It’s an old real estate cliché, but “location, location, location” is never more true than when selecting an investment property.
The area and style of property in which you chose to invest will determine the type of tenant and level of rent that you will attract.
You must research your target area. You want to know local demand for rentals in that location and whether houses or units are more popular with renters.
Typically, houses are more expensive but will provide better capital growth because of the land component.
Units are easier to maintain, reducing ongoing maintenance costs, and attract those who prioritize lifestyle over space.
As your real estate agent, I’d be happy to help you find some potential investment properties.
Here is a checklist of items to consider when we start the hunt.
- The location is essential – Properties around city centres, hospitals and universities can be more attractive for those seeking to attract workers, students and others interested in taking advantage of the location.
- Check local amenities – Being located with access to popular amenities such as public transportation routes, restaurants and shopping centres could make a property more attractive. Also, take into consideration a property’s proximity to airports, train stations and busy roads – this can affect the amount of rent you’ll be able to ask.
- Does a house or unit make sense? – Real estate investment is all about building wealth, so your choice needs to be decided by the numbers. Capital growth varies depending on what you buy. Houses perform best because they have land, but they’re usually more expensive. Units can be easier to maintain but will come with the overhead of strata costs. Don’t mix your personal preference with dollars and cents. Focus on your bottom line because this is an investment.
- Listen to the rental market – While money talks so does your target market. The style of property should be based on the demands of tenants who want to live in the area. The key here is to understand whether you’re buying a property that is suitable for rent in its area. As your real estate agent, I can guide you on this element of selection.
- Avoid fixer-uppers – Unless you’re in the construction game and you’ve found an absolute bargain, you’ll probably want to avoid spending your investment dollars on repairs or structural modifications. Instead, focus on a property with good fixtures in the kitchen and bathrooms. You may need to re-paint, even update a vanity or kitchen benches, but try to stay away from big-ticket items to maximise your return.
Finally, when considering an investment property, always make sure you get professional advice first. Speak to your financial advisor or accountant to make sure the investment makes sense for you right now and will help you achieve your wealth goals.