Investing in Property

There’s no doubt about it – property is a popular investment strategy for many Australians. Many people have built wealth in the historically relatively stable long-term asset class as part of their investment portfolio. To get the most out of your investment, it is important you get the finance right – that’s where we can help.

Property has historically delivered relatively positive returns for investors because house prices mostly continue to increase over the long term. This has made it popular as a long-term wealth-building strategy. They can also deliver regular rent returns and form part of a tax-friendly strategy.

There are a few differences between investment property loans and loans for owner occupiers. Often investment property loans carry a higher interest rate because they could be perceived as riskier. If you already own a property, you may also be able to access equity to go toward the deposit.

Some investors choose interest-only loans for their investment properties, meaning their repayments only cover the interest component of the loan. During this time, the principal isn’t being paid down. These are generally only available for a set timeframe after which the loan will convert to principal and interest.

Something to keep in mind is that interest-only loans often come with higher interest rates and will cost more over the life of the loan as the principal, which the interest is calculated from, does not decrease for a set period of time. They can, however, be a way to maximise tax deductions or temporarily reduce expenses.

There are many strategies property investors can choose. The right one for you depends on your circumstances and goals. One of the main factors to consider is how long you are planning on having the property, how much capital you are willing to put down and whether you need rent to cover your outgoings.

The total deposit you need will depend on the lender and the value of the property. You typically need a 20% deposit to avoid paying lenders mortgage insurance (LMI). It is possible to use equity you have in another property to form part of the deposit. 

Positive Gearing:


  • Provides immediate rental income, ensuring stable cash flow.
  • Reduces reliance on property appreciation for profitability.
  • Offers lower financial risk and borrowing costs.
  • Can diversify investment portfolio with lower initial investment.


  • Limited growth potential compared to negatively geared properties.
  • Offers fewer tax benefits, resulting in higher tax liabilities.
  • Sensitive to market fluctuations in rental demand and property values.
  • Requires larger initial investments, limiting accessibility for some investors.

Negative Gearing:


  • Offers tax advantages by offsetting losses against taxable income.
  • Allows leverage of borrowed funds to potentially increase returns.
  • May lead to long-term capital gains as property values appreciate.
  • Diversifies investment portfolio across different asset classes.


  • Relies on ongoing losses, potentially straining cash flow.
  • Subject to market risks due to fluctuations in property values.
  • Vulnerable to changes in tax regulations impacting investment returns.
  • Increases borrowing costs, particularly with rising interest rates.