If you’re starting out in residential property investment and you have $100,000, your options start to increase. Rates are coming down and confidence is growing, especially in areas like Melbourne which have been lagging the past few years. With many markets facing supply constraints and an evolving ‘super cycle’, means that you need to pick your investments carefully.
We’ve covered strategies when you have smaller starting funds elsewhere, but once you have $100,000 you’re in a position to cover a significant deposit, plus taxes and other purchase costs. That’s a great opportunity but requires strategic thought.
This blog is your comprehensive guide, as a property investor in Australia, on how to enter the residential property market with a $100,000 investment.
Whether you’re a first-time buyer or an existing homeowner looking to add an investment property to your portfolio, this guide covers strategic approaches, market considerations, and practical steps to maximise returns on this investment amount.
Understanding What $100K Really Gets You
What $100,000 gets you depends partly on whether you’re purchasing your primary residence or an investment property. While some lenders will lend you 95% of the property’s value (the First Home Loan Deposit Scheme may allow purchases with as little as 5% deposit without LMI for eligible buyers), that’s likely to be 80% for an investment property.
In theory, that means your $100,000 could be your deposit on a property worth $500,000. But you need to account for stamp duty and legal fees. You also need the bank to lend you the $400,000, but banks typically restrict lending based on your income and prospective rent. They may even apply LMI if they feel you’re borrowing a lot relative to the property’s value.
That’s to say that, if you’re hoping your $100,000 can be a 5% deposit with a 95% mortgage on top of it, you may be disappointed. But if you’re buying a property in New South Wales worth $420,000, you could expect costs of:
- Stamp Duty of around $13,500
- Legal fees of $2,000
- Inspection fees costing $500
- Other hidden fees of around $500
In that case, your $100,000 covers your costs and leaves you a deposit of $83,500, keeping you within the 80% rule. Of course, lenders will want evidence of your likely rental income as well to be confident you can cover the costs. They generally assume a vacancy rate of 20% and assume a potential interest rate rise of 3% as well, both of which could further restrict what they’re willing to lend.
Nonetheless, a target property value of $400,000 - $500,000 for an investment property is realistic with a deposit of over $100,000. If a traditional mortgage looks like too many hoops to jump through, you can consider alternative financing options like Futurerent, which gives you an advance payment on your rent.
Key Investment Strategies for $100K
Depending on your goals and risk appetite, there are different strategies for investing your $100,000.
The conventional approach is a ‘buy and hold’ strategy: buying a property that you expect to have long-term appeal, like a small family home in a desirable suburb, and keeping it for a long period. The idea is to bring in rental income, possibly at a profit, and benefit from stable, long-term capital growth.
The type of property has an impact here. Houses tend to offer greater land value appreciation, while apartments can deliver a higher yield. But apartments also come with strata fees and less control, and potential supply risks if in a high density area. With a $100,000 deposit, your mortgage costs may already be at the higher end, so those extra fees could be an issue.
Location matters too. Metropolitan properties of capital cities have more demand but may be unaffordable with your $100,000. Regional options are more affordable, higher yields, but tend to offer weaker long-term growth.
If aiming for a lower-value property puts you off, you could consider fractional investing options such as crowdfunding or Real Estate Investment Trusts. We’ve written about these in more detail elsewhere but, essentially, they give you the chance to buy a small share of a property or a portfolio, rather than a single property. But they come with their own risks, so do your research and seek professional advice.
Lastly, you could consider a joint venture. This can be riskier depending on the business arrangement and so, even if teaming up with friends or family, make sure you have clear agreements in place and have a clear strategy.
Location Analysis: Where to Invest $100K
Historically, long-term investors have generated stable returns by investing in capital cities like Perth, Brisbane, Adelaide, Sydney, and Melbourne. Although Melbourne’s market has been declining in recent years, it turned positive in 2025, and has been a strong performer at the start of March 2025, while Sydney rebounded with 0.3% growth.
Growth corridors, supported by government investment, are often good candidates for investment, such as Western Sydney and North Perth, although with median house prices in the region of $1,000,000 in these areas, your $100,000 deposit may restrict your options.
It’s also worth looking at “missing middle” policies in New South Wales, which have been a game-changer for investors by opening up opportunities for them to invest in and develop their properties.
In general, when assessing an area you should account for:
- Surrounding infrastructure such as schools and transport
- Access to amenities and recreational facilities
- Employment levels and the concentration of high-paid professionals
- Levels of supply and demand
Financing Your Investment
As we’ve covered, there are several options when it comes to financing.
If you’re buying for yourself to occupy as your principal place of residence, you’ll probably be able to borrow more via a traditional loan or mortgage than if you’re borrowing for an investment property. If that’s your plan, you should account for your overall debt levels as well to keep your borrowing in check. Interest rates on investment properties tend to be higher, because banks see them as more of a risk.
If you want to reduce your monthly payments, you could consider an interest-only loan, where you pay the interest but not the principal. This reduces your monthly outgoings but means your debt won’t go down. Over the long term, it will also mean you pay more interest costs in total as the principal loan balance won't be reducing after each monthly repayment.
If you’re an investor and you have an existing property where you live, you could consider leveraging your equity. This could supplement your $100,000 in cash by taking out a loan secured against your existing property rather than the new one, potentially increasing your options and reducing your interest rate.
But all these options involve taking on more debt. You might be pre-approved for a loan, but you need to have a plan for how you pay it off one way or the other, whether that’s through selling the property or through rental income.
Maximising Returns on Your $100K Investment
How you maximise your returns depends partly on your strategy, but your income likely comes from one of two sources: capital growth (how your property increases in value) and rental yield. If you’re negatively geared, where rental income is less than it costs you to own and maintain the property, then capital growth becomes more important.
At the same time, don’t forget to:
- Optimise your tax strategies, by timing investments intelligently and making the most of deductions.
- Invest in improvements that boost your property’s value and rental yield.
- Manage your cash flow by planning for and watching your expenses.
With a $100,000 deposit, you’ll most likely be looking for sustainable investment strategies, so the focus on intelligent improvements and cash flow is especially important.
Step-by-Step Investment Process
How do you get started with your $100,000 investment? Use this step-by-step process as your checklist for a sensible investment:
- Set clear investment goals: Are you aiming for cashflow or capital growth? Short-term or long-term gains? There’s no right or wrong, but the property you buy will vary depending on your answers.
- Research and analyse your market: Where are the growth areas? How high is demand? What are the most sought-after property types?
- Build your investment team: Consider a mortgage broker, a buyer's agent, and accountant that you trust to help you find the right property, manage your money, and finance it intelligently.
- Do your due diligence: Look carefully at what your prospective investment has to offer and get all the right inspections.
- Property management considerations: Manage your tax and investments carefully and conduct regular maintenance to avoid nasty surprises.
Common Pitfalls to Avoid
Mistakes happen when you’re getting started with property investment. Some of the most common pitfalls for investors include:
1) Overleveraging Risks
If you borrow too much, you’re more vulnerable to interest rate rises and market downturns. If it happens, reevaluate your plans and project your financial position in the event of a large downturn to make sure you can cope.
2) Neglecting Cash Flow Analysis
Failing to accurately calculate rental income versus expenses can lead to negative cash flow, where the property costs more to hold than it earns. This might be okay if you’re looking for capital growth, but if you weren’t expecting it then consider if you can reduce expenses or change strategies.
3) Poor Location Selection
Chosen an area without the demand or growth potential you need to get the most out of your investment? You probably need to do more research before purchasing next time.
4) Ignoring Property Inspection Findings
You want the property to be in good shape, especially given your $100,000 was probably mostly eaten up by the deposit and fees, but if it isn’t you could lose out in the long term. Next time get quotes for all the required work and either take urgent action or consider pulling out if you think it’s necessary.
5) Failing to Account for All Costs
First-time investors often forget about property taxes, strata fees, or hidden borrowing costs. With good rental income and capital growth, that doesn’t have to be world-ending, but make sure you remember next time and find every efficiency you can, especially with tax and borrowing costs.
Case Studies: Success Stories
One way to reduce the stress when making a property investment is to use Futurerent. If you’re buying with a $100,000 saved, you may well need to make renovations but may not have much cash left over. Futurerent gives you an advance on your rental payments so that you can invest without having to refinance. Check out Ravi’s story for an example of exactly that.
Investing $100,000 in real estate gives you exciting opportunities, but success depends on strategy, location, and planning. Whether you're following a buy-and-hold strategy, leveraging equity, or considering alternative financing, your approach should align with your risk appetite and long-term goals. By selecting the right property, managing your cash flow, and avoiding common pitfalls, you can maximise returns while minimising risk.
