Expert Advice with Lindy Lear. 10/07/2016

This month I want to cover the top 10 FAQ’s I regularly receive from new investors. It is a difficult voyage for a new investor to navigate the vast ocean of information that is available so read on for more confidence to get started.

What is the first step to get started?

Have a financial healthcheck from a broker and find out what your borrowing capacity is. The next  step is your  strategy plan. Surprisingly looking for a property is not the first step! You need a strategy first that will suit your individual circumstances and goals.

What property strategy will suit me best?

There are many different strategies that can be used to create profit with property. For first time investors I recommend a low risk, hands off, buy and hold strategy that suits most investors.

How much research do I need to do?

Endless research may leave you confused and overwhelmed. Don’t try to reinvent the wheel.  Seek help and ask for expert advice and research information as to where to buy, what to buy and how to go about it.  

Should I get property advice and mentoring?

Paying thousands of dollars for advice and mentoring could leave you short of cash for your deposit.  For first time investors find someone you trust who has been successful in your chosen strategy who can mentor you. This is the way I did it and it did not cost me anything. 

How do I know what property to buy?

First time investors mistakenly look for the perfect  property. What I wanted were properties that would go up in value, were cashflow positive, paid for themselves  and had minimal maintenance or tenant issues. Seek expert advice on which areas have the drivers of growth present, have strong tenant demand, good rental yields and look for good value properties that stand out from the crowd.

How much money do I need to start investing?

Banks require a deposit to lend you money from cash savings or equity. Very few banks lend 95% to investors due to the tightening of lending criteria. As an example for a 10% or 20% deposit on a  $300K property  you need $30K or $60K plus costs of 5% for stamp duty and legals. So in total you need $45K or $75K to buy that great $300K entry level property.

Should I buy positively or negatively geared properties?

The gearing of properties is more about you and how much deposit you put in, interest rates,your rental yield, and your tax rate. For me the answer is to buy properties that will cash flow positive after my tax refund. The tax refund will be higher for new property due to higher depreciation claims. The taxman (if you read last month’s article) is the X factor that will keep you in positive cashflow territory.

What are the risks of investing?

Investing in shares, property, business or other ventures always comes with risk. The aim is to  minimise the risk by being financially ready, choosing a low risk strategy, having someone to guide and educate you on  where to buy  and what to buy and having a contingency financial buffer so you sleep at night. The bigger risk could be in doing nothing and ending up on the pension!

What if I don’t get a tenant?

I have only once ever had a period of vacancy over the last 9 years of investing. I was a newbie to investing back then and my mentor Ian Hosking Richards guided me with my first investments. Buy properties in areas where vacancy rates are low and buy the properties that tenants want to live in. My tenants love my properties!

What if interest rates rise?

Before buying a property, always do a cashflow estimation. This will stress test the property for you as to what the holding costs are before tax, and profit after tax. We have been in a record period of low interest rates and now could be the best time to buy. You can also fix interest rates and minimise your stress. If you would like my easy cash flow estimator register online and request “cashflow estimator please”

Send me your questions and I will happily answer them to get you started sooner and with more confidence.


Lindy Lear is a successful property investor who had a late start into investing, yet she built a portfolio of eight properties in just three years. She is a qualified property advisor and general manager of Rocket Property Group, and she won the Reader’s Choice Award in 2009, 2012 & 2013 for Property Investment Advisor of the Year. Lindy is passionate about helping others realise their goals through investing in property, and can be contacted on Ph: 1300 850 038 or visit

To read more Expert Advice articles by Lindy, click here

Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.