Property is a popular investment choice because it gives you a tangible asset that combines long-term wealth creation with ongoing income.

• Long-term capital growth: You can benefit from potential capital growth as property values increase over time.
• Steady rental income: You can generate a regular rental income to help cover loan repayments and expenses, whilst having greater income stability compared to many other asset classes.
• Leverage opportunities: You can use finance to purchase property, allowing you to benefit from growth on the full property value.
• May offer the ability for non-cash deductions from depreciation of the building and its fixtures and fittings.

Gross rental yield helps you understand how much income a property generates compared to its purchase price.

• How gross rental yield is calculated: Divide the annual rent by the property price, then multiply by 100. For example, if a property costs $500,000 and earns $25,000 in rent per year, the gross rental yield would be 5%.
• What to look for: A good rental yield will vary by market, but you should look for areas with strong rental demand, low vacancy rates and a history of rental yield growth.

A property manager looks after the day-to-day running of your investment, saving you time and helping protect the performance of your property.

• Managing the essentials: A property manager handles marketing your property, screening tenants, collecting rent and coordinating maintenance and repairs on your behalf. As they are licenced, they must keep up to date with the laws and ensure your investment property’s compliance.
• Long-term stability: Property managers should focus on pairing your property with the right tenant to support long-term stability, minimise vacancy and ensure you property is looked after.
• Owner involvement: Your property manager will discuss rental applications with you and provide recommendations, however the final decision on selecting a tenant always remains your responsibility as the owner.

The deposit you need will depend on your lender, financial position, property type and the type of loan you choose. However you will usually need a deposit of around 10–20% of the property value for an investment loan.

You should also allow for extra costs such as stamp duty, lender’s mortgage insurance (if applicable) and initial setup costs when planning your budget.

Owning an investment property comes with ongoing expenses, as well as your mortgage repayments, that you should factor into your budget from the start, including:

• Land tax, Council rates, Owners Corporation (if applicable) and insurance.
• Property management fees.
• Routine maintenance and repairs.