If you’re thinking of launching into the investment market by purchasing a residential property, there are a few things to consider when it comes to choosing your property.
Invest in a plan
First and foremost, it’s a good idea to map out your plans for this investment. What do you hope to achieve? When do you hope to achieve these goals? These are some questions that may help guide you through this initial planning stage1. Once you have set your goals, you’ll be on the road to finding the investment property that is the best fit for you.
Research the property market
It’s important to familiarise yourself with the properties currently on the market as this may impact where you choose to purchase. Have a look at which areas and suburbs have had lots of recent sales and consider the sale prices of these properties1. It’s also a good idea to think about which areas have a higher rental yield as well as low vacancy rates, as this can dictate the success of your investment.
Consider your target market
When it comes to choosing which type of residential property you want to purchase, consider who would look at renting your property. If you purchase an apartment or unit, you may attract more of a select group of potential tenants – it’s not often that families or anyone other than singles or couples looks to rent a smaller property, such as an apartment2. If you purchase a larger house, you’re more likely to attract families or groups of multiple people. It’s important to take this into account as the size of your property will not only dictate the capacity of tenants but it will also impact the rental price you can select.
The little things matter
It can be easy to get caught up in thinking about the bigger picture that you may neglect the smaller, finer details that could make or break your investment. Consider the age of the property, the features it offers and its proximity to community hubs, such as schools, shopping centres and public transport2. This is where having a clear idea of your goals and ambitions for this investment can really help. The time you take now to think about everything can save you trouble (and money) in the long run.
With everything in mind, get stuck into finding YOUR investment property – the one that matches your goals and ticks most of your boxes.
General Advice Warning: This information is intended to be general in nature and is not personal financial advice. It does not take into account your objectives, financial situation or needs. Before acting on any information in this article, you should consider the appropriateness of the information provided. In particular, you should seek independent financial advice.
Sources:
1Moneysmart, 2022, Property investment, https://moneysmart.gov.au/property-investment
2Andrew Beattie, 2021, Top 10 features of a profitable rental property, Investopedia, https://www.investopedia.com/articles/mortgages-real-estate/08/buy-rental-property.asp