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The process of buying an investment property

First Step: Find what you can afford to spend on the property.
Work it out yourself or better still let the financial institution do it for you.
TIP:  Different Financial institutions use slightly different criteria?s to do their lending figures, depending on your situation. Some may be willing to lend you almost double of others. So if your financial institution isn't prepared to lend you what you had expected don't get dishearten get a few institutions to do figures for you.
This is the where the value of a broker can come in. An experianced broker should know the institutions that will lend more than others.

Basically The Financial institutions want to know 2 things.

1. The ability to service/repay the loan?
The financial institution do the figures to work out what you can reasonably afford.
The Financial institution will take into account your current incomings (usually wages and any other income producing assets) and compare these to your outgoings (expenses to live, other debt repayments etc.) BEWARE they also take into account the possibility of further debt outgoings, as an example you may have a credit card or a store card like a Myer or Target card, while you may not owe anything on these now, the Financial Institution will do their sum's as if all these cards at their maxium credit limit, and do the figures as if you are paying maximum repayments.

TIP: if you want to borrow more, but find you can't.
Cancel or reduce the credit cards. You can always apply for them again, after getting the loan you want. (FINANCIAL INSTITUTIONS LOVE TO GIVE CREDIT CARDS TO PROPERTY OWNERS)

2. Is there enough equity in your assets, should the institution need to sell the property to get their money back. The financial institution will lend only a proportion of the worth of your asset/s

Because property is viewed as probably the safest of all investments most financial institutions will lend up to 97% of your assets (=LVR 97%), e.g. if you buy a property for $200,000 the financial institution will lend you $194,000 all you need to find is $6,000 + costs.
If you already own other assets like a home that you own or are paying off they will take this into account which may make it possible to buy your investment property with out having to find any cash.

Example you own a home valued at $400,000 and owe $255,000 and you want to buy an investment property for $200,000, the financial institution will do their figures.

Total assets $650,000

Liabilities      $455,000

LVR      =      70%
Loan to Value Ratio

In most cases the financial institution will walk over broken glass to get your business, as your LVR is only 70% also they will have no problem lending you the cost of buying as well.
As long as #1 the ability to service the loan is adhered to

If your LVR stays under 80% you save yourself mortgage insurance.

Second Step get pre approved to an amount you are happy with.
It will cost you nothing and may help you enormously.
1. You will know exactly what you can afford to spend
2. When you are negotiating for the property, having pre approval this "strengthens" the contract, 
    Q. What does a seller want when agreeing to a price?
    A. That the buyer will not default because they can't get finance.
3. When you buy it "SAVES YOU" the hassle of finding statements etc. thinking what if I can?t find it will we lose the property, 
Pre approval makes life easier and "WILL REDUCE YOUR STRESS"

Third Step think about what type of a property you really want.

If you are going to share with family, what type of activates do you want the resort to have to amuse the children?  If the property is for business what facilities will make business better?

What suburb suits best, do you want to be close to the action? or do you prefer a quiet location or maybe something in between?

Does a "bang on absolute beachfront" really matter?

Forth Step compare properties in your price range and get a feel for those properties.

Is your price range going to buy you all your wants and needs.

If so, great choose the one you like the best.

If not, what am I willing to sacrifice, what do I really want and need? 

Which property type will give me the most of my needs and wants

Fifth Step is once you find the property you like,

Sign the contract,

Pat yourself on the back,

Get a bottle of champagne and have a sip or two.

Relax, don't stress all your hard work is done, once the agent has sent the contract to the solicitors it is now in the solicitors hands to get the vendor paid and your institution to supply the "pre approved" monies.