Ideally investing in property should realise positive financial returns, here’s our top 9 tips to property investment success.
The intention behind buying an investment property is, of course, seeing a return on investment – either through rental income or the future resale of the property.
So, when it comes to the eventual purchase it needs to be done much more with a strategic approach. Here’s our top nine tips in property investment:
- Do Your Homework
Research the different areas and types of property that are in demand now or are going to be in demand in the future. Talk to real estate agents, review media reports, seek out information that will help you determine the best growth locations.
- Type of Investment
You also need to determine what kind of investment you will be seeking. Here are the various options:
- Positive cash flow property
- Negative gearing for capital growth
- Renovations to increase value
- Property sub-divisions
- Buy units and apartments
- Get The Word Out
Once you narrowed down your locations and investment type, make contact with the local real estate agents to let them know what you are searching for. This way you extend your search with little extra effort. Also take the time to speak to locals to understand which are the more sought after areas.
- Make the Calculations
But also continue to do your own research into what different properties are selling for in your designated areas. After a while, you will be able to ascertain what properties are worth so you will be able to identify what is a bargain versus what exceeds expected value. If you are unsure, you can always seek out the advice of a mortgage lender who has valuable data on property purchases.
- Will It Make Returns?
While ensuring the property is ideal to gain steady rental returns to achieve regular cash flow, you should also review a property in terms of capital growth possibilities. Having already completed your calculations look at making a purchase that reflects the median range of the area and likely to give you comparable rental returns.
6. Consider the Appeal
If purchase to rent out a property you will have to ensure it is liveable. Is the house in good clean condition and will appeal to a wider market? If you have to do some sort of repairs/renovations how much additional money will you need to invest to get it to a suitable standard? Also, is there good source of rental tenants close by (such as a university) whose needs you should consider?
- Do Your Comparisons
If there are different property options for you to decide between have a look at the immediate services and amenities around the properties. Is there public transport options, schooling, shops and restaurants, sporting facilities. Have a think of who you will be potentially renting the property too and what they would want easy access to.
If you are contemplating on buying into apartments again make sure you look into your options. For new builds look into their history and reputation of the developers and builders and see what projects they’ve previously delivered. If it is an existing building, look at what it already has onsite with relations to access, common areas, car parking etc.
- Take out the Personal
Remember it is an investment property so it is better to look at the purchase strategically rather than emotionally. Keep in mind that you want to see positive returns.
If you’re looking to purchase an investment property, come in and talk to us.