Property investment due diligence is the work of confirming what you are actually buying before you commit money to it: the property's identity and title, the evidence behind its price and rent, what the council or state says about the land, and what the contract actually commits you to. Work through it in the order below, from your finance position through to the day you settle, and keep a note of where each answer came from.
Before you look
- Confirm your finance position with your lender or mortgage broker before you start inspecting properties. If you have pre-approval, note its limit and its expiry date.
- Set a working budget for the purchase price, kept separate from any figure a lender has approved.
- Decide how much cash buffer you want to keep in reserve for costs that come up after you settle.
Summary
Record the basics for the specific property you are looking at, and where each detail came from.
- Confirm the address, property type and title reference match the listing, the contract and any council record you can check.
- Ask your solicitor or conveyancer which title type applies: Torrens, strata, company or community title. Each carries different rights and different ongoing obligations.
- Leave anything you cannot confirm blank rather than guessing.
Finances
Work out the running costs and the numbers behind them using your own figures, not the advertised ones.
- Get price evidence beyond the advertised figure: a recent comparable sale, a written price guide with its date, or a valuation.
- Get rent evidence: a rental appraisal from a property manager, or comparable listings for similar properties nearby, each dated and sourced.
- List the running costs you would actually pay: council rates, water rates, strata or body corporate fees if they apply, landlord insurance, property management fees and a maintenance allowance.
- Work out gross rental yield: annual rent divided by the purchase price.
- Work out net rental yield: annual rent, less annual running costs, divided by the purchase price.
- Work out weekly cash flow: rent, less running costs, less your loan repayment, using your own interest rate, deposit and loan term.
- Treat every result as a what-if on your own assumptions, not a forecast. Change one assumption and see how far the outcome moves.
Example: a $650,000 house renting for $600 a week, or $31,200 a year.
Gross yield: $31,200 ÷ $650,000 × 100 = 4.8%.
Running costs for the year, as an assumption to work with: rates $2,200, building and landlord insurance $650, a management fee assumed at 7% of rent ($2,184), and a maintenance allowance of $1,000. Total: $6,034.
Net yield: ($31,200 − $6,034) ÷ $650,000 × 100 = 3.9%.
Weekly cash flow: running costs are $6,034 ÷ 52 = $116 a week. With a loan repayment of $700 a week on your own rate and term, $600 rent − $116 running costs − $700 repayment = −$216 a week, before tax.
Location
- Check zoning and any planning overlays with the local council or your state's planning portal, especially if you are considering renovating, subdividing or short-term letting.
- Check flood, bushfire and other hazard overlays through your state or territory's official hazard-mapping tool. This is one to check yourself against the primary source; nothing on this list assesses hazard risk for you.
- Look at transport links, schools and other services relevant to the tenant you expect to attract.
- Note the date and source of any local figures you rely on. Planning rules and hazard maps are updated from time to time.
Documents
- Ask a solicitor or conveyancer to review the contract of sale and the title before you sign anything, including any easements, covenants or encumbrances.
- Check the contract for special conditions: subject-to-finance clauses, subject-to-building-and-pest clauses, the settlement period, and anything the agent has added.
- Book a building and pest inspection, ideally before the contract becomes unconditional.
- If the property is strata or community titled, get the strata report and ask your conveyancer what it shows about the sinking fund, any upcoming special levies and current disputes.
- Ask for a further inspection from an engineer if the building or pest report flags anything structural.
Offer
Before you offer
- Decide the maximum price you are prepared to pay, kept separate from what a lender might approve.
- Decide what conditions to make your offer subject to: finance approval, a satisfactory building and pest inspection, or both.
- Check the cooling-off period that applies where you are buying. The length varies by state and territory, and it typically does not apply if you buy at auction. Confirm the current rules with your solicitor, conveyancer or state consumer affairs office before you sign.
After the offer
- Pay the deposit as the contract sets out, usually held in a trust account until settlement.
- Finalise your finance approval with your lender within the timeframe the contract allows.
- Arrange building insurance from whichever point the contract makes you responsible for the property: exchange or settlement.
- Book a pre-settlement inspection to confirm the property is still in the condition the contract describes before you complete.
Checklist in the Property Hub
Virtual Buyers Agent organises this same list around each property you are considering. Every property gets a Property Hub with five areas, in this order: Summary, Finances, Location, Documents and Offer. You record the address and title type in Summary; record your price and rent evidence, running costs and assumptions in Finances to see the yield and cash flow above worked out with the formula shown; and work through Location with the map, nearby places and Census figures for the area. In Documents, you tick off each item yourself as you complete it: nothing is uploaded, read or assessed. Offer keeps your working offer price and conditions together as you move toward making it. See how the Property Hub works for more on each area.
Reviewed 28 September 2026.