interest-only loans maximise deductions but don't build equity
- Never cross-securitise investment and home loans
Official Resources
Property Management
Good property management protects your investment:
Due Diligence Summary
Before making an offer, ensure you've completed:
Frequently Asked Questions
What is a good rental yield in Sydney?
Should I buy a house or apartment for investment?
Can I manage the property myself?
What is negative gearing?
Disclaimer
This checklist provides general information only and does not constitute financial or investment advice. Property investment involves risks including potential capital loss. Always seek advice from licensed financial planners, accountants, and solicitors before making investment decisions.
