Can I Afford An Investment Property? Here’s How to Find Out
“Can I actually afford an investment property?” It’s one of the most common questions we hear, and the truth is, more people can get started than they think. If you’ve been wondering whether you’ve got what it takes financially to step into the world of property investment, this blog is for you. Let’s break it down.
It Starts with a Pre-Approval
The very first step is getting a mortgage pre-approval. This gives you a clear idea of how much a bank is willing to lend you based on your income, debt levels, and financial position. A pre-approval is free, there’s no obligation, and it gives you a price range to work with. Instead of guessing or holding back, you’ll know exactly what’s possible.
Already Own a Home? You May Not Need a Cash Deposit
If you’re a homeowner, you’re already halfway there. That’s because you may be able to use the equity in your existing property as the deposit for your investment property. Equity is the difference between what your home is worth and what you still owe on the mortgage. It’s like unlocked potential - funds that are sitting inside your current property, ready to be leveraged. Let’s say your home is worth $850,000 and you owe $550,000 on the mortgage. That means you have $300,000 in equity - and potentially a portion of that can be used as your deposit for your next purchase.
Pre-Approval + Equity = Your Starting Point
These two tools - a pre-approval and your home equity - are what open the door to becoming a property investor. Banks will look at the strength of your existing home loan, your overall debt, and the potential rental income from the investment property when assessing affordability. But many first-time investors are surprised to learn that they don’t need to save a massive deposit or have a high income to get started. What matters more is having a clear plan, working with the right mortgage adviser, and choosing the right type of property - whether it’s a new build townhouse or an off-plan opportunity with strong rental demand.
So… Can You Afford an Investment Property?
Maybe, you won’t know until you run the numbers. That’s where we come in. At SM Property, we help buyers assess their position, explore finance options, and map out a clear path into property investment. You don’t need to have all the answers, just take the first step. Whether you’re sitting on equity or just getting started, let’s have a chat about what’s possible. With the right structure and support, your first investment property might be closer than you think. Get in touch with SM Property today - let’s build your future in property.
