Expert Tips On Buying An Investment Property
Investing in property can be exciting and stressful at the same time. Considering every aspect of your new investment will ensure you achieve a desirable return and get the most out of your finances. It can be daunting especially if you are new to the market, so these tips provide a handy guide to getting started.
Maximise Desirability Of Your Investment Property
Looking for desirable property features will increase the value of the home and make sure you get your investment back. Features which will always be in high demand include a second bathroom, a covered, lockable garage or great local facilities such as nearby shops and transport. These attributes help your home appeal to a wider audience and boost its value. Look for something which is suitable for a variety of buyers, from families and young professionals to singles and retirees. A versatile home and location will be easier to resell later on.
Consider Going Low-Maintenance
Maintenance is a key factor in many investment properties, for both you and potential buyers. Firstly, most investors don’t want to be spending a lot of money and time on upkeep. Secondly, a low-maintenance property will be easier to market and sell to others in the future. Properties with pools or extensive landscaping are often harder to maintain. Be aware that older houses are more likely to need repairs than newer houses. There are pros and cons to most types of homes of course. For example, buyers who invest in units choose a low-cost and low-maintenance option but will likely need to pay body corporate fees.
Do Your Research
Many investors choose property in an area they are already familiar with. This benefits the investor because they likely already have a solid understanding of the neighbourhood and the local property market, making research a lot easier. A simple way to get an estimate of property prices in any area is to check recent sale prices and new listings online. You can search similar properties to determine the approximate renal yield, ultimately looking for areas where the rent ranks well against the total property value.
When choosing where to buy, remember that property values can fluctuate over time. Some suburbs have higher projected growth than others, which provides better potential for capital gains. You should also research the vacancy rates of the neighbourhood. If there is a high vacancy rate this could be a sign the area is not very desirable and might impact your rental opportunities in the future. Research new developments or changes to the zoning in the area, so there are no surprises a few months after buying.
Once you have a property in mind, think about the income you expect to receive from it, and what your regular expenses will be. If there is a shortfall, think about whether you can cover it long-term. Also, work out whether you could cover all expenses short-term if you had no tenants for a while. Stick to your budget once it’s outlined; a lot of investors fall into the trap of buying in the spur of the moment and overextending their finances. If it is your first time investing, make sure you leave a margin of error so that any hiccups in the plan won’t ruin all of your hard work.
Disclaimer: The opinions and advice expressed on this site are for reference purpose only. The users should make all the necessary checks about their feasibility before implementing them. This site does not warrant any accuracy of information and does not make any claims in this regard.