Of all the ways to build wealth in Australia, how to buy an investment property is the one most people already half-understand from buying their own home — and then get tripped up by the 20% that’s actually different: serviceability on a second loan, depreciation, and who’s allowed to live in it.
Check borrowing power
Lenders assess a second loan differently to your first.
Save the deposit
Usually 10–20% plus costs, depending on the lender.
Research the area
Rental yield and vacancy rates matter as much as price growth.
Get finance pre-approved
Know your limit before you start making offers.
Settle and find a tenant
Or decide on a property manager to handle it for you.
Where the deposit actually goes
Illustrative split only — actual proportions vary significantly by state and property price.
How to buy an investment property: the deposit question
Most lenders want 10–20% of the purchase price, though going in at 20% or above typically avoids lenders mortgage insurance (LMI), an added cost for borrowing above that threshold. Below 20% is still possible, just more expensive per dollar borrowed.
Lenders also assess a second property loan differently to your first home loan — existing debts, expected rental income, and a stricter servicing buffer all factor into how much you can actually borrow, which is why pre-approval is worth getting early rather than after you’ve found a property you like.
Can I live in my investment property?
You can, but doing so changes its tax treatment — deductions tied to an investment property generally require it to be genuinely rented out or available for rent.
Can I use super to buy an investment property?
Not through a standard retail fund, but a self managed super fund can, under specific borrowing and compliance rules.
How to buy multiple investment properties?
Equity in an existing property is commonly used as partial security for the next deposit, rather than saving each deposit from scratch.
Where to buy investment property in Australia?
Rental yield, vacancy rate, and infrastructure/population growth plans matter more than chasing the cheapest median price alone.
Buying purely on projected capital growth while ignoring rental yield and vacancy rates. A property that’s hard to keep tenanted can quietly cost more in holding expenses than it ever gains in value over the same period.
Tax basics once you own it
Rental income is taxable, but many of the costs of holding an investment property — loan interest, property management fees, repairs, and depreciation on fittings and the building itself — can typically be claimed as deductions. Where deductions exceed rental income, the shortfall (“negative gearing”) can generally offset other taxable income, which is part of why structuring and record-keeping matter as much as the purchase decision itself. For current, authoritative guidance, see the ATO’s residential rental properties guide.
This only works through a properly structured self managed super fund using a limited recourse borrowing arrangement — not a standard industry or retail super account. The compliance requirements are real, so this is worth professional advice before committing.
Frequently Asked Questions
How much deposit do I need for an investment property in Australia?
Typically 10–20% of the purchase price, with 20% or more generally avoiding lenders mortgage insurance.
Can I live in my own investment property?
You can, but it changes the property’s tax treatment, since investment-related deductions generally require the property to be rented out or genuinely available for rent.
Can I use my super to buy an investment property?
Only through a self managed super fund using a compliant limited recourse borrowing arrangement, not through a standard retail or industry super fund.
How many investment properties can I own in Australia?
There’s no legal limit — the practical ceiling is usually your borrowing capacity and how lenders assess your existing debt and rental income.
Diversifying beyond property too?
We independently test automated trading platforms on real accounts before publishing a verdict — not sponsored placements.
See All Reviews Ask Our Analysts