With a $300k deposit, you can enter property investment and build wealth through leverage. This guide shows your options, financing paths, and 5-year wealth projection.

What Can You Buy With $300k Deposit?

Assuming 20% deposit ratio (conservative, no LMI):

Maximum purchase price: $1.5M

Your Options in Inner-North:

Property Type	Suburb	Median Price	Deposit (20%)	Loan Amount	Yield
Unit	Preston	$524k	$105k	$419k	5.1%
Unit	Northcote	$600k	$120k	$480k	5.1%
House	Thornbury	$1.39M	$278k	$1.112M	4.7%
House	Coburg	$1.21M	$242k	$968k	4.6%

Strategy 1: Single High-Yield Unit (Conservative)

Buy 1 unit, keep $195k in reserve.

Example: Preston Unit, $524k

• Deposit: $105k
• Loan: $419k @ 7% = $29.3k/year interest
• Weekly rent: $420 = $21.84k/year
• Less expenses: $8k/year (rates $3k, insurance $1.5k, PM $2.5k, maintenance $1k)
• Net income: $13.84k/year
• After mortgage: $13.84k – $29.3k = -$15.46k/year (NEGATIVE)
• BUT: Mortgage principal reduction ~$3k/year reduces true loss to -$12.46k

Verdict: Negative cash flow, but excellent capital growth play. If property appreciates 3% = $15.7k/year gain.

5-year outlook: Property $524k → $610k (+$86k), loan $419k → $380k, equity $105k → $230k.

Strategy 2: Two Units (Yield Focus)

Buy 2 high-yield units across suburbs.

Example: Preston Unit + Northcote Unit

• Property 1 (Preston): $524k, deposit $105k, loan $419k
• Property 2 (Northcote): $600k, deposit $120k, loan $480k
• Total capital deployed: $225k (of $300k)
• Reserve: $75k

Combined financials:

• Total rent: $420 + $475 = $895/week = $46.5k/year
• Total expenses: $16k/year
• Net income: $30.5k/year
• Total mortgage: $899k @ 7% = $62.9k/year interest
• After mortgage: $30.5k – $62.9k = -$32.4k/year
• Principal reduction: ~$6k/year
• True loss: -$26.4k/year

BUT: Capital appreciation. If properties appreciate 2% = $22.5k/year combined gain. Combined gain + appreciation ≈ break-even.

5-year outlook: Portfolio $1.124M → $1.28M (+$156k), loans $899k → $825k, equity $225k → $455k.

Strategy 3: Deposit + Equity (More Leverage)

Use $300k deposit + borrow against primary residence equity.

Scenario: You own home worth $1M, $200k equity available via HELOC.

Total capital: $300k + $200k = $500k → Can buy $2.5M property (at 20% deposit).**

Example: Coburg House $1.2M + Thornbury House $1.3M

• Property 1: $1.2M, 20% deposit = $240k
• Property 2: $1.3M, 20% deposit = $260k
• Total deposit: $500k ✓
• Total loans: $1.96M @ 7% = $137.2k/year interest
• Total rent: $430 + $450 = $880/week = $45.8k/year
• Net income after expenses: $30k/year
• After interest: $30k – $137.2k = -$107.2k/year (VERY NEGATIVE)

Verdict: RISKY. Only do this if you have $100k+ annual income to cover negative cash flow.

Financing Options for $300k Investor

Option 1: Personal Loan (20% deposit, no LMI)

• Deposit: $105–120k (20%)
• Loan: $419–480k (80%)
• LMI: $0 (avoided)
• Interest rate: 6.9–7.2%
• Term: 30 years

Option 2: LMI Loan (10–15% deposit, pay LMI)

• Deposit: $52–78k (10–15%)
• Loan: $446–472k (85–90%)
• LMI: $25–40k (added to loan)
• Total loan: $471–512k
• Interest rate: 7.3–7.7% (slightly higher)
• Term: 30 years
• Advantage: Stretches $300k to buy 2 properties ($1.0M+)

Option 3: HELOC + Personal Loan (Leverage home equity)

• HELOC on primary residence: $150–200k @ 7.5%
• Personal loan: $100–150k @ 7.2%
• Combined: $250–350k capital to invest
• Advantage: More capital deployed, faster compound growth
• Risk: If income drops, can’t service both mortgages

5-Year Wealth Projection: Strategy 1 (Conservative)

Year 1:

• Buy Preston unit $524k (deposit $105k)
• Annual loss: -$12.5k (negative cash flow)
• Equity growth: $15.7k (capital appreciation)
• Net wealth: +$3.2k

Year 2:

• Property appreciates to $540k
• Loan reduces to $402k
• Equity: $138k (from $105k)
• Still negative cash flow but equity growing

Year 3:

• Property $557k, loan $383k
• Save additional $20k → Can buy property #2
• Total equity: $174k

Year 4–5:

• Buy property #2 (Northcote unit $600k)
• Portfolio: $1.1M+
• Loans: $783k
• Equity: $317k (from $300k)

5-Year Summary:

• Started: $300k capital
• Ended: $317k equity, $1.1M portfolio, $45k/year income generation
• Wealth gain: $117k equity growth
• Cash flow: Still negative, covered by other income
• Path: Clear — buy 1, hold, buy 2, scale

Common $300k Mistakes

Mistake 1: Overextending With LMI

Problem: Use 10% deposit, pay $40k LMI, stretch to buy $2M property. Loan $1.8M @ 7% = $126k/year interest. Rent $1.8M property = $65k/year. Loss = $61k/year (unsustainable).

Fix: Start conservative (20% deposit, 1 property). Once cash flow stable, expand leverage.

Mistake 2: Not Keeping Reserve

Problem: Deploy all $300k into deposits. Then vacancy/repair hits, can’t cover mortgage payment.

Fix: Keep $50–100k in offset/emergency account. Invest remaining $200–250k.

Mistake 3: Wrong Suburb Choice

Problem: Buy in lower-yield suburb (Ivanhoe 3.8%) instead of high-yield (Preston 5.1%). 1.3% difference = $6.8k/year less income on $524k property.

Fix: Prioritize yield for cash flow (Preston, Northcote, Coburg). Prioritize growth for appreciation play (Ivanhoe, Kew, Richmond).

FAQs: $300k Investment Deposit

Q: Can I use $300k to buy a house?

A: Yes, but risky. $300k = 25% deposit on $1.2M house (good LVR). BUT: Houses have higher maintenance costs, longer holding periods. Unit is safer (5–10 years to build wealth). House is better for 15+ year holds.

Q: Should I buy 1 or 2 properties?

A: Buy 1 first. Understand cash flow, maintenance, tenant management with 1 property. Then buy #2 once confident. This is the safe path to a 10-property portfolio.

Q: How long until I’m cash flow positive?

A: 5–10 years depending on interest rates. As mortgage principal decreases, cash flow improves. At year 10, your $419k loan is ~$350k, and rent rises 2–3%/year. Breakeven is realistic by year 8–10.

Your $300k Action Plan

1. Save emergency fund: $50k (in offset account, offset mortgage interest)
2. Invest capital: $250k into 1 unit purchase
3. Hold & stabilize: 3 years (understand property investing)
4. Refinance: Borrow against equity, or save for property #2 deposit
5. Scale: Buy property #2 (year 3–4)
6. Compound: By year 10, you have $1.5M+ portfolio, $500k+ equity

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