Frequently Asked Questions About Property Investment in Australia

Presm is a property investment platform built for Australians who want to make smarter decisions about real estate. We give you access to calculators, suburb data, portfolio modelling, and AI-powered contract review all in one place. Think of it as your research hub before you buy, hold, or sell an investment property.

Presm is completely FREE for our clients. Every tool, calculator, and insight on the platform is included at no cost. Most platforms charge hundreds of dollars a year for far less. We built Presm because we believe Australian property investors deserve institutional-grade intelligence without the price tag.

Presm is built for anyone looking at property investment in Australia, from first-time investors to experienced portfolio builders. We also work closely with property professionals who use our tools to support their clients.

We pull from a combination of publicly available government datasets, ABS census data, CoreLogic market stats, and proprietary analysis. Our suburb insights combine median prices, rental yields, population growth, infrastructure spending, and vacancy rates to give you a well rounded picture of any area you are researching.

Most platforms either list properties for sale or give you a basic calculator. Presm combines everything into one workflow: you can research suburbs, model cash flow, run Monte Carlo simulations on a portfolio, calculate stamp duty and LMI, and even get AI contract reviews. It is the full picture, not just a listing site.

Start by understanding your borrowing capacity and getting pre-approval from a lender. From there, decide on a strategy (cash flow, capital growth, or a blend), research suburbs that match your budget and goals, and run the numbers properly before making any offers. Our borrowing power calculator is a solid first step to see where you stand financially.

Most lenders require a minimum 10% deposit for investment loans, though 20% is ideal because it lets you avoid lenders mortgage insurance (LMI). On a $600,000 property, that is $60,000 to $120,000 plus stamp duty and legal costs. Some lenders will go as low as 5% for investors, but the LMI cost can be significant. Use our LMI calculator to see exactly what you would pay.

Negative gearing is when your investment property costs more to hold than it earns in rent. The "loss" can be claimed against your other income, which reduces your taxable income and therefore your tax bill. For example, if your property costs $40,000 a year to hold but only earns $30,000 in rent, the $10,000 shortfall can offset your salary income at tax time. It is one of the most widely used tax strategies for Australian property investors.

Capital growth properties are located in areas where prices are expected to rise strongly over time, but they often have lower rental yields, meaning they might cost you money each week to hold. Cash flow positive properties earn more rent than they cost to hold, putting money in your pocket, but they tend to be in regional areas with slower price growth. Most successful investors aim for a blend of both across their portfolio.

It depends on your budget, strategy, and the specific market. Houses generally offer better capital growth because of the land component, and you have more control over the asset. Apartments can offer better rental yields in inner city areas and a lower entry price, but you are subject to strata levies, body corporate decisions, and potential oversupply. Avoid off-the-plan apartments in areas with heavy new development.

Beyond the purchase price, you will need to budget for stamp duty (which varies by state), legal or conveyancing fees ($1,500 to $3,000), building and pest inspections ($500 to $800), loan application fees, LMI if applicable, and potentially property advisory fees. Ongoing costs include council rates, water rates, insurance, property management fees (typically 7% to 10% of rent), maintenance, and land tax. Use our stamp duty calculator to get a clear picture of upfront costs for your state.

Your borrowing capacity depends on your income, existing debts, living expenses, and the number of dependents you have. As a rough guide, most banks will lend 5 to 6 times your gross annual income, but this varies a lot based on your individual situation. Lenders also apply a serviceability buffer (currently 3% above the actual rate) when assessing you. Try our borrowing power calculator to get an estimate based on your numbers.

Yes, but not dollar for dollar. Most lenders will only count 80% of the expected rental income when calculating your serviceability. So if a property rents for $500 per week, the bank will typically use $400 per week in their calculations. This is called "shading" and it accounts for vacancies, management fees, and other costs.

The Australian Prudential Regulation Authority (APRA) requires banks to test whether you can still afford your repayments if interest rates rise by at least 3 percentage points above the rate you are applying for. So if your loan rate is 6.2%, the bank assesses you as if the rate were 9.2%. This is a big reason why borrowing capacity has dropped significantly since 2022, even for high income earners.

Absolutely, and this is how most Australians fund their second property. If your home has increased in value, you can access the "usable equity" (typically up to 80% of the current value minus what you owe) as a deposit and purchase costs for the investment property. You do not need to physically withdraw the money; it is set up as a separate loan split secured against your home.

Lenders mortgage insurance (LMI) is a one-off premium charged when you borrow more than 80% of a property's value. It protects the lender, not you, if you default. The cost can range from a few thousand dollars on a small loan to $30,000+ on larger borrowings with a small deposit. It is usually added to your loan balance. Use our LMI calculator to see the exact cost for your scenario.

When your investment property runs at a loss (expenses exceed rental income), that loss is deducted from your other income, like your salary. If you earn $120,000 and your property makes a $10,000 loss, you are only taxed on $110,000. At a marginal tax rate of 37%, that saves you $3,700 in tax. The benefit is greater for higher income earners because they are in higher tax brackets.

Land tax is an annual state government tax on the unimproved value of land you own (excluding your primary residence in most states). Each state has different thresholds and rates. In NSW, land tax kicks in when your total taxable land value exceeds $1,075,000 (2025–26 threshold). In Victoria, the threshold is $50,000, so it catches most investors. Use our land tax calculator to work out what you will owe.

This depends on your personal situation and goals. Buying in your personal name is simpler and allows you to claim negative gearing losses against your income. A trust structure offers asset protection and flexible income distribution but you cannot pass through losses to beneficiaries. A company structure has its own trade offs. This is a conversation to have with your accountant before you buy, not after, because changing structures later involves stamp duty.

Stamp duty varies significantly by state and property value. As a rough guide, on a $700,000 investment property you would pay around $26,000 in NSW, $38,000 in Victoria, and $18,000 in Queensland. Some states offer concessions for first home buyers but these rarely apply to investment properties. Get exact figures for your state with our stamp duty calculator.

Yes, and it is one of the most overlooked tax benefits for property investors. You can claim depreciation on the building structure (Division 43) and on fixtures and fittings like carpet, blinds, and appliances (Division 40). For properties built after 1985, this can add up to thousands of dollars in tax deductions each year. You will need a quantity surveyor to prepare a depreciation schedule, which typically costs $600 to $800 and is itself tax deductible.

Our stamp duty calculator covers every Australian state and territory. You enter the purchase price, select your state, and choose the buyer type (investor, first home buyer, or owner occupier). It calculates the exact stamp duty using the current legislative rates, plus any applicable surcharges for foreign buyers. It also shows transfer fees and total government costs so there are no surprises at settlement.

The Rentvesting Calculator compares two scenarios side by side: buying your own home versus renting where you want to live while investing elsewhere. It models your net wealth over 10, 20, or 30 years, factoring in capital growth rates, rental yields, tax benefits, and opportunity cost. For many Australians in expensive cities like Sydney and Melbourne, rentvesting can build significantly more wealth.

Our Borrowing Power calculator estimates how much you can borrow based on your income, expenses, existing debts, and the number of dependents you have. It applies the current APRA 3% serviceability buffer and factors in rental income shading, so you get a realistic figure rather than an optimistic guess. It is the best starting point for any property investment journey.

The Entity Land Tax Simulator lets you compare land tax across different ownership structures: individual, company, trust, and SMSF. Each state applies different thresholds and rates depending on the entity type, and this tool shows you exactly how much you would pay under each structure so you can make an informed decision before purchasing.

Rentvesting means renting the home you live in (usually in an expensive area you love) while buying investment property in a more affordable area with better yields or growth potential. It is a great strategy for people who want to live in inner city Sydney or Melbourne but cannot afford to buy there, or who would rather invest where the numbers stack up. The trade off is you do not get the principal place of residence capital gains tax exemption on your investment, but you do get negative gearing and depreciation benefits. Use our Rentvesting Calculator to see if it makes sense for your situation.

Treasury's 2026-27 Budget replaces the 50% CGT discount with a cost-base indexation method plus a 30% minimum tax on real capital gains (from 1 July 2027 for individuals, trusts and partnerships; super funds and companies are unaffected). Negative gearing on established residential property will be limited to new builds for acquisitions after 7:30 PM AEST on 12 May 2026. Discretionary trusts will face a 30% trustee minimum tax from 1 July 2028. To see exactly what these changes cost YOUR portfolio side-by-side against current law, open the Tax Reform Lens. Real ATO math, no signup required.

There is no magic number because it depends on your target retirement income, the value of your properties, how much debt you carry, and your rental yields. As a general guide, many financial planners suggest a fully paid off portfolio generating $100,000 to $150,000 per year in rental income, which might look like 3 to 5 properties worth $600,000 to $1,000,000 each, fully paid off. The key is to model it properly using our Loan Repayment Calculator and Borrowing Power calculator rather than relying on rules of thumb.

Look for suburbs with strong population growth, infrastructure spending (new train lines, hospitals, shopping centres), low vacancy rates (under 2%), diverse employment bases, and a healthy mix of owner occupiers and renters. Avoid areas heavily dependent on a single industry or with oversupply of new apartments. Historical capital growth above 6% per annum and gross rental yields above 4% are solid indicators, but always do your own due diligence on the specific suburb.

Early in your investing timeline, capital growth is usually more important because it builds equity that you can leverage to buy additional properties. As your portfolio matures and you approach retirement, shifting towards cash flow makes more sense so you can service your lifestyle without selling assets. Most seasoned investors end up with a mix: growth properties in metro areas and cash flow properties in strong regional centres.

The typical approach is to buy your first investment property, wait for it to grow in value (usually 2 to 5 years), access the equity, and use that as a deposit for property number two. Repeat the cycle. The key constraints are your borrowing capacity (which tightens with each purchase) and your ability to hold properties through market cycles without being forced to sell. Having a buffer of 3 to 6 months of expenses in cash is essential. Start by checking your Borrowing Power to see how much room you have for your next purchase.