You’ve worked hard. You’ve been saving diligently for years — skipping the little luxuries, budgeting, investing, and watching your account balance slowly build. Now, you’re finally ready to make that bold move: buying your first investment property.

But before you dive into the world of property investment, especially in Australia’s dynamic (and sometimes daunting) real estate market, it’s essential to understand what you’re really getting into — financially, mentally, and strategically.

As someone who’s naturally risk-averse, I’ve always believed that buying property for the sake of buying is a recipe for regret. For me, and for many others in similar positions, it’s not just about owning an investment property. It’s about owning the right one.

Location, Location… and Long-Term Thinking

If I’m going to make such a significant financial commitment, I want to ensure it’s in a good location — ideally close to cafes, public transport, schools, hospitals, the CBD, parks — you name it. While the property itself doesn’t need to be flashy or brand new, I do want it to have a high land-to-building value ratio. Why? Because buildings depreciate, but land tends to appreciate.

If you’re not confident navigating the property market, consider using a buyer’s agent. Yes, there’s a cost involved, but their experience can help you avoid expensive mistakes — especially when you’re just starting out.

But even once you’ve found “the one,” the costs don’t stop there.

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The True Costs of Owning an Investment Property in Australia

Here’s a breakdown of the many (sometimes hidden) expenses you need to factor in — from purchase to sale.

Initial Purchase Costs

• Stamp Duty: One of the largest upfront costs. Varies by state and property value.
• Conveyancing/Legal Fees: Typically $800–$2,000 for a professional to handle the legal side of the transaction.
• Building and Pest Inspection: Essential due diligence, often $400–$800.
• Mortgage Establishment Fees: Lender fees can include application fees, valuation fees, and settlement fees.
• Buyer’s Agent Fees (if using one): Can range from 1–3% of the purchase price or a flat fee.

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Holding Costs

Once you’ve bought the property, the ongoing expenses start rolling in.

• Property Management Fees: Usually 5–10% of the weekly rent, depending on the agency.
• Landlord Insurance & Building Insurance: Critical for protecting your asset — typically $300–$1,000+ annually.
• Council Rates: Paid quarterly or annually, can vary widely by council and property type.
• Strata Fees (if buying into an apartment or townhouse complex): These cover building maintenance, insurance, and common areas.
• Utilities: Generally paid by tenants, but you may be responsible if the property is vacant or for shared facilities.
• Repairs and Maintenance: Leaky taps, broken heaters, and unexpected wear and tear — these all add up.
• Accountant Fees: If you’re structuring your investment through a trust or company, or want advice on tax minimisation.

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Exit Costs (When Selling)

At some point, you may decide to sell. Here are the costs to factor in:

• Real Estate Agent Fees: Typically 2–3% of the selling price, plus marketing costs.
• Capital Gains Tax (CGT): If the property has appreciated, you’ll likely owe tax on the profit.
• Renovation/Presentation Costs: You might need to spend on styling or renovations to make the property market-ready.

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Why Treating It Like a Business Is Essential

An investment property is not a set-and-forget purchase. It’s a business. You need to treat it that way from day one.

• Track every expense.
• Review your service providers regularly — whether it’s your property manager, insurer, or accountant.
• Switch providers when they’re no longer offering value.
• Maintain a cash buffer for the unexpected: vacancies, urgent repairs, or interest rate hikes.

Property is an illiquid asset. It’s not like shares where you can click “sell” and be done in minutes. But that illiquidity also works in your favour — it keeps you invested, helps you ride out short-term market noise, and rewards long-term discipline.

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Why Property Might Still Be Right for You

If you like tangible investments, are comfortable servicing debt, and are willing to be hands-on with your finances, property can be a powerful tool in your wealth-building strategy. It allows you to leverage (borrow against) the asset to grow your portfolio, manage it actively to improve returns, and build long-term equity in something real.

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Final Thoughts

Property isn’t for everyone — and it shouldn’t be. It’s expensive, time-consuming, and comes with real risks. But for those willing to do the research, prepare thoroughly, and take a business-minded approach, it can be incredibly rewarding.

Before you leap, make sure you know what you’re signing up for — and always plan with a buffer.

Because owning an investment property isn’t just about bricks and mortar — it’s about building your future with care, confidence, and clarity.

💬 Want a spreadsheet to help you estimate and track your investment property costs?
Comment below and I’ll send it your way!

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