Your first investment property is the one you learn the most from, and the one where the order of things matters most. I have walked people through it since 1997. The steps below are the ones I take them through, in the order I take them, because each one shapes the next.
1. Find out what is possible
The first, and responsible, thing to do is establish your borrowing capacity. Not the figure a calculator gives you on a Sunday night: the figure a lender will stand behind. Lenders test your income against a rate three percentage points above the loan’s own rate, the buffer APRA kept in place on 28 May 2026, so the answer is often lower than people expect. That figure comes before any property. I explain how lenders arrive at it in How much can you borrow?.
2. Work out what it costs you each week
Every investment property has a weekly position: what the rent pays, what tax pays, and what you pay. Some carry themselves. Most cost their owner something in the early years. The question is not whether it costs you, it is whether the amount suits your life for the years you will hold it.
3. Decide whose name it goes in
This is the step most first investors skip, and the one that is hardest to undo. Whoever is on the title claims the deductions while you hold it and carries the gain when you sell. Changing it afterwards usually means stamp duty and capital gains tax. I cover it in Own name, joint names or a trust?.
4. Choose the area, then the property
Real estate is the land, and the land is where the growth comes from. So the area comes first: jobs, transport, supply and who rents there. Only then the property, and whether it suits the tenants that area attracts.
5. The contract
I read contracts with people before they sign, and I have read hundreds. Finance dates, building and pest conditions, and on a build the progress payments and what is fixed and what is not. A solicitor acts for you on the contract; my part is helping you comprehend what it says and what it means for you.
6. Finance, settlement and the first tenant
Formal approval, a valuation, then settlement. Before the keys arrive, the rental manager is lined up and a depreciation schedule is ordered from a quantity surveyor. On most new homes the schedule pays for itself in the first year.
7. Look at it again every year
Your first investment property is not a one-off decision. Rents rise, rates move, your income changes. Each year I look at where it stands with the owner, and whether it has built enough equity to help with the next one.
Mia, 31, found a townhouse she loved, paid for a building inspection and then asked her bank what she could borrow. The answer was $90,000 short. She lost the inspection fee and three months.
Her brother Sam started at step 1. He knew his figure, then his weekly comfort, then looked only at homes inside both. He bought in eight weeks. Same income, same market; a different order.
Who this does not suit
Someone with no buffer of savings, or whose income is about to change, may be better served by waiting a year and getting ready. Waiting with a plan is not the same as putting it off.
Nicholas Lockhart
General information only. No advice is given.
Source: APRA, APRA maintains current macroprudential policy settings, 28 May 2026.