Thinking about buying your first investment property?
If you already own a home, you’re closer than you think.
Most first-time investors don’t start with a big savings account. They start with equity in their existing home, a clear borrowing strategy, and the right loan structure from day one.
In this guide, we’ll walk through:
- Whether you can afford an investment property
- How deposits actually work (and how to avoid using cash)
- What lenders look for
- How to structure your loan properly
If you want the full breakdown upfront, you can access our First Investment Property Guide here:
https://shorelinelending.com.au/first-time-property-investor-guide/
Can you afford an investment property?
This is where most people get it wrong.
It’s not just about your income. Lenders look at:
- Your existing debts
- Living expenses
- Financial conduct (bank statements matter more than people think)
- Rental income assumptions
Even if you feel comfortable financially, that doesn’t always translate to borrowing capacity.
👉 If you haven’t already, read this:
What banks look for in your bank statements
https://shorelinelending.com.au/banks-check-bank-statements-home-loans/
That’s often the difference between approval and decline.
Do you need a deposit?
There are two ways to fund an investment purchase:
1. Cash deposit
Typically:
- 10–20% of the purchase price
- Plus stamp duty and costs
This is the traditional path.
2. Using equity instead
This is how most first-time investors actually get started.
If you already own a property, you may be able to:
- Access equity
- Use it as your deposit
- Avoid saving cash altogether
👉 We break this down properly here:
Using equity to invest
https://shorelinelending.com.au/using-equity-to-invest/
Using equity to buy your first investment property
Equity is simply the difference between:
- What your property is worth
- What you owe on it
Lenders will often allow access up to 80% of the property value.
The usable portion can then be:
- Released as a separate loan
- Used for deposit and purchase costs
Done properly, this means:
- No cash savings required
- Cleaner tax structure
- Better long-term flexibility
Done poorly, it creates a mess.
This is where structure matters.
What does it actually cost to buy an investment property?
Most people underestimate this.
You’re not just covering the deposit. You need to allow for:
- Stamp duty
- Legal and conveyancing
- Loan setup costs
- Buffer for vacancies or rate changes
If you rely purely on rough estimates, you’ll either:
- Stretch too far
- Or miss opportunities
We’ll map this out properly as part of the strategy.
Loan structure (this is where most investors get it wrong)
This is one of the biggest mistakes we see.
Your loan should not be:
- One lump sum
- Blended across properties
Instead, it should be structured clearly with:
- Separate splits
- Clear purpose for each loan
- Flexibility for future purchases
This impacts:
- Tax deductibility
- Borrowing capacity
- Future investment options
We also look at:
- Interest only vs principal and interest
- Offset vs redraw
- How to keep your structure clean long term
What banks actually look at
This is where deals fall over.
Lenders don’t just look at your application. They look at behaviour.
Key areas:
- Income stability
- Expense consistency
- Existing liabilities
- Bank statement conduct
Common issues we see:
- Undisclosed debts
- Buy now pay later stacking
- Irregular spending patterns
👉 If you want to understand this properly, read:
https://shorelinelending.com.au/banks-check-bank-statements-home-loans/
Common mistakes first-time investors make
Be careful here. These are expensive errors.
- Overestimating borrowing capacity
- Using the wrong loan structure
- Not factoring full purchase costs
- Buying based on emotion instead of strategy
- Trying to do everything without advice
Most of these don’t show up immediately. They show up later when you try to buy again.
Strategy matters more than the property
The property matters. But the strategy matters more.
We’re looking at:
- Long-term portfolio growth
- Flexibility for future purchases
- Managing risk properly
A good first investment should:
- Put you in a stronger position for the next one
- Not box you in financially
We Can Help You Make the Right Move
Buying your first investment property is not just about getting approved.
It’s about setting it up properly from day one so you don’t limit your next move.
We work with:
- First-time investors
- Homeowners looking to use equity
- Clients building long-term property portfolios
Your next step
If you want clarity before you make a move:
👉 Book a quick strategy call
https://shorelinelending.com.au/book-an-appointment/
Or
👉 Get in touch here
https://shorelinelending.com.au/contact/