Investing in property has always been a popular investment choice, in particular residential housing. This can be at least partially attributed to more consistent returns than other types of investments when measured over the long term. Nevertheless, there are some things to look out for when making a decision to invest in a property – here’s 4 of the most important:
Look At The Property’s Quality
The quality of the property should be a big factor in any property investment decision – in particular, the features of the property should be appropriate to the market and location (apartments should have security, family suburbs should have at least 3 bedrooms, etc). Being low maintenance is also important, so check to make sure the garden or any surrounding areas are well kept. You would be well advised to also get a pre-purchase building inspection and pest inspection done as well – you don’t want any surprises. To get additional info, look at this site
Know Your Returns
First of all, you should decide what exactly you hope to achieve from your investment – positive cash-flow in the form of rent, or capital gains from rising property prices (or both?). Then estimate the total costs of owning the property, such as the investment loan, insurance, council rates, etc. Next, conservatively estimate what you could rent the property out at per week, taking into account the rates of surrounding houses and the property’s features. If the expenses outweigh the rental income, then you’ll be relying on the potential capital gains and tax deductions to make your investment worthwhile.
It’s a tired cliche, but the location of the property has a huge bearing on its potential. Check that it’s close to public transport, shopping centres and entertainment, and look at the potential growth of the area.
Have a Back-Up Plan For Vacancies
Make sure that if your property is vacant for any period of time, you’ll be able to cover the expenses of the investment without the rental income. If you’re finding it difficult to get tenants, you might want to enlist the help of a property management agency. If you have a well maintained and tidy home in the right location, then you might not have to worry about this point so much, but it’s always better to be prepared.