Are You Finance Ready?

Buying an investment property isn’t the first step — getting your finances ready is.

Before you go to inspections or talk to agents, you need to know what you can afford, what a bank will lend you, and how the numbers will affect your day-to-day life.

Here’s what to check.

Are You Ready?

A lot of first-time investors ask, “How do I know if I’m ready?”

If you’ve got a stable income and either some savings or equity in your home, you might already be good to go. But before you start applying for loans, run through this checklist.

Financial Readiness Checklist

Tick these off first:

• Know your income, debts, and current expenses

• Understand your goals: Are you chasing growth or cash flow?

• Have a deposit — from savings or equity

• Know your borrowing power

• Estimate your after-tax cash flow (loan repayments vs rent)

• Be clear on the type of property you’re targeting

What Can You Afford?

Your buying power depends on your income, liabilities, and deposit.

General rules:

• The more deposit you have, the better.

• If you own a property, you might be able to use equity as your deposit.

• Your bank or broker will calculate your borrowing capacity, but it pays to understand it yourself first.

• If your borrowing capacity is low, use a broker; they can check multiple banks for you.

How Much Deposit Do You Need?

Most investors aim for a 20% deposit—it keeps their lender happy and helps avoid Lender Mortgage Insurance (LMI).

Your deposit can come from:

• Cash savings

• Equity in your current home or another property

• Or a mix of both

Some lenders may accept a 5% deposit, but you’ll likely pay LMI, which can add thousands in upfront costs.

Don’t Forget the Upfront Costs

On top of your deposit, budget for another 5% of the property price to cover:

• Stamp duty (varies by state)

• Conveyancing and legal fees

• Loan setup or application fees

• Building and pest inspections

• Property insurance

Stamp duty is the biggest line item most people forget — check the cost before you fall in love with a property.

Can You Buy With Family or Friends?

Yes — it’s called co-ownership, and it’s a smart way to get into the market sooner if you’re short on deposit.

Benefits:

• Split the deposit and costs

• Boost your combined borrowing power

• Share ongoing expenses

Risks:

• You’re all on the hook for the full loan

• You’ll need a written agreement for how it works — and what happens if someone wants out

If you’re considering this, we recommend getting a lawyer involved early.

Want to Talk to a Finance Specialist?

We’re not mortgage brokers, but we work with one we trust — and he’s helped many of our clients set themselves up to buy.

If you’d like an intro, just ask. There’s no pressure, and no cost.

Book a Free Consultation

Michael Sloan has helped thousands of Australians invest in property smartly—with a plan, not just a gut feeling.

Book a free call and let’s talk through your numbers, your goals, and what’s possible.

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