What To Consider When Buying An Investment Property
The Golden Nugget of Buying an Investment Property
We’ve all been given that one golden nugget of advice when you’re looking to buy a home: always purchase the worst house in the best street, or was that the worst house in the best suburb? Buy on the high side. Don’t buy near a prison. Buy near a Police station. Look for good schools. Make sure the motorway is nearby. Don’t even think about a corner block. When you want to buy an investment property, though, are there any pieces of great advice, or is it pot luck? What do you need to consider when buying an investment property?
Buy what you can afford
The first – and most important – piece of advice is to buy what you can afford. Yes, you’re going to rent it out however there may be times when the property is vacant and landlord’s insurance might not cover every instance. You’ll need a property you can afford the upkeep, as well as the mortgage, on.
Consider negative gearing
This is when the cost of running an investment property outweighs the money you make from it; you can claim these costs back from your total income (you need to have another source of income to claim against). Bear in mind, however, that you might not make money on the property itself (you’re using it to reduce your taxable income, so if you lose your income you might be in trouble).
Invest in your investment property
A few small repairs, a lick of paint and eliminating those unwieldy weeds will make the property more attractive to potential renters. Consider low-maintenance options like tiles instead of carpet, concreted areas instead of pavers (you need to continually weed to keep looking neat), and potted plants instead of gardens. Throw in a few additions such as wifi or a lockable shed and your property will be very much sought after.
Consider your target market
As for location, think about the market you want to target: business people, families, single blue-collar workers, cultures that love to live with a large family. All have pros and cons so you need to consider the potential renters in your preferred location.
Find the right property manager
The last bit of advice is to find a property manager you like and get along with. You’ll be dealing with them a lot, and if they aren’t approachable or willing to assist at a moment’s notice, look elsewhere.
Here at Aspect Estate Agents we pride ourselves on the friendliness of our staff; call us today and see for yourself how we can help you find your ideal investment property.