How to Navigate Property Investment Services for Beginners
Key Takeaways
Understand the different property investment services before choosing providers.
Watch out for red flags like high-pressure sales tactics and “guaranteed” returns.
Build a strong investment team gradually to support long-term success.
Disclaimer: This content does not constitute financial advice. The article below is for the readers’ information and education only. The writers at Friendly Finance are not financial advisors and are therefore not authorised to offer financial advice. Friendly Finance recommends our readers always do their research and seek independent advice as needed.
Are you ready to be part of the 2.2 million Australians already in the property investment game?
Property investing seems like a big challenge when you first get started. On the one hand, there are hundreds of property investment services, advisors and options shouting for your attention. On the other hand, you have a blank slate and no idea what's coming.
And you might be worrying that you are about to make the same expensive rookie mistakes that other newbies make…
How can you really know which mortgage works best for investors?
How do you choose the services that will get you started – and avoid those trying to bleed you dry?
Sound familiar?
The thing is, navigating property investment services doesn't have to be difficult.
What you'll learn:
Understanding the Different Property Investment Services
The first step to choosing the best property investment services is understanding what each one does.
The truth is, some property investment services are very good. Many are not.
Here are the main types of property investment services you'll encounter:
The first property investment service that many beginners need is mortgage assistance.
Property investment requires more strategic financing than just buying a house to live in. Partnering with the best mortgage fund Australia has to offer can help you structure the right mortgage to buy the right property for the right price and be set up to make money, rather than financial disaster.
Buyer's agents can help you find and purchase investment properties. A good buyer's agent has access to off-market deals not advertised to the public. A bad buyer's agent will try to sell you a property that pays the highest commission.
Property managers take care of the day-to-day tasks of managing your investment property and looking after tenants. Good property managers keep vacancy rates low and generate satisfied renters who stay in your property. Property managers are very in-demand these days because new investor lending jumped 29.5% in 2024.
Financial advisors help you to structure your investment strategy and advise how property investment will fit into your overall wealth-building plan.
But wait…
Some companies offer all of these services in one bundle. They promise to take care of everything from sourcing your property to managing it afterwards.
Here's the problem with that…
Conflict of interest.
When the same company profits from each part of your transaction, they might not always give you advice that is in your best interests.
How Investment Mortgages Actually Work
It was mentioned the first property investment service that beginners usually need is mortgage assistance.
It's also important to note that most people are totally wrong about how investment mortgages work.
Here's the reality…
Investment mortgages are different. Interest rates are higher. Deposit requirements are stricter. The whole application process is more intensive.
Let's start with interest rates.
Investment properties will always cost you more to borrow. At the moment interest rates for investment property are around 0.3% to 0.6% higher than owner-occupied property. This might not sound like a lot. But over a 30-year loan term it can add up to tens of thousands of dollars in additional interest.
Deposit requirements are also higher. First-home buyers can get away with a 5% deposit, but the minimum for investment property is usually at least 20%.
Loan structures are important too. Most property investors use interest-only loans to increase their upfront tax deductions. But these loans eventually convert to principal and interest, and you'll see your repayments increase accordingly.
The point is, you need to know how different features of investment mortgages affect your cashflow and tax position.
Red Flags To Watch Out For
Now let's talk about how to spot dodgy property investment services before they rip you off…
There are a few big red flags that should make you think hard before you choose any service provider.
High-pressure sales tactics.
Any service provider that is trying to hurry you into making decisions or taking the next step is almost certainly more interested in their own commission than your long-term success.
Guaranteed returns.
If someone is promising you a 20% annual return on your investment they are either stupid or lying. Property markets go up and down and anyone guaranteeing your investment returns is lying to you. Guaranteed returns on your property investment is an obvious sign you're dealing with a scammer.
Upfront fees without any work being done.
Legitimate property investment services get paid when they deliver results. You should be able to see and understand exactly how a service provider makes money. If you're being asked to pay fees upfront before any work has even started, run the other way.
Recommendations from "property investment seminars".
Yes, there are unscrupulous people who hold property investment seminars that use high-pressure sales tactics to sell expensive courses you don't need.
The point is, the best property investment services are the ones who don't need to market to you in the first place. They are too busy helping their existing clients to make more money.
Building Your Investment Team
Smart property investors don't use one service provider for all their needs.
They build a team of specialists who excel in their specific areas.
Your core team should include:
A mortgage broker who specializes in investment lending.
An accountant who is savvy with property investment tax strategies.
A buyer's agent (if you are using one) who specializes in investment properties and your target areas.
A property manager for each region you own properties in who has a good track record of low vacancy rates and happy tenants.
A financial advisor who can help you weave property investing into your broader wealth-building strategy.
But wait…
You don't need to hire all of these people straight away. Build your team gradually as your portfolio grows. Start with a quality mortgage broker and accountant. Add to your team as you have need.
Common Beginner Mistakes To Avoid
It should be clear that even with the right services beginners make some very predictable mistakes.
Here are the big ones:
Buying in the wrong location because you "fell in love" with a particular property. Remember, you are buying an investment, not a home.
Underestimating costs above and beyond the mortgage. Stamp duty, legal fees, insurance, maintenance, etc.
Not having enough cash reserves for vacancy periods, major repairs and emergencies. Successful investors have six months of expenses in reserve as a minimum.
Choosing property investment services based on price. Cheap services will turn out to be very expensive when they don't deliver.
The number one rookie mistake though…
Thinking it's too hard to even get started.
The Smart Way To Get Started
So, you want to navigate property investment services like a pro?
Here's your step-by-step action plan:
Step 1: Get your finances in order. Know how much you can afford to invest in terms of deposits, ongoing costs and so on.
Step 2: Educate yourself about your target property markets. Understand the drivers of property values and rental demand.
Step 3: Interview several service providers before you choose anyone. Ask tough questions about their experience, track record and fees.
Step 4: Start small. Buy one property and learn the process before scaling up.
Step 5: Build long-term relationships with quality service providers over time. Referrals from successful investors are the best way to find them.
Navigating property investment services doesn't have to be challenging.
The key is to know what each service does, understand how to separate the good ones from the bad ones and build a team that will work in your best interests.
With almost one-third of investors planning to buy property in 2025, there's never been a better time to get your investment strategy right.
But don't forget, property investing is a marathon, not a sprint. Spend time getting to know and choose the right services and they'll help you build wealth for many years to come.
The smartest property investors know the secret to success is not about finding the perfect property. It's about building the right team to help you make the right decisions consistently.
