“Buying your first Investment property is one of the most important financial steps you’ll ever take.”
While it’s an exciting time, it’s also essential to give careful thought to this new venture to ensure you are making the right choice. Here are some things to consider:
Do your homework
Don’t rush in and buy without doing some research. Read up on property investment and make enquiries about market values and rental incomes in areas where you are considering buying.
Choose an area where the population is stable or increasing. This should indicate a need for rental properties, making it easier for you to keep your property tenanted.
A property located close to shops, schools, and transport is well worth considering. These facilities make it appealing to tenants and assist its capital growth prospects.
It’s an old but true story that there are great advantages to good locations. Try and tick the boxes in regards to neighbourhood, street and facilities.
Decide whether you want something new, or something that will need repairs but will cost less. Remember that an older property could require ongoing maintenance down the track.
Keep it average
An average property makes financial sense. A prestige property would bring in bigger rent but could be left vacant in a recession, and low-end properties could attract a bad tenant.
Cover your costs
Try to ensure your rental income will cover mortgage repayments and other costs such as insurance, maintenance and rates. If not, negative gearing helps but you may prefer to look for a less expensive property.
There could come a time when you want to put your investment property on the market. Think about why it appeals to you now as an investor, and ask yourself whether that appeal will apply to future purchasers.