Nine tips to help you find your ideal investment property
13/6/2024
Owning an investment property requires a great deal of discipline around the organisation of your finances. While it’s important to use professional advice and services, such as those offered by an accountant, no investor should assume the general elements of a property investment will look after themselves. It’s vital that you stay on top of your mortgage and tax obligations, while also being very clear on the potential income and tax benefits from negative gearing and write-offs.
In creating an investment strategy, you should also work with a financial adviser to prioritise the benefits from your property investment. Are you seeking an outright profit from day one, or is the purchase strategic to minimise tax or develop a long-term wealth portfolio?
If you’re searching for an investment property, here are nine critical considerations:
When searching for a good investment suburb, always check out the number of vacant rental properties in your target areas. You don’t want to invest where there’s an oversupply or somewhere that doesn’t attract renters.
Compare the rents being asked for similar properties to the one you’re considering. Can you make your numbers work at the going rate?
Are there any significant apartment or housing developments about to come onto the market? For example, a release of multiple units in the area puts pressure on rental incomes. It can also result in a short- to medium-term fall in values and this can affect your ability to get finance.
Areas with readily available work are usually strong potential locations for an investment property. What are the employment opportunities in your target areas? A strong hospitality and casual workforce, typically evident in tourist centres and university towns, is often excellent news.
Finding a property located close to cafes, restaurants and movie theatres can also be a strong attraction if you want young professionals as tenants.
Any location near a university or hospital is likely to attract students, lecturers, doctors, nurses, and others who support health and education professionals.
A rental property near a quality school is often a winner, especially if you’re investing in a house. Families who rent are usually longer-term tenants. If education requires a long bus trip, you may struggle for their tenancy.
Seek advice from police or check the internet for local crime statistics. Vandalism and petty crime can drag down the value of your investment and diminish rental returns.
Research your favoured locations. You might be surprised at the difference in rates from one council area to another, especially if you are considering an interstate location. Always include the cost of rates into your investment calculations.
Once you’ve done your research and are ready to purchase an investment property, your next step should be to speak to one of The Loan Company’s mortgage brokers! We can take the pain out of the process of finding the best interest rate and loan package to support your new investment.
