What Counts as an Investment Property?
An investment property is any residential dwelling you purchase with the intention of earning rental income, rather than living in yourself. Lenders assess investment loans differently to owner-occupied mortgages, applying stricter serviceability requirements and typically charging higher rates because the loan carries more perceived risk.
The type of property you choose determines not just the rental yield and capital growth potential, but also how much a lender will let you borrow, the rate you pay, and whether the loan will be approved at all. Some property types are seen as lower risk and easier to value, while others trigger additional scrutiny or deposit requirements.
Houses on Standard Lots
A standalone house on a standard residential lot is usually the most straightforward property type to finance. Lenders value houses highly because they hold their value consistently, attract a broad pool of tenants, and are relatively simple to sell if the loan defaults. Most lenders will lend up to 90 per cent of the property value, and some offer loan-to-value ratios as high as 95 per cent with Lenders Mortgage Insurance.
In Baldivis, where the suburb sits roughly 50 kilometres south of Perth and continues to expand with new estates and established pockets, standalone houses appeal to families and long-term tenants looking for space and proximity to schools and parks. A three-bedroom house in an established part of the suburb typically attracts stable rental demand, making it a common entry point for investors who want predictable cash flow and straightforward loan approval.
Units and Apartments
Units and apartments are smaller, often more affordable, and can deliver higher rental yields in areas with strong demand from renters who prioritise location over size. However, lenders apply different criteria depending on the building size, construction type, and ownership structure.
Most lenders will finance units in small complexes without hesitation, but properties in high-rise buildings or buildings with more than four storeys may attract a lower maximum loan-to-value ratio or require a larger deposit. Some lenders also restrict lending in buildings with a high proportion of investor-owned units or where a single entity owns multiple lots, as this can affect resale value and tenant stability.
Body corporate fees are another consideration. Lenders factor these into your serviceability calculation, reducing the amount you can borrow. If the fees are unusually high or the building has known maintenance issues, some lenders will decline the application outright or apply additional conditions.
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Townhouses and Villas
Townhouses and villas sit between standalone houses and apartments in terms of both price and lender appetite. They often come with smaller blocks, shared common property, and body corporate arrangements, but they also offer more living space than a typical unit and appeal to tenants looking for a middle ground between apartment living and a full house.
Lenders generally treat townhouses the same as houses, provided the title is freehold or standard strata. Where the title is classified as community title or there are restrictions on use or subdivision, some lenders may apply slightly lower loan-to-value ratios or ask for additional documentation to confirm the property can be sold without complication.
Consider an investor who purchases a two-bedroom villa in one of the quieter streets near the Baldivis town centre, close to the library and local shops. The property attracts a young couple who value the low-maintenance yard and proximity to amenities. The investor borrows at 80 per cent loan-to-value ratio, avoids Lenders Mortgage Insurance, and secures a competitive variable rate. The body corporate fees are modest, and the lender includes them in the serviceability assessment without difficulty. The loan settles within six weeks, and the property is tenanted within a fortnight of settlement.
Dual Occupancy and Dual Key Properties
Dual occupancy properties, where two separate dwellings sit on a single title, and dual key properties, where a single building contains two self-contained units with separate entrances, can offer higher rental returns by housing two tenancies on one block. However, financing these properties can be more complex.
Lenders assess dual occupancy and dual key properties based on zoning, council approval, and whether the dwellings are separately metered and legally rentable as distinct tenancies. If the property meets these criteria, some lenders will allow you to count both rental incomes when assessing serviceability. If the dwellings are not separately titled or one is classified as a granny flat without the correct approvals, the lender may treat the property as a standard house and disregard the second income stream.
Interest rates on dual occupancy properties are often slightly higher than standard houses, and loan-to-value ratios may be capped at 80 per cent or lower depending on the lender's risk appetite and the property's compliance with local planning rules.
New Builds Versus Established Properties
The distinction between a newly constructed dwelling and an established property has tax and financing implications. Under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, negative gearing is quarantined for established residential dwellings acquired on or after 7:30pm AEST on 12 May 2026, meaning rental losses can only be offset against other residential rental income or carried forward. Eligible new builds, defined as dwellings constructed on previously vacant land or where the number of dwellings increases, retain access to negative gearing under the existing rules.
This changes the economics of buying your first investment property and makes new builds more attractive for investors with other taxable income who want to offset rental losses against salary or wages. Lenders are aware of this shift and some have introduced product features tailored to investors purchasing new builds, including interest rate discounts and higher loan-to-value ratios.
If you are considering investment loans for a new build in Baldivis, where land releases and house-and-land packages continue to come to market in estates like Settlers Hills and Wellard, confirm with your broker that the property meets the definition of an eligible new build. A new home built as a replacement on a block that previously held one dwelling does not qualify unless the number of dwellings increases.
Rural and Semi-Rural Properties
Properties on larger blocks, classified as rural or semi-rural, often deliver lower rental yields and attract a narrower tenant pool, which makes lenders more cautious. Most lenders cap the loan-to-value ratio at 70 to 80 per cent for properties on lots larger than a certain size, often two hectares, and some will not lend at all if the property includes farming infrastructure or is zoned for agricultural use.
If the property is in a recognised residential area but simply sits on a larger-than-average block, lenders are more flexible. Baldivis has pockets with larger residential lots, particularly in the older, more established parts of the suburb. These properties can be financed as standard residential investments, provided the land size does not exceed the lender's threshold and the property can be easily valued using comparable sales.
Properties with Commercial Zoning or Mixed Use
A property zoned for commercial or mixed use, such as a shop with a residence above or a home office with separate access, requires a different type of loan. Most lenders will not finance mixed-use properties on standard residential investment loan products, and those that do often apply lower loan-to-value ratios, higher rates, and stricter serviceability criteria.
If the property is zoned residential but used occasionally for business purposes, such as a home consulting room or studio, lenders typically treat it as a standard investment loan provided the primary use is residential and the tenant is occupying it as a place of residence.
What Lenders Look for in Any Property Type
Regardless of the property type, lenders assess location, condition, and marketability. They want to see that the property is in a populated area with consistent demand, that it can be valued using recent comparable sales, and that it does not have structural defects, illegal modifications, or title complications.
Properties in regional or thinly traded markets, properties with unique features that make valuation difficult, and properties requiring significant repairs are all harder to finance. If you are purchasing a property that falls into any of these categories, expect the lender to request additional documentation, such as a building inspection report, engineer's certificate, or council zoning confirmation.
When you apply for investment loan refinance, the same criteria apply. The lender will revalue the property and assess its current condition, so any deterioration or market softness since the original purchase may affect the amount you can borrow.
How Baldivis Fits into the Investor Landscape
Baldivis has grown rapidly over the past two decades, transitioning from semi-rural land to a suburb with distinct precincts, shopping centres, schools, and transport links. The suburb appeals to renters looking for affordability and space within commuting distance of Perth, Mandurah, and the Kwinana industrial area.
Investors targeting Baldivis typically focus on houses in newer estates or older, more established streets closer to amenities. Rental demand remains steady, supported by families and workers who want proximity to employment hubs without inner-city prices. Vacancy rates are generally low, and rental yields sit within a range that supports serviceability calculations without requiring significant equity or additional income.
If you are based in Baldivis and considering expanding your property portfolio, speak to a broker who understands the local market, knows which lenders are active in the area, and can structure your loan to suit both the property type and your broader investment strategy.
Choosing the Right Property Type for Your First Investment
Your choice of property type should reflect your goals, your risk tolerance, and the amount of equity or deposit you have available. A standalone house offers simplicity and broad lender appeal, but requires a larger deposit and may deliver lower rental yields. A unit or townhouse can be purchased with less capital and may generate stronger cash flow, but comes with body corporate fees and potentially more restrictive lending terms.
If you have other taxable income and want to offset rental losses, an eligible new build gives you access to negative gearing under the existing rules. If you are focused on capital growth and tenant stability, an established house in a well-connected suburb like Baldivis offers a proven track record and straightforward financing.
Call one of our team or book an appointment at a time that works for you. We will walk you through the property types that suit your situation, explain how lenders assess each option, and structure your loan so you can move forward with confidence.
Frequently Asked Questions
What is the easiest type of investment property to finance?
A standalone house on a standard residential lot is typically the easiest property type to finance. Lenders value houses highly because they hold their value consistently, attract a broad pool of tenants, and are relatively simple to sell if the loan defaults.
Can I claim negative gearing on an established investment property?
Under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, negative gearing is quarantined for established residential dwellings acquired on or after 7:30pm AEST on 12 May 2026. Rental losses can only be offset against other residential rental income or carried forward. Eligible new builds retain access to negative gearing under existing rules.
How do lenders assess units and apartments?
Lenders assess units and apartments based on building size, construction type, and ownership structure. Properties in small complexes are usually financed without issue, but high-rise buildings or those with more than four storeys may attract lower loan-to-value ratios or require a larger deposit.
What are body corporate fees and how do they affect my loan?
Body corporate fees are regular payments made to maintain shared property and common areas in strata-titled buildings. Lenders factor these fees into your serviceability calculation, which reduces the amount you can borrow. Unusually high fees or known maintenance issues may result in additional lending conditions or decline.
Are dual occupancy properties harder to finance?
Dual occupancy and dual key properties can be more complex to finance. Lenders assess these properties based on zoning, council approval, and whether the dwellings are separately metered and legally rentable. Interest rates are often slightly higher and loan-to-value ratios may be capped at 80 per cent or lower.
