What First-Time Investors Wish They'd Known

Every investor starts somewhere, and almost every first-time investor feels the same way before they buy: unsure how to weigh up the finance, the numbers, and the decisions in front of them. The lessons that come up again and again aren't about finding a perfect property. They're about being realistic, getting the right support, and knowing what actually matters. 

This is general information, not financial or investment advice. Every property and every investor's situation is different, talk to your accountant or a financial adviser about what applies to you. 

The lessons first-time investors keep coming back to 

• Focus on the numbers, not the "perfect" property. A well-priced, well-let property will usually outperform a prettier one that doesn't stack up financially. 
• The deposit is only the start. Ongoing costs, rates, insurance, maintenance and management fees, catch first-time investors out more than any single factor. 
• Waiting for the perfect moment rarely pays off. Nationwide house prices rose about 31% in the year to August 2021, and even after growth slowed to around 4% by May 2022, prices never gave back that gain. Time in the market has tended to matter more than timing it. 
• The right people make it far less stressful. A lawyer, an accountant and a property manager in place before they're needed, rather than after. 
• Clarity on your own goals makes every decision easier. Cash flow, long-term growth, or both, changes what "the right property" even looks like. 

What a rental actually costs to run

The most common early mistake is not knowing the full cost of ownership beyond the deposit. Typical published averages: a property management fee of 7 to 9% plus GST on gross rent, an annual maintenance budget of around 1% of the property's value, and a national average council rates bill of about $4,000 a year. 

As a worked example: a $650,000 property renting for $600 a week brings in $31,200 gross a year. Take off roughly $2,870 in property management fees, $6,500 in maintenance, $4,000 in rates, around $1,600 in landlord insurance, and about $1,500 for a typical two to three week annual vacancy, and that's before mortgage interest, tax, or your own return even enter the picture. None of these figures are secret, they're publicly available averages, and getting familiar with them early is one of the simplest ways to feel confident about a first investment. 

What they'd do differently next time

Three things come up again and again: clarify your own goals earlier, build your support team before you need one, and spend less time chasing a "perfect" property and more time confirming the fundamentals stack up. New builds also come up often here, they typically carry a 10-year Master Build guarantee and meaningfully lower maintenance in the early years, which removes one variable from the list before you've even settled. 

Practical steps you can start today 

1. Get clear on your goal. Cash flow, long-term growth, or both.
2. Get pre-approved. Turnaround can be as fast as a single day, giving you a real budget to work from, not just your deposit amount.
3. Budget for the full cost of ownership, not just the purchase price: management, maintenance, rates, insurance and vacancy.
4. Build your team early, lawyer, accountant and property manager, before you need one.
5. Start with realistic expectations, rather than waiting for the "perfect" property or the "perfect" time. 

Lending criteria, deposit requirements and pre-approval turnaround vary by bank and individual circumstances. Confirm current timeframes and requirements with a mortgage adviser or your bank. 

Ready to talk it through? 

If you're thinking about your first investment property, we're happy to talk it through, your goals, your budget, and what a realistic first step looks like for you. 

Enquire today. Or download our guide below.

Download the full guide here