You'll need to consider:
- rental income
- land tax and capital gains tax
- landlord and building insurance
- the type and location of the property
- the transaction costs of the purchase
- whether the investment will be negatively or positively geared
- whether you'll self-manage the property or engage an agent
- ongoing repair costs.
Calculate how much you can borrow, including all expenses of a home loan, such as:
- interest rates
- stamp duty
- account keeping fees
- pre-purchase inspections
- legal, application, value and settlement fees.
You will also need to answer questions like:
- Do you have a deposit saved? The usual amount is 20 per cent of the purchase price, but the more you can save the better.
- Will you have to pay mortgage insurance?
- Have you accounted for all transaction costs (legal, inspections, government charges, financial costs, moving costs)? Up to 5 per cent of the purchase price can be added in just these costs.
- Do you want to buy an existing property or build your own?