How to prepare for buying an investment property
Anyone who wants to buy their first investment property in 2025 should aim to make themselves as creditworthy as possible.
When lenders review a home loan application, the key questions they ask themselves are how likely the borrower would be to make all their mortgage repayments – month after month, year after year – and at what point their finances would become too stretched. That will determine whether they’d be willing to approve the application and how much they’d be willing to lend.
There are several steps potential investors can take to make themselves more creditworthy:
- Increase their savings rate. This can be done by increasing their income and/or reducing their spending.
- Become a more consistent saver. As far as lenders are concerned, a regular saver is more likely to be the kind of person who would be able to make regular mortgage repayments than an erratic saver.
- Pay off existing debts. The less money someone needs to devote to servicing car loans, personal loans and credit cards, the more they’ll be able to devote to servicing a mortgage.
Loan size, deposit and more
As potential investors are getting their finances in order, they should think about how much of a mortgage they’d be able to afford. (This home loan repayment calculator can provide a ballpark figure; to get an exact figure, contact me.) Once someone has a rough idea of the maximum they could borrow, they’ll have a rough idea of their maximum purchase price.
That, in turn, will influence their choice of property and location. For example, someone with a larger budget might be able to buy a house in a capital city location; whereas someone with a smaller budget might have to buy a more affordable property (such as an apartment or townhouse) or choose a more affordable location (such as a regional community).
Investors should conduct their research and due diligence before making any decisions. If they are purchasing interstate, they may also consider appointing a buyer’s agent to do the on-site property inspections.
Finally, potential investors should think about how they’re going to fund their deposit. Someone who already owns an owner-occupied home might be able to use some of their equity to cover the deposit. I can explain how it works and the costs involved.
Someone who doesn’t own a property will probably have to use cash to fund their deposit. That said, there are some ways around needing a 20% deposit or paying lenders mortgage insurance – for example some lenders may waive this for people in certain professions such as in the healthcare industry. Again, I’d be happy to explain in further detail.
Licensing statement: Rayne Finance ABN [70 605 100 838] is authorised under LMG Broker Services Pty Ltd Australian Credit Licence 517192. Disclaimer: (1) As with any financial scenario there are risks involved. This information provides an overview or summary only and it should not be considered a comprehensive analysis. You should, before acting in reliance upon this information, seek independent professional lending or taxation advice as appropriate and specific to your objectives, financial circumstances or needs. This publication is provided on the terms and understanding that: (2) LMG Broker Services Pty Ltd, Rayne Finance (Seed Lending Pty Ltd) and the authors, consultants and editors are not responsible for the results of any actions taken on the basis of information in this publication, nor for any error in or omission from this publication. (3) LMG Broker Services Pty Ltd, Rayne Finance (Seed Lending Pty Ltd) and the authors, consultants and editors, expressly disclaim all and any liability and responsibility to the maximum extent permitted by the law to any person, whether a purchaser or reader of this publication or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this publication.
Explore other FAQs and Facts
Buy Now, Regret Later: What BNPL (Buy Now, Pay Later) Means for Your Mortgage Chances
The Block’s Daylesford finale made headlines for all the wrong reasons, but beyond the TV drama, the regional outcome was far from a failure. With three homes selling over $3 million and millions injected into the local economy, the real winner wasn’t the contestants, it was the town.
Regional Victoria: Why buying now stacks up
Regional Victoria’s property market has hit a sweet spot in 2025. Towns like Ballarat, Bendigo and the Surf Coast are seeing steady growth supported by real demand, thriving infrastructure and better buyer choice. With balanced conditions and lasting value on offer, it’s an ideal time to make your move locally.
The Block Daylesford: TV Hype vs. Market Reality
The Block’s Daylesford finale made headlines for all the wrong reasons, but beyond the TV drama, the regional outcome was far from a failure. With three homes selling over $3 million and millions injected into the local economy, the real winner wasn’t the contestants, it was the town.
Five tips to get your property ready for sale
Spring is peak selling season, with listings up 14.4% in August alone. Warmer weather, blooming gardens, and longer days bring buyers out in force. If you’re thinking of selling, small changes like freshening up your street appeal or boosting natural light can make a big impact on both speed and price.
50,000 new places in the Home Guarantee Scheme
From 1 July 2025, an extra 50,000 places are available in the Home Guarantee Scheme, helping eligible buyers purchase a home with a smaller deposit and avoid lenders mortgage insurance. The scheme has already supported over 160,000 Australians since 2020, with tailored guarantees for first-home buyers, regional buyers, and single parents.
How property markets are performing throughout Australia
Australia’s property market is maintaining steady momentum, with dwelling prices rising 1.7% in the first five months of 2025. Perth leads annual growth at 8.6%, followed by Adelaide and Brisbane. Nationwide, demand is outpacing supply, fuelled by interest rate cuts, strong migration, and renewed buyer confidence.
How much do you need for a home deposit?
Buying a property but don’t have the deposit in cash right away? There may be an alternative worth considering. In some situations, buyers can provide a guarantee instead of upfront funds. It’s a tool that can offer flexibility without compromising the seller’s confidence, but how does it actually work?
What are deposit bonds and how do they work?
Buying a property but don’t have the deposit in cash right away? There may be an alternative worth considering. In some situations, buyers can provide a guarantee instead of upfront funds. It’s a tool that can offer flexibility without compromising the seller’s confidence, but how does it actually work?
Understanding conditional loan approval
Thinking about buying a property? You’ve probably heard the term “conditional approval” thrown around but what does it actually mean, and how does it differ from unconditional approval? Understanding the difference can help you feel more confident, better prepared, and avoid surprises as you move through the home loan process.
How to use equity to purchase property
Equity in your home can open doors to new financial opportunities, including property investment, renovations, or debt consolidation. It’s about understanding what you’ve built up—and how to use it wisely. With the right guidance, equity can help you move forward with confidence, but it’s important to weigh the benefits and risks.