5 Things To Look For In An Investment Property

Did you know? Less than 1% of Australians own 6 or more investment properties. The Australian real estate market is growing exponentially, and this is the best time to buy an investment property. When it comes to investing in property, there are a few things you need to consider.

This article will look at five key factors to consider when investing in property.

Is the Property Close to Public Transport and Amenities?

When looking for an investment property, it's important to consider its location. You want to ensure the property is close to public transport and amenities, so you can easily get to it, and it's convenient for your tenants.

So do your research and ensure the property is in a good location before buying it.

What Is the Current Condition of the Property?

You want to ensure that the property is in good shape and doesn't need major repairs. Otherwise, you'll be spending a lot of time and money on fixing it up, and that's not something you want to worry about when trying to make a profit.

What Is the Rental Yield?

Rental yield is a vital factor to consider in investment properties. What is rental yield? It's the annual rent divided by the purchase price. So, if you buy a property for $100,000 and rent it out for $10,000 a year, your rental yield is 10%.

You want to find a property that has a high rental yield. That way, you're making a good return on your investment. To calculate your rental yield, use this formula: (annual rent ÷ purchase price) x 100.

What Is the Potential for Capital Growth?

Capital growth is one of the most important factors when looking up investment properties. You want to make sure that the property has the potential to appreciate over time. But how can you tell whether a property will appreciate? There are a few things to look for:

• - The first is location. You want to invest in a neighbourhood with steady or growing demand because the potential for capital growth is high.

• - Secondly, you'll want to look at the valuation of the property. Make sure it's priced significantly lower than comparable properties in the area. That's a good indicator of future capital growth.

• - Third, you'll want to check the cash flow of the property. Ensure it's generating a positive cash flow, so you're not putting any extra money into it each month.

And finally, make sure that the property has good profit potential. That means you should be able to recoup your investment relatively quickly and see a healthy return on your investment.

Is the Property Tenanted?

Renters are always looking for properties in great locations with all the features they need, so if your property ticks all those boxes, you're likely to have a steady stream of tenants.

Another thing to look for is a property near grocery stores and schools. This ensures that your tenants have everything they need right at their doorstep.

Smart tip: Hire a buyers agent, like Locate Buyers Agency, if you don't have the time to look for these factors in an investment property before purchasing one. These professionals know what to look for and will keep you from making costly mistakes.

Always check out these factors before investing in any property, or to make it stress-free, involve a buyers' agent.

• Prev
• Next