Smart Property Investing in 2025: Expert Advice for First-Time Investors
Taking the leap into property investment is a major financial decision — and one that can deliver excellent long-term rewards when approached strategically. With market conditions shifting across Australia in 2025, it’s more important than ever to do your research, understand your goals, and make informed choices before you begin.
If managed correctly, property investment can help you build real wealth and long-term financial security. Here’s what I advise every first-time investor to consider before getting started.
1. Understand the Commitment — Being a Landlord is Work
Even if you’re purchasing a brand-new home, being a landlord still requires time and effort. From finding and managing tenants to handling maintenance requests, property ownership is more than a “set and forget” investment.
If you’re not comfortable with repairs or day-to-day upkeep, you’ll likely need to engage a property manager — a worthwhile investment, but one that will reduce your overall returns. Think carefully about how hands-on you want to be before committing.
2. Get Financially Ready — Avoid Investing with Debt
Before entering the property market, it’s crucial to have your finances in good shape. As a first-time investor, you’ll be in a stronger position if you’ve cleared any outstanding debts such as car loans, credit cards, or personal loans.
A clean financial slate will make it easier to secure finance, negotiate better rates, and reduce your financial stress once you’ve taken on a mortgage for your investment property.
3. Plan for a Larger Deposit
Unlike purchasing a home to live in, lenders typically require a larger deposit for investment properties — often around 20% of the property’s value. This means you’ll need to budget accordingly and ensure you have adequate savings or equity before making your move.
4. Expect Higher Interest Rates
Investment property loans usually come with slightly higher interest rates than standard owner-occupier loans. When assessing potential properties, make sure your calculations factor in these increased costs to ensure your rental income comfortably covers your mortgage and other expenses.
5. Choose the Right Type of Property
For your first investment, focus on affordable, low-maintenance homes that appeal to a broad range of renters.
A modern three or four-bedroom home with open-plan living areas and functional layouts tends to attract stable tenants such as small families or young professionals. These homes typically offer reliable rental demand and lower running costs — helping to maximise your long-term returns.
👉 Explore our Now Series for ideal first-time investor home designs.
6. Calculate Your Operating Expenses
It’s important to have a realistic understanding of ongoing costs. Typically, operating expenses can range from 35% to 80% of your gross rental income.
As a guide, expect to allocate roughly half of your rental income to cover costs such as:
• Property management fees
• Insurance and council rates
• Repairs and maintenance
• Periods of vacancy
These figures should form part of your initial investment analysis to ensure your property remains profitable, even with a mortgage.
7. Location is Key
Your property’s location can make or break your investment success. Think about who your ideal tenants are and what lifestyle factors matter most to them.
• Families often prefer locations near reputable schools, parks, and local shopping hubs.
• Young professionals typically look for convenience — access to public transport, short commutes, and vibrant dining or entertainment options.
With ongoing infrastructure investment and population growth across regional and suburban NSW, there are plenty of emerging areas worth exploring in 2025.
Ready to Start Your Investment Journey?
If you’re considering building your first investment property, the McDonald Jones Homes team can guide you through every step — from choosing the right home design to selecting a location that aligns with your investment goals.
📞 Call us today on 1300 555 382 or enquire online to discuss how we can help you get started with confidence.