START WITH A PLAN YOU CAN USE.

Set the purpose and buying budget.

Begin with what you want the investment to contribute to your longer-term plans.

Then work with your broker and advisers to confirm the funds available and a level of repayments you can manage.

That gives the search a practical starting point.

Understand gross yield, net yield and cash flow.

Gross rental yield = annual rent divided by purchase price, multiplied by 100.

For example, $600 a week for 52 weeks is $31,200 a year: a 5.2% gross yield on a $600,000 purchase before expenses.

For a net yield before finance and tax, subtract annual property operating costs from annual rent, then divide by the same purchase price and multiply by 100.

State the costs and vacancy allowance used so comparisons are consistent.

Cash flow goes further: compare rent actually received with property bills and loan repayments, including principal when payable.

The example assumes 52 weeks at the stated rent and excludes buying costs, operating expenses, finance and tax; it's an arithmetic illustration, not a rental forecast.

Look at the whole ownership picture.

Compare rental evidence with the costs of holding the property, including maintenance and periods between tenants.

Property management, insurance, rates and strata charges may all affect the ongoing picture.

Ask for current evidence behind any rental estimate or comparable-value claim.

Understand equity, borrowing and changes in value.

Equity is a property's value less the debt secured against it.

Loan repayments and changes in value affect that amount, while a lender separately assesses any further borrowing.

Borrowing to invest, often called leverage, increases your exposure to changes in property value relative to your own funds.

That can magnify gains and losses, with interest and other costs still payable.

Capital growth is an increase in value over time, while future values can rise or fall.

With compounding, each period's percentage change applies to the updated value.

Take the tax questions to your accountant.

Gearing means borrowing to invest; ask your accountant to explain positive and negative gearing in the context of your rental income, interest and other expenses.

Ask your accountant how rental income, interest, expenses and any eligible depreciation or capital-works deductions apply to your property.

Have them confirm the treatment of any rental loss and capital gains tax when you sell.

Keep the tax calculation separate from your cash-flow budget: an allowable deduction and money available for repayments are different measures.

General information only, not financial, tax or legal advice; your accountant and qualified financial adviser should assess current rules and your circumstances before you rely on a projected outcome.

Make the property earn its place on the shortlist.

Assess the layout, condition, location and likely tenant fit alongside the asking price.

Arrange the relevant building, strata and legal checks before committing.

I can support the research and acquisition process, with lending and specialist advice handled by your qualified professionals.