With rental vacancies being near all-time lows in many parts of Australia, now is an excellent time to purchase your first investment property or add to your portfolio.
However, your investment needs to be strategic if you want to experience maximum returns and minimise the stress involved with holding the property. Here are some tips for purchasing an investment property as 2023 gets underway:
How to choose an investment property
• Do you research
As shared by propertyupdate.com.au, each state in Australiais at its own stage of the property cycle. Within each capital city and even many smaller towns there are multiple markets, with property values falling in some locations, stagnant in others and even a few locations where housing values are still rising.
The first step when you set out to choose an investment property is to do your research and due diligence so you know the market you’re planning to buy in and you understand its potential challenges.
Ideally, your investment will be in a growth area with strong rental yield and will have the potential to attract reliable long- term tenants.
Questions to ask when doing your research include:
• Upgrade the facade and entryway
• What is vacancy and demand like in the area?
• Are there many new developments planned for the area?
• What amenities (schools, shops, public transport) are nearby?
• What are tenants looking for (e.g. lock up garages, family homes, luxury apartments etc.)
• Work with a good property manager
Another point to consider when you choose an investment property is whether there is a quality property manager nearby who can help to look after it.
Self-managing a rental property is a great deal of work and can become too much if you’re juggling a family and working full-time.
Check the reviews of the agency you are considering working with to make sure it will meet your needs.
A quality property manager should make your life easier by using apps and other digital tools that give you at-a-glance access to information about things like insurance, fees and rental payments. Talk to them about how they will make your experience easier so your investment doesn’t start taking up significant amounts of your time.
• Do your sums
The whole point of purchasing an investment property is to make money. When you choose an investment property, you want the highest rental yield possible, so you must do your sums beforehand.
The best thing to do to ensure that you are making the most out of your future investment property is to talk at length with your mortgage broker and/or financial adviser. Let them know your long-term goal and what you hope to get you to your investment property, and chat about your current budget.
Make sure to take additional costs like council rates, maintenance and any possible renovations and repairs into account before you expand your mortgage.
Think about the level of involvement you want to have
Does your strategy involve purchasing and holding a property for many years while a tenant lives in it, buying off the plan or upgrading it to sell? There is no 100% right way to go but you need to have an idea in mind of the ideal outcome so you can purchase the right type of home.
Work with a good real estate agent
A qualified agent won’t just sell you a property, they will help you find something that matches your goals. Let local selling agents know what you are looking for and they may come to you with the solution.
Ready to invest? Contact me today at teresa@teresaberger.com.au.
