With vacancy rates across the state remaining at or near record lows. Recent data from REIWA suggests that there is an urgent need for more property investors in WA. Here’s your quick 101 guide to buying an investment property.
3 Reasons to Buy an Investment Property
Three of the top reasons people choose to invest in property are:
- Capital growth. Historically, capital growth is a major benefit of property investment.
- Property is generally regarded as a less volatile investment than stocks, bonds, cash etc.
- Potential tax benefits.
Establish Your Investment Criteria
Before you start looking at specific properties it is important to first determine your investment objectives. Are you looking for a high yield, do you want to land bank and subdivide in time, are you happy to renovate or do you want a property that needs little to no work.
Once you work out your investment objectives you’ll also need to assess:
- How much of your own money you will need to cover expenses?
- If you need to spend a large amount of money on improving the property and making it attractive, will it get covered by the cash flow produced by the property?
- Will it lead to higher rental returns and better capital gains? You need to tackle any planned renovations with an investment strategy to ensure you are not just throwing away your cash!
What Makes a Good Investment Property?
If investing in property, an important consideration is location – what is the suburb’s growth potential? When considering an investment property it is a good idea to check out both the short and long term annual growth rate of the suburb. Some other attributes to consider when looking at investment properties:
- Location: is the property close to amenities and reliable public transport.
- Parking: property that provides tenants with a secure place to park will always be appealing
- Outdoor amenity: does the property have a private, secure outdoor area like a balcony, courtyard or alfresco… outdoor options will likely attract a broad range of renters.
- Air-conditioning: for many tenants a lack of air-conditioning is a deal breaker. If the property doesn’t already have air conditioning, be open to upgrading the property so that it does to attract the largest range of suitable applicants.
- Quality fixtures and appliances, that have been well maintained.Â
- Is there any land value? For many investors a property that has no land value is a deal breaker.
More information
Are you ready to look for an investment property? Get in touch with me today to discuss how I can help you find an investment and manage that asset once you do.
Inspired by: REIWA
