ABC of buying an Investment Property – Have i got it right?

Apologies if I sound like a 15 year old…well I am twice that age but when it comes to dealing with finances, I can easily stand for a 15 year old.

What I am hoping to get out of this post is to clarify my understanding of some basic aspects of Property investment.  I would like to get everything on paper (bullet point form). I believe once I have a strong foundation on this, I can go a step further. Until then I am stuck here.

Please expand/refine/suggest what you think should be under following key aspects of IP:

Hope this might help others who are under the same situation as I am!

Buying an investment property in Australia

Income from investment property:

Rental income

Expenses (that can be offset for tax benefits)

Loss in mortgage payments (if rental income is lower than repayments)

Maintenance expenses

Depreciation

Property manager expenses (if used to maintain property)

Strata fee (if any)

Water and council rates

Building insurance

‘Real’ cost to buy an IP

Sell price

+ Stamp duty

+ Bank fees

+ Settlement fee

‘Real’ cost when selling an IP

Sell price

– Agent fee (if involved in selling)

– Advertising cost

– Settlement fee

Net Profit

Profit = Sell price – Buy price

Net profit = Profit – Capital gain tax