This is one of the most searched questions in Australian property investment — and one of the most misunderstood.
Most people assume the number is enormous. They picture a six-figure sum sitting in a savings account before they can even begin. That assumption stops a lot of people from ever starting.
The reality is more nuanced — and more encouraging.
Yes, property investment requires real money. But how much you need depends on factors most guides never fully explain: the property price, the state you buy in, your existing assets, your income, and the strategy you choose.
This guide breaks it all down clearly. By the end, you will know exactly what you need, what your options are, and what the real path to getting started looks like.
The Short Answer
For most Australian investors entering the market with a standard residential investment property, you need to budget for approximately 25–27% of the purchase price in total upfront funds.
That covers your deposit plus all purchase costs.
Here is how that looks across different price points:
| Property Price | 20% Deposit | Purchase Costs (est.) | Total Funds Required |
| $500,000 | $100,000 | $25,000–$30,000 | $125,000–$130,000 |
| $600,000 | $120,000 | $28,000–$35,000 | $148,000–$155,000 |
| $700,000 | $140,000 | $32,000–$40,000 | $172,000–$180,000 |
| $800,000 | $160,000 | $36,000–$45,000 | $196,000–$205,000 |
Figures are approximate. Purchase costs vary significantly by state due to stamp duty differences. Always confirm exact figures with your accountant and conveyancer.
What Makes Up the Total Cost?
There are two buckets of money you need to understand: your deposit and your purchase costs. They are separate, and both must come from your own funds.
The Deposit
Lenders in Australia generally require a deposit of at least 20% of the purchase price for an investment property. This is the standard threshold that allows you to avoid Lenders Mortgage Insurance (LMI) and access better interest rates.
A lower Loan-to-Value Ratio — which a higher deposit creates — reduces the lender’s risk and can help you access more competitive loan options.
It is possible to enter with a smaller deposit — some lenders accept 10% — but this comes with trade-offs we will cover shortly.
Purchase Costs
On top of your deposit, you need to budget for a range of additional costs that must be paid at or before settlement. These cannot be added to your loan.
Stamp duty is the biggest one. It is a state government tax on property transfers and it varies significantly depending on where you buy.
Stamp duty on investment properties ranges from roughly 3.5% to over 5.5% of the purchase price depending on the state and property value, and there are almost no investor concessions available — first home buyer and owner-occupier discounts generally do not apply to investment purchases.
Here is a rough guide to stamp duty on a $600,000 investment property by state:
| State | Approximate Stamp Duty |
| NSW | $22,000–$24,000 |
| VIC | $31,000+ |
| QLD | $12,000–$15,000 |
| SA | ~$26,000 |
| WA | ~$19,000 |
Always verify current rates with your solicitor or state revenue office.
Conveyancing and legal fees cover the contract review, title search, and settlement process. Budget $1,500–$3,000.
Building and pest inspection is essential for established properties. Typically $400–$700, this protects you from buying a property with hidden defects.
Loan establishment fees vary by lender but are typically $300–$600.
Tax depreciation schedule — prepared by a qualified quantity surveyor — costs $600–$900 upfront but can return thousands in tax savings each year. Essential for new or near-new properties.
Property valuation may be charged by the lender. Typically $200–$600.
What If You Cannot Save a 20% Deposit?
A 20% deposit is the ideal starting point, but it is not the only path. Here are three legitimate alternatives.
Option 1: Use Equity From an Existing Property
If you already own a home or investment property, you may already have the funds you need — you just cannot see them yet.
Equity is the difference between the current value of your home and the amount you still owe on your mortgage. Most lenders allow you to access up to 80% of your property’s value, minus your existing loan balance — and that usable equity can be used as a deposit on an investment property.
Here is how the calculation works:
Example:
- Your home is worth $800,000
- Your outstanding mortgage is $400,000
- Your total equity is $400,000
- 80% of $800,000 = $640,000
- Minus your loan of $400,000 = $240,000 in usable equity
A useful rule of thumb is the “Rule of Four” — your maximum purchase price is approximately four times your usable equity. So $100,000 in usable equity could support a $400,000 property purchase, allocating 20% for the deposit and leaving a buffer for purchase costs.
This strategy lets many homeowners enter the investment market without saving a fresh deposit from scratch.
Option 2: Use Lenders Mortgage Insurance (LMI) to Enter Sooner
It is still possible to buy an investment property in Australia with a 10% deposit — and some lenders may go as low as 5% — however this typically requires paying Lenders Mortgage Insurance.
LMI is a one-off insurance premium that protects the lender (not you) if you default on your loan. It is usually required when your Loan-to-Value Ratio is above 80%, and the cost depends on your loan amount, LVR, and whether the property is for investment or owner-occupation.
For a $600,000 investment property with a 10% deposit, LMI can add $13,000–$20,000 or more to your costs. That is a real expense — but for some investors, paying LMI to enter the market earlier makes financial sense, particularly if the market is rising and delay would cost more than the insurance premium.
Whether LMI is the right choice depends on your personal circumstances, timeline, and the specific market you are entering. This is exactly the kind of decision worth working through with a qualified property advisor and finance broker before committing.
Option 3: Invest Through an SMSF
If you have superannuation savings and are considering long-term property investment, a Self-Managed Super Fund (SMSF) can be used to purchase investment property under specific conditions.
This is a more complex strategy with strict rules and compliance requirements — but for the right investor, it can be a powerful way to build property wealth inside super, with tax advantages specific to the super environment.
YPP’s accounting and financial planning partners can establish and manage your SMSF as part of an integrated investment strategy.
Real Numbers: What Does It Actually Cost to Get Started?
Let us put real figures on three realistic entry scenarios for 2025.
Scenario 1: First-Time Investor, Brisbane, $550,000 New House and Land
Brisbane’s median house price has seen extraordinary growth, rising 86.1% over the past five years. However, new house and land packages in strategic growth corridors around Brisbane can still be found in the $500,000–$600,000 range — offering strong growth potential and excellent depreciation benefits.
- Deposit (20%): $110,000
- Stamp duty (QLD, approx.): $13,000
- Conveyancing and legal: $2,000
- Building and pest inspection: $600
- Depreciation schedule: $700
- Loan establishment fees: $500
- Total funds required: approximately $127,000
Scenario 2: Investor Using Equity, Sydney, $750,000 Established Property
- Home value: $900,000
- Outstanding mortgage: $400,000
- Usable equity (80% of value minus loan): $320,000
- Deposit required (20% of $750,000): $150,000
- Stamp duty (NSW, approx.): $29,000
- Other purchase costs: $6,000
- Total funds required from equity: approximately $185,000
- Cash savings required: $0 (equity covers all costs)
Scenario 3: Investor with 10% Deposit, Melbourne, $650,000 Property
- Deposit (10%): $65,000
- LMI (approximate): $16,000
- Stamp duty (VIC, approx.): $34,000
- Other purchase costs: $5,000
- Total funds required: approximately $120,000
Note: LMI can often be added to the loan rather than paid upfront, reducing the immediate cash requirement.
Ongoing Costs: What You Need to Budget for After You Buy
The upfront costs are only part of the picture. Once you own the property, there are ongoing holding costs to account for.
Mortgage repayments. This is the largest ongoing cost. On a $480,000 loan (80% of $600,000) at 6.5% interest-only, monthly repayments are approximately $2,600.
Property management fees. A professional property manager typically charges 7–10% of weekly rental income. On $500 per week rent, that is $35–$50 per week — fully tax deductible.
Council rates. Typically $1,200–$2,000 per year depending on location and property type.
Water rates. Varies by state and property. Budget $800–$1,500 per year.
Landlord insurance. Typically $1,200–$2,000 per year. Protects you against rental default, damage, and public liability.
Maintenance and repairs. Budget approximately 1% of the property value per year for ongoing maintenance. For a $600,000 property, that is $6,000 per year as a conservative buffer.
Land tax. Applicable on investment properties in most states above a certain threshold. Rates and thresholds vary by state — your accountant should factor this in.
The good news: most of these costs are tax deductible. Mortgage interest, property management fees, council rates, insurance, maintenance, and depreciation can all reduce your taxable income — which is one of the key advantages of Australian property investment.
How Much Do You Need to Live On While Investing?
One thing most property investment guides completely skip: your personal cash flow.
After all your property holding costs are accounted for — including the mortgage, rates, insurance, and management fees — you need to be able to comfortably cover:
- Your own rent or home mortgage
- Your living expenses
- A cash buffer for unexpected costs
A good rule of thumb is to hold a cash buffer of three to six months’ worth of total holding costs before you buy. For most investors, this means keeping $20,000–$40,000 in accessible savings beyond what you use for the purchase.
This protects you against unexpected vacancies, emergency repairs, or changes in your personal income without forcing a rushed sale.
This is one of the things YPP spends real time on during the planning phase. It is not enough to know you can afford the deposit. You need to know you can comfortably hold the property through all conditions — which requires modelling your complete cash flow, not just the purchase transaction.
Does the Type of Property Change How Much You Need?
Yes — significantly.
New properties tend to require less cash for maintenance in the early years and come with builder warranties. They also offer strong depreciation benefits, which reduce your tax bill and improve your net cash flow. These factors can partially offset a higher purchase price.
Established properties may be available at lower price points in some locations, which reduces the deposit requirement. However, older properties typically require more maintenance and offer lower depreciation benefits.
Off-the-plan properties (units and apartments in high-density developments) often allow smaller deposits to be held in trust during construction — sometimes just 10%. However, YPP’s position is clear: off-the-plan units in high-density developments are generally poor investment choices. They often fail to grow in value, which prevents investors from building equity and buying their next property. YPP’s principle applies here: “If we wouldn’t invest, we won’t suggest.”
House and land packages in growth corridors are a strong option for first-time investors. They combine the tax benefits of a new property with competitive pricing in areas with strong population and rental demand.
What Competitors Miss: The Real Barriers to Starting
Most property investment content focuses on the numbers. Here is what they miss.
The gap between “qualifying” and “being ready.” You might technically have enough for a deposit, but are your cash buffers in place? Is your income stable enough to comfortably service the loan? Is your entity structure set up correctly? These are the questions that determine whether your investment goes smoothly or creates stress.
The emotional cost of getting it wrong. Buying the wrong property, in the wrong location, with the wrong loan structure is far more expensive than the cost of professional advice. One poor property decision can cost years of growth and tens of thousands of dollars.
The cost of waiting. Every year you delay entering the market is a year of potential capital growth you miss. Brisbane property values have risen 86.1% over the past five years, while Adelaide has surged 79.9%. Australians who invested in these cities a decade ago did not need perfect timing — they needed a starting point.
The options available to people who already own property. Thousands of Australian homeowners have enough usable equity to invest right now — without saving a single additional dollar. Most do not know it. A simple conversation with a qualified advisor can reveal options that were invisible before.
How YPP Approaches This Question
At Your Property People, this question — “How much do I need?” — is almost always the starting point of the conversation.
The answer is different for every person. It depends on your income, your savings, your existing assets, the location and type of property you are targeting, and the state you buy in.
What YPP does is work through those numbers with you — clearly, honestly, and without pressure. The goal of the initial discovery session is not to sell you a property. It is to understand your real financial position and show you what is genuinely achievable from where you are right now.
Some people discover they are ready sooner than they thought. Others need six to twelve months of preparation first. Either way, you leave with a clear picture.
YPP’s results speak for themselves: a mean annual growth rate of 12.9% and mean rental yield of 6.5% across their properties, 100% tenancy rate, and 72% of clients reinvesting after their first purchase.
That kind of outcome starts with one honest conversation about the numbers.
Frequently Asked Questions
How much deposit do I need for an investment property in Australia? The standard deposit is 20% of the purchase price. This avoids Lenders Mortgage Insurance and gives you access to better interest rates. It is possible to enter with a 10% deposit, but LMI will apply and add to your costs.
What is Lenders Mortgage Insurance (LMI)? LMI is a one-off insurance premium that protects the lender if you default on your loan. It is required when your Loan-to-Value Ratio exceeds 80% — in other words, when your deposit is less than 20% of the property’s value. It protects the lender, not you. Costs vary but can range from $10,000 to $25,000 or more depending on the property value and loan size.
Can I use equity from my home to invest? Yes. Many investors get started by accessing the equity in their home to use as a deposit on an investment property. Banks are generally comfortable lending up to 80% of your home’s value, minus what you still owe — and that usable equity can be directed toward your investment purchase.
What is the minimum amount I need to start investing in property in Australia? There is no universal minimum. The total amount depends on the property price, state, and strategy. As a rough guide, budget for 25–27% of your target purchase price in total upfront funds — covering deposit, stamp duty, and other costs. For a $500,000 property, that is approximately $125,000–$135,000.
Do I need to pay stamp duty on an investment property? Yes. Stamp duty is the single largest transaction cost most property investors pay — often more than five years of loan interest in some states. There are almost no investor concessions, and it must come from your own cash reserves, not your loan.
Is it better to save a bigger deposit or enter the market sooner? This depends on market conditions and your personal position. In markets experiencing strong capital growth, entering sooner — even with a smaller deposit and LMI — can outperform waiting. In flatter markets, the cost of LMI may not be justified. A qualified property advisor can help you model the numbers for your specific situation.
What ongoing costs should I budget for after buying? The main ongoing costs are mortgage repayments, property management fees (7–10% of rent), council rates, water rates, landlord insurance, maintenance, and land tax. Most of these are tax deductible against rental income.
Can I invest in property on a single income? Yes, many Australians do. Your borrowing capacity, savings rate, and whether you have existing equity all play a role. A finance broker can confirm what is achievable based on your specific income and expenses.
Does Your Property People offer a free consultation? Yes. YPP offers a free discovery session where they review your financial position, explain your options, and build a picture of what is genuinely achievable for you. There is no obligation and no pressure to proceed.
Final Thoughts
The question “how much do I need?” deserves a real answer — not a vague figure designed to seem accessible, and not a number so large it discourages people before they start.
The truth is somewhere in the middle.
Property investment requires meaningful capital. But it is more accessible than most people assume — especially for homeowners with equity, or for those prepared to enter with a smaller deposit and the right professional guidance.
What matters most is not having a perfect amount of money. It is having an accurate picture of your position, a clear plan, and the right people around you.
That is exactly what Your Property People are here to provide.
Take the first step. Book a free discovery session with Your Property People and find out exactly what is achievable from where you are right now. Visit yourpropertypeople.com.au to get in touch.
Disclaimer: This article is for general informational purposes only and does not constitute financial, legal, or tax advice. Property investment involves risk. All figures are approximate and subject to change. Always seek advice from qualified professionals including a licensed financial adviser, mortgage broker, and accountant before making investment decisions.