Learn · Property due diligence
Property research checklist for investors
Holding-cost model from rent to cash flow. Add supply competition. Not personal tax or credit advice.
Districts Research · ·
Investor checks
Run the owner-occupier list, then add rent, competition, yield after costs, and a downside you can live with.
- Lot checksStill required in a “strong” suburb
- HoldingRent, supply, costs — labelled
Swipe the panels.
The arithmetic
What should I research before buying an investment property?
An investor runs every lot check an owner-occupier runs, then builds a holding-cost model: rent, vacancy, management, insurance, rates, strata, maintenance, land tax, finance and capital spend. Gross yield is the first line. Net property yield is the second. Cash flow after interest is the third. Tax is personal and sits last. Mixing the four lines is how a marketing yield becomes a surplus that is not there.
Then add what the dwelling will compete against: current comparable listings and the pipeline of similar dwellings. None of this says whether the purchase suits you. Districts does not hold your tax position, borrowing capacity or objectives. See gross yield versus net yield for the equations. This page is the investor file those equations sit in.
Holding-cost model: the lines you actually have to fill
Itemise. Do not apply a single cost percentage borrowed from another suburb. Land tax, rates and levies differ by state, territory and property. Where a figure is unknown, leave it unknown.
| Line | What goes in | Common hole | Who closes it |
|---|---|---|---|
| Rent | A range from current comparable listings, labelled advertised until a lease exists. | Using the appraisal as achieved rent. | Five current comps; a written managing-agent appraisal; later, the lease. |
| Vacancy and re-letting | Weeks you can defend from recent comparable listings and letting times. | A national allowance copied from a blog. | Local listings tape. Districts does not compute a vacancy rate. |
| Management | Letting, management and renewal fees if you will use a manager. | Grossing rent for 52 weeks then ignoring the fee. | The management agreement. |
| Insurance | Building and landlord cover for that address. | Ignoring a flood or bushfire overlay that changes cover. | A quote on this lot, after you have read the overlay. |
| Rates and water | Council and water owner charges from the notices. | Using a neighbour’s notice. | Vendor’s notices; the council. |
| Strata | Levies plus any special levy already struck. | Treating a new unit as cheap to hold. | Strata roll and minutes. |
| Maintenance | A schedule for this building age and type. | A house and a new unit sharing one allowance. | Inspector plus your own schedule. |
| Land tax | That state’s current schedule applied to your holdings. | Skipping it because a home you live in is exempt. | The state revenue office. Thresholds change. Do not quote last year’s figure from memory. |
| Finance | Interest, and principal if you will pay it. This is cash flow, not net property yield. | Calling a leveraged cash-flow figure a yield. | Your lender. Not Districts. |
| Capital spend | Known works in the first years: roof, compliance, minimum standards. | Assuming the “renovated” claim removed capex. | Inspector and, for units, the strata report. |
| Supply competition | Comparable rentals now, plus similar dwellings in the nearby pipeline. | Using today’s tight listings as next year’s story. | Listings tape and the planning register. See supply pressure. |
Keep the four yield layers on separate lines
Gross: weekly rent times 52, divided by price. Net property: collected rent minus the holding-cost list, divided by price. Cash flow: then subtract interest (and principal if you pay it). Tax: a registered tax agent, using your other income and the rules that year. The yield guide works an arithmetic example. Repeat that arithmetic on this file with numbers you can source. Do not import a “typical cost share” from another market.
The lot file still comes first
Flood, planning, title, inspection and nearby applications are not optional because the suburb median looks strong. A special levy, an unapproved flat or a flood overlay that an insurer will not cover can erase a tidy gross yield. Run how to research a property before you fill the model. Suburb context is a later line. See how to research a suburb.
Stress the model with numbers you can defend
Write three cases using inputs from this file, not national rules: a lower achieved rent than the advertised figure, a vacant period taken from recent comparable listings, and a higher interest rate than your current quote. If the model only works on 52 weeks at the appraisal and on today’s rate, write that. That is a fact about the model. It is not a forecast, and it is not advice to proceed or stop.
Traps that treat gross yield as cash
These mistakes skip a line in the model.
- Using advertised or appraised rent as collected rent.
- Skipping land tax because the house you live in is exempt. Investment dwellings are usually on the schedule. The basis differs by state.
- Ignoring pipeline supply because current listings look thin.
- Treating a hotspot list as evidence.
- Letting a suburb median rent stand in for this bedroom count and type.
What a holding-cost model does not establish
It does not establish that you should proceed, or that rent, vacancy or rates will stay at the inputs you typed. Districts does not hold your tax position or borrowing capacity. Achieved rents are not published for individual properties, so the rent check is built from advertised comparables. Where holding-cost inputs are not loaded for that jurisdiction, the net-yield slot stays unknown rather than being filled from a national average.
How Districts shows investor inputs
Every property page runs achievable rent labelled by source, and rental supply pressure from comparable listings and the nearby pipeline. Net yield with holding costs is one of the ten checks. It is completed only where cost inputs exist for the jurisdiction. The rental yield calculator uses the numbers you type and labels the result as your inputs. Liquidity, if you need an exit picture, is a separate guide: market liquidity.
How to confirm each model line
Rent: current comps and a written appraisal. Costs: rates and water notices, an insurance quote, strata records, and the state revenue office for land tax. Finance: your lender. Tax and structure: your accountant. Whether the purchase suits you: a licensed financial adviser. This page is a file structure, not personal advice.
How Districts derives it
Explore using Districts
Sources
Official material this page used. Dates are when Districts checked the page, not the life of the instrument.
NSW Government
Why land is valued and what it is used for
NSW land tax uses Valuer General land values. The VG does not set the tax rate. Other states use different bases.
Checked
Related guides
Rental and holding risk
Gross yield vs net yield: the holding costs investors forget
Gross yield, net property yield, finance cash flow, then tax. Itemise costs. Not personal tax or credit advice.
Rental and holding risk
How to estimate achievable rent without guessing
Build a five-comp rental set. Advertised rent is not achieved rent. A suburb median is context. Label every figure.
Rental and holding risk
What is rental supply pressure?
A Districts construct: comparable rentals near the lot plus nearby residential projects. It does not forecast that rents will fall.
Rental and holding risk
How to research rental demand in an area
Read renter share, household mix, anchors and letting times for one class. Census is a dated snapshot. Not a rent forecast.
Supply and liquidity
What is property market liquidity?
Observable proxies: turnover, consistent days on market, failed campaigns, sample depth. Not a claim that a sale was near worth.
Research purposes only. Not personal financial advice, a valuation, or a planning certificate. Always speak to a licensed financial adviser before you act.