Purchasing property can be a popular investment option as it is seen to help put an individual in a positive financial position. However, not everyone can gain from their property investment, especially if a solid review was not done before purchasing the real estate.
If you are keen to buy your first investment property, a thorough investigation should be done to find the ideal real estate to meet your goals. To help you narrow down your options, we’ve listed a few key factors that make a good property investment.
Looking at historical records in the area you’re eyeing to purchase is a good place to start your research. However, also look at what’s happening in the area in the next few years. Is it poised for development? Will there be any infrastructure improvements in the area? Is there strong growth in population? Have the surrounding areas experienced capital growth? These are just some of the indicators you should be looking at if you want to achieve capital growth.
Getting good rental returns
If you decide to invest in a rental property, ensure that the average rent in the area will cover as much of the expenses of maintaining the property as possible. The rent you will charge should hopefully cover your mortgage, tax and the cost of maintaining the property. If not, your property to be negatively geared which may be your preference from a tax prospective.
It is not a bad idea to purchase a property that is not in perfect condition as you can make improvements and increase its value. However, be sure to consider the cost of maintaining the property as this can negatively affect your cash flow.
Access to public transport
Whether you choose to purchase a property within the city or the neighbouring suburbs, having access to public transport is something you should consider. The more options of transport available, the more chances the property in the area will become valuable and achieve solid rental returns.
Areas near activity hubs, such as schools, recreational facilities, shops or close to the CBD are potential locations for a high-performing investment property.
Possible council rezoning
If you are planning to invest and hold the property for medium or long-term, consider any potential future council zoning plans which could enable a subdivision.
Professional advice from a property expert, accountant and financial advisor will help you determine if investing in a property is the right decision based on your current financial situation and goals. Perth-based firm McKinley Plowman (MP+) offers a variety of services under their property division, which includes investment property portfolio reviews, investment property strategies, and investment property coaching. For more info or to get in touch with MP+ property expert, contact (08) 9301 2200 or click here.