When considering an investment property, whether you are a first home buyer or considering a real estate investment, there are several important things you might like to consider.
Property investment is usually seen as a long-term investment that generates reliable returns over a period of time.
Of course, there can be exceptions to this, such as the last couple of years where real estate investments have steamed ahead by about 35 per cent.
But this growth is not seen as sustainable, and the big banks are forecasting a ‘correction phase’ where Australian house prices go up or down by three per cent in 2022 and fall by eight to 10 per cent in 2023.
But even when you take out the 9 – 12 per cent in the ‘correction phase’, property prices continue to grow.
But there is more than the market to consider when investing in property. Choosing the wrong rental property, investment property or making bad investment decisions can lead to poor returns. Use the following questions to help you make a great choice.
Does the investment property you are looking at have long-term appeal, or a current trend? Invest for the long term as trends will change.
Look at the vacancy rates in your neighbourhood and avoid those with high vacancies.
Research sale prices in the area so that you know the market.
Look at the demographics in the area. What is the crime rate? What is the unemployment rate?
Is your potential investment property built in an area prone to natural disasters such as floods or bushfires—this can dramatically impact the cost of insurance.
So, let’s look in a little more detail at three things, location, price, and maintenance, that can maximise your chances of a good outcome when investing in property.
Without a doubt, the most important thing when choosing your real estate investment is location.
If you are looking to attract families, it could be important that the suburb is safe, close to schools and sporting facilities.
If you are looking to attract young professionals to your rental properties, then access to public transport, restaurants and cafes would be important.
You also need to be aware of future infrastructure developments in your suburb and whether businesses are expanding or leaving the area.
You need to ensure the price you are paying for your rental property or commercial property represents the true property’s true value.
The property’s true value is more than whether you can afford the purchase price of your investment property.
The purchase price of the investment property needs to consider whether the property is undervalued and its potential growth.
Before purchasing a rental or commercial property, you need to find out what the additional costs will be. One of your biggest costs will be maintaining your property investment.
You should look for an investment property with minimal maintenance issues and low monthly upkeep costs.
Poor maintenance can make it difficult to attract tenants and damage your investment returns in the long term.
Of course, these are just some of the considerations you should take when thinking of purchasing an investment property.
One way of taking some of the risks out of investing in property, whether you are a first home buyer or someone looking to get into property investment, is to engage a real estate agent.
Maloney’s Property is a trusted and seasoned real estate agency in the Canberra Region and has worked with many people to get into investing in property.
Once you have purchased your investment property, whether a residential or commercial property, Maloney’s Property can also assist you with property management, allowing you to continue in your day job as your rental property continues to work for you as an investment.
Contact Maloney’s Property to arrange a time to discuss your real estate investment needs and management.