How To Find the Perfect Investment Property For You
Perhaps the most important thing to understand when considering the purchase of an investment property is that this is a financial decision – not a personal one! Therefore, you must think like an investor and select a property that has the features that will appeal to your idea of the perfect tenant.
Below we’ve offered some guidelines on the key factors to consider when choosing the perfect investment property –
What Type of Property Should You Buy
What kind of investment property are you looking for: of course it all depends on your budget and what you’re hoping to achieve from property investing. Perhaps you’re looking to purchase a holiday rental, a unit, or even a house. Do you want to buy an existing property, or would you prefer to buy off the plan? Whatever you decide, this will determine your upfront and ongoing costs, plus the level of rent you’ll be able to receive.
Location, Location, Location!
We’re always hearing real estate agents saying it’s all about location, and it’s absolutely true: particularly if you’re buying a property. You have to be confident that the property you purchase will increase in value over time, whilst providing you with a healthy rental return.
Factors to consider when looking for ‘location’ is the property’s proximity to amenities such as schools, healthcare, and public transport; and remembering that people also prefer to live close to shopping and restaurant facilities.
Check out other local properties for sales and rental prices: this information is freely available online, or have a discussion with your trusted real estate agent. A good agent will be a reliable source in assessing the property market in your chosen area.
Many property investing newbies look to see how the property has performed over the past couple of years, but ideally you’re looking for a long-term investment so you should be looking to see results for the past 10 to 20 years. This will include the anticipated population growth for the area you’re considering buying into.
Another very important factor to include in your research is what developments are proposed for the area, including any State Government proposals that could well affect the value of your investment property.
With your investment you’ll obviously be hoping for a regular rental income, so your aim should be to maintain high occupancy rates: you do this by offering a well-priced property containing all the features tenants hope for in a home. Some of these features are –
- Internal laundry;
- Second bathroom;
- Air-conditioning (if appropriate);
- Garage or ample car parking.
These features alone will maximise your rental income. When looking for an investment property to purchase, be very meticulous in looking for existing damage and maintenance or renovations that will be required; in addition to opportunities that exist to add value to your property. Sometimes all it takes is a fresh coat of paint or a minor renovation and you’ll achieve a higher rental return.
Looking for the best Investment that ticks all your boxes?
A Mortgage Broker can help you.
Call 1300 668 361 to discuss
Hours: M-F 8AM – 5PM
81 The Parade, Norwood SA 5067