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It is important to be aware of the upfront and ongoing costs associated with holding an investment property when considering your investment strategy.

Arranging finance for an off-the-plan property

When buying off-the-plan it is important to understand that banks will only provide approval in principle for finance. Generally, settlement of the property is too far in the future to approve a loan. Some banks will even pre-approve your finance for 12 months, but still require an update of your information prior to lending you the money and settling the property.

As the property you have purchased nears completion you will be advised of the official settlement date and need to organise your financial arrangements in readiness for settlement.


It is standard real estate practice, whether purchasing-off-the-plan or already constructed, that a deposit (generally 10%) is required upon the contract becoming unconditional. This deposit is usually required within 14 days of the contract date.

Tax depreciation schedule

A professional tax depreciation schedule has the potential of substantially reducing your taxable income. Thus, by claiming these depreciation benefits, you as an investor, can significantly enhance your after-tax return from your investment and generate a healthier cash flow.

Tax benefits

Residential investment properties can be depreciated over many years and can reduce the holding costs for investors whilst they are still acquiring assets to provide for income in later life.
You can claim depreciation of the building from new at its original cost. If you already own property as an investment and it is less than forty years old, you are still able to legitimately claim depreciation benefits on that property. Your tax depreciation report will also detail additional depreciation benefits you are entitled to claim for items such as air-conditioning, carpet, clothes dryers and hot water systems.
In the case of strata titled property, these additional depreciation benefits can also include some of the items in the common areas of the property such as fire extinguishers, gym equipment, closed circuit televisions and monitors, barbeques and so on. All of these items are depreciated over a much faster period of time than the building cost.

Mortgage repayments

When purchasing property off-the-plan in Australia, the mortgage repayments do not commence until after settlement (when construction is complete). This is a great advantage when buying off-the-plan as there is generally 12-18 months before settlement. This provides you with more time to prepare for upcoming repayments.

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