How to Find the Ideal Investment Property
There’s no hard and fast rule about finding the most ideal investment property – there’s actually no “ideal” investment property. Some may say that the best property to purchase as an investment is the one you can afford – and this is in part true. However there are many other factors that go into choosing an investment property.
How to Choose the Right Investment
Firstly, affordability is the key to most investment properties. There’s little point in purchasing a property to improve your financial prospects, only to go broke paying off the mortgage. How much you can afford each week, or month, is important. So too are things such as affording the electricity and water; you may negotiate for the tenant to pay for these during their residency, but if the property is vacant for a short while you’ll still need to cover not only the mortgage but also the utilities. And with no rental income you’ll need to pay it all yourself.
Secondly, the most memorable catch phrase you’ll hear in real estate is location, location, location. And it’s another important factor when finding your ideal investment property. Buy the least expensive property in the most expensive suburb; you can always renovate, however a suburb that doesn’t attract renters will remain that way for a long time.
Buy close to schools and services (hospitals, parks, main roads, public transport) and take into consideration the tenants you’re hoping to attract.
- Single income earners? Close to transport and entertainment.
- Families? Think about an area with a good school.
- Elderly? They’ll need aged care services and possibly a hospital (or at least something close to a medical centre). Of course we’re generalising, but you get the idea. In a recent post we dicussed what tenants are looking for in a property in 2016. It will help guide you in identifying how to attract tenants.
Look for a property with little to do by way of refurbishing and upkeep. The last thing you want to do is buy a property and then spend weeks – and lots of money – repairing and painting. If repairs are essential, buy the best you can afford otherwise you’ll simply be doing it again in the near future.
Make your Shortlist
Shortlist your property selections and write down a list of pros and cons. What is good about the property? What is bad? What do you like or loathe – no matter how small. How would they appeal to your target market? Can you afford the mortgage, utilities, repairs, rates and upkeep?
Once you’ve decided and found a reputable lender, then consider a property manager. In the end , they will save you time and money. Finally, speak with a professional organisation and don’t settle for less than you – and your new investment property deserve.