The difference between a sound property investment and a less than desirable property experience can come down to research and communication – strong research into the area you’re interested in, coupled with open and honest communication with your agent and property manager.
Work out what your investment goals are and form a clear strategy on how to achieve that goal.
I’m thinking of buying an investment property. What should I do first?
Do your sums to make sure that it’s something you can afford to do. Speak with a mortgage broker or your bank to get pre-approval in place and understand all of the costs involved and how much you can afford to borrow. Be aware of the extra costs of stamp duty, capital gains tax and land tax if applicable.
What should I look for in an investment property?
Look to buy a property that you would be happy to live in yourself. I think if the home is more appealing then there’s a greater chance of securing a better quality tenant. It will also help in the long run if, and when, you decide to sell. Also be on the lookout for an area that’s going through redevelopment or an area that’s improving with facilities such as shops, schools and transport.
Are there any major differences in the process if you’re buying an investment property as opposed to a property to live in?
Don’t get caught up with emotion. Remember it’s an investment property so try to buy logically and not emotionally. The numbers need to add up and make sense to ensure that it’s a sound long term investment.
Remember that investing in property is a long term investment. The longer you own the property the more equity you build which will then help build your property portfolio. Give the property time to appreciate in value.
Do your research on the area you would like to buy in. Chat with local agents to get a feel for the area, attend open homes and look at recent sales to gauge the prices. This will help you find the right property at the right price.
Find an experienced property manager to help you source the right tenants and manage the property on your behalf. They’ll be able to provide the right advice to help maximise rental return and keep the value in the property by taking care of any maintenance issues and making sure the rent is being paid on time.