Buying an investment property requires a lot of research and informed decision-making. Your ultimate goal is to find a property that will hold the most potential for profit and give you the best return. To help you get started include these major factors in your research before you start narrowing down your search.
Local Infrastructure
It’s important to carefully consider the area in which you want to buy. Look at all the factors that will impact the value of your property and the rental appeal. One major aspect will be the local infrastructure: what sort of amenities, services, job opportunities, educational institutions etc. are present and how is this likely to affect the value and appeal of your property to potential renters and/or buyers. For example, if your property is close to the CBD it may appeal to professionals, while if it’s near a school it might appeal most to families or near a university it may appeal most to students. Look for a neighbourhood with sound infrastructure, growth potential, trending property values and low crime rates.
Town Planning
You can check with the local council what plans are in store for the future of the locality. An investment property will need to appeal to renters (if you plan to rent it out) and have the potential to grow in value over the years, so the future should be at the forefront of your mind. Growth in the area can be a good thing, but look at the specifics. Don’t be caught by surprise when it comes to future developments that will affect your property. These can either work heavily in your favour or threaten to decrease the appeal of your property.
Supply vs Demand
Consider the supply to demand ratio of the area you’re considering. This will help give you clues about how easy it is to sell a house, how much the area appeals to buyers and renters, and how scarcity might contribute to property values. For example, a sought-after area might mean your property can fetch a higher price and sell with ease.
Rental and Resale Appeal
Consider the appeal of the house itself, not just the area. You’re not buying this house to suit you, you’re actually looking for a house that will appeal to a wide target of potential renters and buyers. It should be made up of practical spaces and neutral features. If you’re building your own house on the land, go with a reputable builder like Coral Homes Australia, who will have years of experience in creating homes with wide appeal.
Property Trends
Either through your own research or with the help of a local real estate agent, get as much information as you can about property trends in the area. Saturate yourself in statistics and see how the market fares over time. Things like rental values, property price trends, sales stats, even demographic information can all help you choose a property with the best potential for profit.
The best asset you can possess when it comes to finding the ideal investment property is information. Come armed with all the knowledge and research you can accumulate and you’ll be able to choose a property with maximum potential.
