Whilst property investing as a concept can be easily understood, making it a profitable venture can at times be tricky.
Select the right property
Investing in property is about creating wealth, achieving capital growth and creating passive income, so selecting a property that is likely to appreciate over time and put money in your pocket is a must. Just like buying that property at the right price.
By researching the market carefully, you can try to find an opportunity to purchase a property below its real market value, this can be tricky, however there are tools around that can help you in the initial selection, and if you are really serious, then hire a valuer to help you determine the value of the property.
Some suburbs may offer higher rental yields, but be careful because often these properties offer lower capital growth potential. Picking the right balance in this area matters, as the wrong choice can halt you in your empire building quick and fast.
If you want the place rented constantly, then it is also essential that you choose the right property type for the demographic profile of the area.
For instance, a family home that is close to public schools may be more desirable than a small unit near a university.
Research the market
Conduct research into the area by using sources such as free property suburb profiles from sources such as RP Data and Residex to understand market factors such as price growth, rental yield, vacancy rates and days on market (DOM) to help you decide whether or not the suburb is a good investment area. I
t’s also a good idea to speak with professionals such as local mortgage brokers, real estate agents, accountants and financial planners to help you decide whether the property and the suburb will suit your investment strategy.
Consider using a property manager
A property manager is a good asset for many property investors. Not only will the property manager be able to give you advice about your responsibilities as a landlord, but they can also organise maintenance and repair issues, and help you find the right tenant by conducting reference checks and ensuring that the tenant pays rent in full and on time. They may also act as a mediator in the event that you have a dispute with your tenant.
Not to mention they can save you time as they do all the legwork that you won’t have to.
Find the right home loan
Finding the right home loan and structuring your loan correctly is vital for the success of your investment strategy, and this should be done with the help of an experienced financial adviser and a mortgage broker.
It’s important to note that most investment home loans these days are set up as principle and interest due to current APRA guidelines. You’ll also need to carefully consider the features that will be most beneficial for your loan, such as an offset account which can help you reduce the amount of interest payable over the life of the loan.
Appeal to tenants
You’ll attract better quality tenants if you present the property in good condition. Consider boosting the sell-ability of your property in order to appeal to both tenants as well as future buyers- this can be done by sprucing up your kerb appeal or ensuring that the kitchen and bathroom designs are neutral and modern. And also by making sure that maintenance is attended to in a timely manner.
Do you need finance to make property investment a reality? Contact me now.