Tips for buying an investment property
Investing in property is one of the tried and true methods of consolidating your financial future. However, choosing the right investment property is critical to your investment strategy. Rental returns and capital gains are the two factors that you need to consider carefully.
Here are some tips when buying your next investment property.
Where to buy
In the first instance, it can be beneficial to buy an investment property in a suburb that you are familiar with – perhaps close to where you live because you know the market, you know what types of properties are selling, the current prices and so on.
Let you head and heart rule
While buying an investment property is generally a less emotional decision than when you are buying a home that you want to live in, don’t discount your feelings about a place. If it feels right for you, chances are others will want to live there and that means it will be a good rental proposition.
You want to make sure you buy the right property to maximise your long-term investment returns.
Chose the right investment property
Make sure the property has:
• the right aspect – you can’t beat north or north-east facing for the main living areas
• is preferably not on a main road – a quiet back street is far more desirable than a noisy main road
• is neat and tidy with minimum maintenance of gardens required.
Think about proximity to services for tenants
Proximity to services is something that renters are interested in so places that are difficult to get to by public transport, that are not close to shops and other services should be avoided.
Having a property in a good location is a key element for getting good tenants and consistent rental returns. It is also significant when the time comes to sell and cash in on your investment.
The three main convenience factors:
• Close to public transport
• Close to shops
• Close to cafes, pubs and restaurants
You might consider the third point a bit of a luxury, but Australians, and young Australians who make up a large component of the rental market, want to go out and have fun. The café culture is here to stay in Australia so having your investment property close to where people want to go is a considerable bonus.
So what type of property should I buy – house or apartment?
Houses are by far the more common type of property in Brisbane but recently more apartments are being built. Whether you buy a house or apartment, buy the best you can. Avoid any that require lots of renovation and work unless you really love this type of thing. If buying an apartment, avoid ones with high strata levies or blocks with fewer than 65 per cent owner-occupation.