How to prepare now for a 2023 property investment purchase

For those wanting to buy real estate in 2023, now is the time to get everything in order, including budgets, finances and research.

Modern houses and townhouse on suburban street.
Buying a new property offers property investors greater depreciation benefits. (Image source:

While rising interest rates and property prices may have scared off some would-be investors, 2023 is the ideal time for buyers to make their first foray into the market.

Despite recent rises, interest rates still remain low and, as they compete to secure a bigger share of the mortgage market, many banks are offering competitive rates for those with a decent deposit.

For those wanting to buy in 2023, now is the time to get everything in order.

Australians have extraordinarily high levels of savings in the bank, three times what they were at the start of the pandemic, so it’s the ideal time to put that to work by growing future wealth, rather than the short-term gain of an overseas holiday.

The first step prospective investors need to make is to get their finances in order. That means saving a deposit and putting in place a budget.

A good detox kickstart could involve cancelling all of your credit and debit cards. That will put a stop to all of the direct debits and when retailers contact you to re-establish the withdrawals you can weigh up whether it is something you actually want.

As inconvenient as it can be having to re-establish them all, it can help would be investors unlock plenty of cash that was going to waste on multiple streaming services or unused gyms memberships.

When it is finally time to buy, the most important thing to do is shop around. Many first-time investors immediately go to one of the big four banks, but a good mortgage broker can save investors hundreds of dollars a month by finding the best rate and a deal that suits their circumstances.

It’s also important to assemble a team before finding a property. In the current market, moving fast is important so it’s worthwhile spending time finding a property lawyer, property management agent and insurance broker to help things move quickly once the right property comes up.

Affordable investment options

It can seem like prices are constantly rising and that investors need to have a lot of money to get into the market but that’s not the case.

There are still plenty of suburbs that offer good investment opportunities to “mum and dad” investors.

The most important thing to keep in mind when selecting an investment location is to ensure it is close to major employers.

Hospitals, schools, education facilities, and large retail centres all employ hundreds (if not thousands) of people who want to rent near where they work, so buying in an area close to some of these facilities is a great starting point.

Do some research about vacancy rates, what average rents are in the suburb and also what the local demographics are showing.

This will narrow your investment property search down and allow you to invest in something in demand that will be rented quickly.

Cash flow is king

The biggest risk for investors is cash flow. Good property will grow in value over time, but you’ve got to be able to get by in the process.

Therefore, it’s important the property pays for itself out of the rent or tax refunds afforded by negative gearing.

Do some research about vacancy rates and try to ensure the rent you are wanting to charge doesn’t exceed 30 per cent of the average household income in an area. This ensures you will have a high occupancy rate and access to tenants that pay on time.

New property offers the best tax deductions (you can depreciate 100 per cent of the house cost), lowest maintenance costs, and are generally more in demand than older properties.

With the average Australian paying more than $20,000 in tax each year, it makes sense to try and get some of that tax back to assist with the cost of your investment property.

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