How to choose the right investment property
If you want to find a great investment property, here are a few tips you should keep in mind.
A successful real estate investment starts with a good investment property. Not every house or unit is made for investment so it’s important that you choose the right one. It’s best to take your time and do your due diligence before buying a property to invest in.
If you want to find a great investment property, here are a few tips you should keep in mind:
Figure out your budget
First and foremost, you need to figure out how much you can afford. Review your finances carefully to work out your price range. You could also get a pre-approved loan to see how much you could potentially borrow from lenders. A pre-approved loan also gives a head start in getting your investment property finance sorted.
When looking for an investment property, always stay within your price range. It may be tempting to buy something a bit more expensive, thinking that it could offer bigger returns, but doing so could set your investment goals back even further. It’s always best to stay within your financial capabilities.
Take note, there’s more to buying an investment property than the purchase price. You must also consider the maintenance costs, stamp duty, insurance, and other related expenses.
Research the area carefully
The location of your property can make or break your investment. Some areas may be better for rental properties while others are great for house flipping. Every suburb has its pros and cons, as an investor, you need to discern where your best options are.
When you have a budget in place, finding the perfect suburb to invest in is easier because you can use your price cap as a guide. To help with your research, you could get a free suburb report which includes comparative market analysis, market data, demographics, and other important information.
Go around the suburb yourself to see the lifestyle. Look for schools, ease of public transportation, shops, cafes and restaurants, outdoor areas, and the like, as these could be good indicators of the type of people living there. You should also pay attention to future developments in the area, as this could affect the longevity of your investment.
Understand different property types
Houses and units are very different properties. When investing in real estate, it’s best to understand how these two differ to easily figure out which one is better suited to your investment goals.
Houses tend to be more expensive for maintenance but attract long-term renters or could net a higher profit (depending on the location). Units, on the other hand, typically require less maintenance and are cheaper to renovate, but they could have higher vacancy rates or sell for lower compared to a house.
If you’re looking to sell a property, consider the renovation costs and timeline of sale. Houses usually sell quicker than units because of demand and more diverse buyers, but they’re more expensive to renovate. Meanwhile, units can be less costly to renovate, but the pool of buyers may be limited, which could mean the properties spend longer on the market.
Think about the property features
The features of the property can make it more attractive to certain renters or buyers. It could be a good idea to determine your target demographic and find ways to cater to them by making the house or unit better fit their lifestyle.
A house with a large yard, for example, may attract more families as there’s plenty of space for kids. Alternatively, this type of property may not be ideal for an elderly couple due to too much upkeep. This is where your suburb report can come in handy as it can guide you on what type of property is more profitable in certain areas.
Features like a garage, additional bathrooms, or a home office space will go a long way in increasing the property’s rental value both in rental yield and tenant security. Having a property with eco-friendly features can also be a great boon to renters or buyers as it can save them money on utility bills.
For units, consider the parking situation, what floor it’s on, and the like. The amenities of the building the unit is in could also play a role in attracting tenants. Also, consider the age of the property. Older properties may need more regular maintenance, repairs, and upgrades.
Find the right investment property loan
Before you make moves to buy that investment property, you need to get a good loan to finance your purchase. If you're looking for an investment property loan with low rates and useful features, loans.com.au has a range of investment finance options you can choose from.
If you want to learn more, call us at 13 10 90 or arrange a call with our friendly lending specialists. You can also apply online today and start your investment journey sooner!
Find out in under 2 minutes if you qualify for one of our low rate home loans.
About the article
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.
