The advantages and disadvantages of property investing 

There are pros and cons to every investment and only a financial professional can advise what’s right for you. If you’re looking for general information, we’ve outlined some of the advantages and risks associated with investing in property.

Potential advantages of owning an investment property

Rental income  

If the rental income you generate from an investment property covers all your expenses, including loan repayments, maintenance and property management, then the property could be ‘positively geared’. 

For some property investors, a positively geared property is one component of their overall investment portfolio, helping them generate income. An accountant or other financial professional can help you understand the potential benefits and tax implications of rental income.

The opportunity for tax deductions

If the rental income does not cover an investment property’s costs, it could be ‘negatively geared’. As above, an accountant or other financial professional can help you understand the potential tax benefits of ‘negatively geared’ property investing and whether it’s relevant for you.

Risks to consider when investing in property 

Higher interest rates can mean higher costs

Borrowers with variable rate property loans could pay higher loan repayments if interest rates rise. It’s important to work with an investment adviser to ‘stress test’ any property investment to help ensure it’s suitable for you in a range of circumstances.

Maintenance and property management time and costs

Investing in property can be time-consuming, especially when it comes to finding tenants and keeping the property in good condition. Some property investors may prefer to hire a professional manager, who will generally take a percentage of your rental income. 

High entry costs

Saving up enough money to enter the property market may take time. In addition to accumulating a deposit on an investment property loan, you may need to consider: 

• stamp duty
• inspection costs
• renovation costs.

For more information, read our article on the costs of property investment. 

Talk to a home lending expert 

If you’re considering purchasing an investment property, talk to a specialist at Suncorp Bank. Our home loan experts can answer your lending questions and work with you every step of the way.

Chat with a home lender

Read more:

• Investing in rental property: what do renters want?
• Negative gearing explained 
• Property investment strategies: which one is right for you?  

Home Loans are provided by Suncorp-Metway Ltd ABN 66 010 831 722 AFSL No. 229882 Australian Credit Licence 229882 (“Suncorp Bank”) to approved applicants only. Please read the relevant Product Information Document, Lending Fees and Charges and Home Package Plus Terms and Conditions before making a decision regarding any Suncorp Bank products. Fees, charges, terms and conditions apply and are available on request or on our Product Information Documents and Forms page.

The information is intended to be of a general nature only and any advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.