Property investment is one of the most popular forms of long-term investments in Australia.
It involves purchasing with the intention of earning a return on investment. This might be achieved through rental income or through capital gain when you resell the property in the future.
Either way, it can feel overwhelming when deciding upon a house to buy and invest in. For a successful investment, be prepared to do the research, seek advice, and take risks. But it can be very worthwhile in the long run!
Key investment property advice
Michael Yardney from PropertyUpdate.com.au has developed a great 5-stranded strategic approach to ensure his properties outperform the market averages.
He suggests finding a property that:
- Has wide appeal to owner occupiers – Consider your options. Would your ideal tenants seek a townhouse, apartment, or stand-alone property?
- Is below its intrinsic value – Don’t pay a premium for new or off the plan properties.
- Is located in an area with strong capital growth – Find out if the area has a long history or positive projections for future growth due to the demographics in the area. For example, are residents likely to have disposable income or is there a new school or train line being built?
- Has ‘a twist’ – Does the house have something unique or special about it?
- Can ‘manufacture capital growth’ through refurbishment renovations or redevelopment – Will the property attract increased revenue with a facelift?
The costs involved in investment property
Before travelling down the property investment path, ensure you understand all the costs involved in the ownership.
As highlighted by Money Smart, when you own and rent out an investment property, you’ll be responsible for ongoing costs, such as:
- Council and water rates
- Body corporate fees
- Land tax
- Property management fees (if you use an agent)
- Repairs and maintenance costs
If you borrowed funds to invest, you’ll also have mortgage repayments. With positive gearing, you may pay tax on your rental income.
Find a good property manager
Mortgage Port recommends finding a property manager to keep everything in order for both you and your future tenants. They can help you get the best possible value from your property, as well as provide advice on property law, and the rights and responsibilities for everyone involved.
A property manager can also help you to find the right tenants and take care of any maintenance issues.
Where can I find my ideal investment property?
At Listing Loop, there’s a wide range of ‘just listed’ investment housing waiting to be discovered by you! Start searching for them today.