Why Choose WHY Property Investment?
At WHY Property Investment, we specialise in helping investors secure high quality investment properties across Brisbane, Gold Coast, Sydney, Melbourne, and throughout Australia. Our experienced team is committed to helping clients make informed property decisions backed by research, strategy, and on the ground market knowledge.
We understand that successful investing is about more than simply buying property. It is about selecting the right asset, in the right location, at the right time, with a clear long term strategy in place.
Welcome to the WHY Property Investment Property Glossary.
Whether you are a first home buyer, experienced investor, international buyer or simply researching the Australian property market, understanding the terminology used throughout the buying and investing process is extremely important.
This glossary has been designed to help explain common property, finance, investment and real estate terms used across Australia in simple, easy to understand language
Adjustable Interest Rate
An interest rate that may increase or decrease over time depending on market conditions and the lender’spricing structure. Also commonly referred to as a variable interest rate.
Agency Agreement
A legal agreement between a property owner and a real estate agent authorising the agent to market and sell or lease the property.
Apartment
A self contained residential dwelling located within a larger building or complex.
Appreciation
An increase in the value of a property over time.
Auction
A public sale process where buyers bid competitively for a property. The highest bidder above the reserve
price is usually successful.
Auction Reserve Price
The minimum price a seller is willing to accept at auction.
Australian Credit Licence (ACL)
A licence required for businesses or individuals providing credit services or loan advice in Australia.
Australian Property Market
The collective residential, commercial and industrial property markets operating throughout Australia.
Balance Transfer
The transfer of debt or loan balances from one lender to another.
Balloon Payment
A large lump sum payment due at the end of a loan term.
Body Corporate
An organisation responsible for managing and maintaining common areas within unit, apartment or townhouse complexes. Also referred to as Owners Corporation in some states.
Borrowing Capacity
The amount a lender may allow a borrower to borrow based on income, debts and financial position.
Bridging Loan
A short term loan used to bridge the gap between purchasing a new property and selling an existing one.
Broker
A professional who helps arrange loans, finance or insurance products.
Building and Pest Inspection
An inspection conducted by qualified inspectors to identify structural defects, termite activity or maintenance issues.
Buyer’s Agent
A licensed professional who represents the buyer throughout the property purchasing process.
Capital Growth
The increase in a property’s value over time.
Capital Gains Tax (CGT)
Tax payable on profits made from the sale of an investment asset such as property.
Cash Flow
The money remaining after property income and expenses are taken into account.
Caveat
A legal notice placed on a property title to protect an interest in the property.
Certificate of Title
A legal document showing ownership details of a property.
Collateral
An asset offered as security for a loan.
Commercial Property
Property used for business purposes such as offices, warehouses or retail shops.
Comparative Market Analysis
An assessment of recent comparable property sales used to estimate property value.
Compound Growth
Growth calculated on both the original amount and accumulated growth over time.
Conveyancer
A professional who manages the legal transfer of property ownership.
Cooling Off Period
A legally allowed period where a buyer may withdraw from a property contract under certain conditions.
Cross Collateralisation
Using multiple properties as security against one or more loans.
Debt to Income Ratio
A calculation comparing a borrower’s debts against their income.
Deposit
The upfront amount paid towards purchasing a property.
Depreciation
The reduction in value of a building or asset over time, often claimable as a tax deduction.
Development Approval (DA)
Approval from local council to undertake building or development works.
Duplex
A property containing two separate dwellings on one title or subdivided titles.
Easement
A legal right allowing another party to access or use part of a property.
Equity
The difference between a property’s value and the outstanding loan balance.
Established Property
A property that has previously been owned or occupied.
Expatriate
An Australian citizen or resident living overseas.
Exchange of Contracts
The formal process where signed contracts are exchanged between buyer and seller, making the transaction
legally binding.
Finance Approval
Approval from a lender to provide a home loan.
First Home Buyer
A person purchasing their first residential property.
Fixed Interest Rate
An interest rate locked in for a specified period.
Flood Overlay
Council mapping identifying areas potentially affected by flooding.
Freehold Title
A form of ownership where the owner holds full ownership rights over the land and property.
Gearing
Borrowing money to invest.
Genuine Savings
Savings accumulated over time and recognised by lenders as evidence of financial discipline.
Granny Flat
A secondary self contained dwelling located on the same property as the main residence.
Gross Rental Yield
Annual rental income divided by the property purchase price.
Holding Costs
The ongoing costs associated with owning a property including loan repayments, rates and insurance.
House and Land Package
A package combining the purchase of land and the construction of a new home.
Housing Supply
The number of residential properties available within a market.
Income Protection Insurance
Insurance designed to replace income if unable to work due to illness or injury.
Infrastructure
Public facilities and services such as roads, schools, transport and hospitals that support communities.
Interest Only Loan
A loan where repayments initially cover only the interest charged.
Investment Grade Property
A property considered to have strong long term growth fundamentals and broad buyer appeal.
Investment Property
A property purchased primarily for generating income or capital growth.
International Buyer
A purchaser who is not an Australian citizen or permanent resident.
Land Tax
A state government tax applied to investment property land holdings above certain thresholds.
Lease Agreement
A legal agreement between landlord and tenant outlining rental terms.
Lender
A bank or financial institution providing finance.
Lenders Mortgage Insurance (LMI)
Insurance protecting the lender when a borrower has a smaller deposit.
Leverage
Using borrowed funds to increase investment exposure.
Loan to Value Ratio (LVR)
The percentage of a property’s value borrowed through a loan.
Median House Price
The middle property price within a market when all prices are ranked from lowest to highest.
Mortgage
A loan secured against property.
Mortgage Broker
A professional who helps borrowers compare and arrange home loans.
Mortgagee
The lender providing the loan.
Mortgagor
The borrower taking out the loan.
Negative Gearing
When the costs of owning an investment property exceed the rental income received.
Net Rental Yield
Rental income remaining after expenses divided by the property value.
New Build
A newly constructed property.
Nomination Clause
A clause allowing another party to be nominated on a property contract.
Off Market Property
A property available for sale without public advertising.
Offset Account
A bank account linked to a loan where funds reduce the interest charged on the mortgage.
Owners Corporation
Another term for Body Corporate.
Passive Income
Income earned with limited ongoing active involvement.
Principal and Interest Loan
A loan where repayments reduce both the loan balance and interest.
Pre Approval
An indication from a lender of the amount they may be willing to lend.
Property Cycle
The stages of growth, stability and decline within a property market.
Property Management
The management of rental properties on behalf of owners.
Property Portfolio
A collection of investment properties owned by an individual or entity.
Purchase Price
The agreed price paid for a property.
Quantity Surveyor
A professional who prepares depreciation schedules for investment properties.
Redraw Facility
A loan feature allowing access to extra repayments made on a loan.
Refinancing
Replacing an existing loan with a new loan.
Rental Appraisal
An estimate of the likely rental income a property may achieve.
Rental Yield
The return generated from rental income relative to property value.
Reserve Price
The minimum sale price acceptable to a seller at auction.
Residential Property
Property designed primarily for people to live in.
Security
An asset used to secure a loan.
Settlement
The final stage of a property transaction where ownership transfers to the buyer.
SMSF
Self Managed Super Fund.
Stamp Duty
A government tax payable on property purchases.
Strata Title
A form of ownership commonly used for apartments and townhouses where owners share common property.
Subdivision
The process of dividing land into separate lots.
Serviceability
A lender’s assessment of a borrower’s ability to repay a loan.
Tenancy Agreement
A legal agreement between landlord and tenant.
Tenant
A person renting a property.
Title Search
A search confirming ownership and legal interests affecting a property.
Townhouse
A multi level residential dwelling often sharing walls with neighbouring properties.
Unconditional Approval
Final lender approval confirming finance is fully approved.
Unit
A self contained dwelling within a larger development or complex.
Vacancy Rate
The percentage of rental properties currently vacant within a market.
Valuation
An assessment of a property’s market value conducted by a qualified valuer.
Variable Interest Rate
An interest rate that may fluctuate over time.
Vendor
The seller of a property.
Walk Through Inspection
A final inspection conducted before settlement.
Waterfront Property
A property located directly on water frontage.
Yield
The return generated from rental income relative to property value.
When purchasing property in Australia, buyers may encounter:
Buy and Hold
Purchasing property and holding long term for growth.
Renovation Strategy
Improving a property to increase value or rental return.
Development Strategy
Adding dwellings or subdividing land to create value.
Cash Flow Investing
Focusing on properties with stronger rental returns.
Capital Growth Investing
Focusing on long term property appreciation.
Understanding property terminology can help buyers and investors:
For assistance with property investing, first home buying or building a property portfolio across Australia, contact WHY Property Investment today.
