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What To Look For In An Investment Property?

 

It’s no surprise that finding the right investment property is crucial for long-term success. Whether you're a seasoned investor or a first-time buyer, there are certain key factors to consider when searching for an investment property. Throughout this article, we will explore what you should look for to make the best investment decision and maximise your returns.

 

Location, Location, Location

 

The location of your investment property can make or break your investment. It's essential to choose a location that aligns with your investment goals.

Proximity To Essential Amenities

Properties located near schools, hospitals, shopping centres, public transportation and other essential amenities tend to attract more tenants and yield higher rental income.

Employment Opportunities

Research areas with strong job markets and employment opportunities. Regions with growing industries and diverse job options are more likely to have a steady demand for rental properties.

Future Development

Investigate whether there are any planned developments or infrastructure projects in the area. These can increase the value of your property over time.

Safety And Crime Rates

Check the safety of the neighbourhood and the local crime rates. Low-crime areas are more attractive to tenants and tend to have better capital growth prospects.

 

Property Type

 

Houses

Houses often come with larger land sizes and potential for capital growth. They are attractive to families and offer more control over the property.

Apartments

Apartments are lower maintenance and can provide a steady rental income. They are popular in urban areas but may have higher strata fees.

Townhouses

Townhouses offer a middle ground between houses and apartments. They provide a balance of space and maintenance, making them a popular choice for both renters and investors.

Commercial Properties

Investing in commercial properties, like offices or retail spaces, can offer higher rental yields. However, they also come with more significant risks and management demands.

 

Rental Yield

 

Rental yield is a critical metric for assessing the potential income from your investment property. Calculate the rental yield by dividing the annual rental income by the property's purchase price. However, the amount can vary significantly from one region to another.


Property Condition

 

Inspect the property thoroughly before making a purchase. The property's condition will affect maintenance costs and tenant appeal. Look for signs of structural damage or pest infestations. Renovations and repairs can be costly and impact your overall return on investment.

 

Rental Vacancy Rates

 

Low vacancy rates indicate strong demand for rental properties, which can translate into consistent rental income. You can obtain vacancy rate data from real estate websites, local authorities or property management companies.

 

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Growth Potential

 

Investment property should ideally appreciate in value over time. Research historical property price trends in your chosen area and consider its potential for future growth. Factors like population growth, infrastructure development and economic stability can influence the property's appreciation potential.

 

Property Management

 

Managing an investment property can be difficult, especially if you're not located nearby. Consider whether you'll manage the property yourself or hire a property management company. A property manager can handle tenant screening, maintenance and lease agreements.


Tax Considerations

 

There are various tax deductions and incentives available to property investors, such as negative gearing and capital gains tax concessions. Consult with a tax professional to ensure you are making the most of your tax benefits and complying with relevant laws.

 

Market Research

 

Stay informed about the property market and economic trends. Market conditions can change quickly and being aware of emerging opportunities or potential risks is advantageous for successful property investment. To stay updated, you can follow real estate news, consult industry experts and attend property investment seminars.

 

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Key Takeaways

 

By strategically considering factors such as location, property type, rental yield, condition, vacancy rates, growth potential, property management, tax considerations and market research, you can make informed decisions that work well with your investment goals.

Real estate is a long-term investment which means that thorough research, due diligence and professional advice are all integral to your success as an investor. 

 

Buying off the plan property can be a daunting process, but there’s an easier way. iBuyNew is your all in one solution that supports you at every stage, from search to settlement. 

We take the pressure off you by doing the research, shortlisting the best properties that suit your needs, connect you to excellent brokers and conveyancers and keep you updated throughout the construction process, all the way until you get your keys. Book a FREE discovery call today or call 1300 123 463.

Published on 6th of October 2023 by Davina Deluao
Davina Deluao
Davina Deluao

Davina graduated from Swinburne University in 2018 with a Bachelor of Arts, majoring in Journalism. Through travelling and studying abroad in NYC and LA, her interests in property and design grew and became a strong pursuit. Davina has been writing for iBuildNew Group since 2019.

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