Buying an investment property comes with no guarantees, however much of what you achieve is a direct result of the choices you make.
You will enjoy great success as a property investor if you have the right knowledge, and to acquire the right knowledge it helps to simply know what questions to ask.
For example, when determining the potential for growth in a particular marketplace, if you keep in mind the fact that rents drive a market, your questions will be on point, and you will get the answers you need to find a promising investment opportunity. Some good questions to ask include:
1. What is the rental return of the suburb as compared to the return on my investment property?
Your goal as a property investor is to exceed the rental return of the suburb average – that way you know you’re onto a good thing. Also, if there’s a market move you can adjust your rate accordingly.
2. What is the gearing – tax deductions or cash flow of the investment property?
This is really important, because as you go through the suburbs you’ll know affordability versus rental return – it’s a key driver when you’re looking to buy in a top post code.
3. What is your add value rental strategy?
Will the market support furnished rentals? Can you force value through minor renovations? Add a granny flat? There are a number of ways you can add value to an investment property.
4. What are the vacancy rates in the area?
Finding an area with a strong rental demand and low supply of rentals is a smart way to determine the profit potential of a property.
5. What is the availability of land?
Will there be an oversupply of new land, or is land tight? A lot of the suburbs that investors are looking at have a tight land supply. This is a great question to consider when you’re looking for a suburb to invest in.
6. What are the major projects happening in the area?
Look for an area where there is a lot of investment going on, where there’s investment into infrastructure and other big projects.
Take a look at what retailers are doing. Think of groups like Bunnings, Westfield, Coles or Myers. All of these companies have experts working for them who are making sure that the demographics in a certain area will support their stores, so if a Bunnings is moving to an area, it’s a pretty good sign there’s a threshold of people willing to spend. This is a good sign for an economy, so you need to take a look at where these companies are branching out to.
7. Look at commercial office space in the area.
Is it being expanded or is it contracting? Do they have a tenant or tenants? What do you think that does to business confidence in the area – to the property market? Obviously it works as a damper on the markets and does nothing to improve the confidence of businesses in the region.
Asking these seven key questions when looking at an area to invest in will help you to choose those properties and neighbourhoods which offer the promise of the best yields for your portfolio.
Remember – follow where the workforce goes and you can make some money because that workforce brings money to the area and that money is usually spent on housing.
If you want more tips about your Property Investment strategy, book a FREE consultation with one of our expert Investment Coaches to discuss your situation and investing goals.
by Sam Saggers | Mar 24, 2017
Different property types deliver different results. The property type you choose will depend upon a number of factors.: Your personal risk profile - how much risk you’re comfortable with Your financial capacity What stage of growth you’re in When you expect or need to...
by Sam Saggers | Mar 22, 2017
Property investing is a tried and true means of wealth building that delivers benefits to investors in terms of capital growth and tax reduction. While we have no real control over investment property gains we do have control over what we claim on our taxes....
by Sam Saggers | Mar 20, 2017
Budgeting, together with saving is the foundation of every successful wealth creation plan. If you don’t know where your money is going, and if you’re not diligently saving it, you’ll lack the resources to build a comfortable future for yourself and your loved ones. A...
by Sam Saggers | Mar 18, 2017
We don’t often think of homes as having a “reputation”, but they do. Consider, for example, the home at 6 Collins Street, North Ryde in New South Wales. The former home of Sef Gonzales and his father, Teddy, mother Mary and sister Clodine was the subject of litigation...
by Sam Saggers | Mar 16, 2017
There’s a large population of pets in Australia....approximately 25 million of them according to the ASPCA. Each of these pets are owned by people who need accommodation. While some of these pet owners own their own homes, many of them are renters in search of a home...
by Sam Saggers | Mar 14, 2017
Wealth studies consistently show that a very large majority of families lose their wealth quickly...by the second and third generations. Why, do you think, that is? A number of reasons. In most cases, children were not prepared to handle a large sum of money and...
by Sam Saggers | Mar 10, 2017
Have you ever noticed how some people are able to get great discounts on their investment property while others pay the asking price? What’s their secret? There’s really no secret - they’ve just learned how to negotiate well. Of course the market will dictate how much...
by Sam Saggers | Mar 7, 2017
Does it take luck to become wealthy? Some people say so, but I say that a smarter choice than waiting on luck to visit your doorstep is to make your own luck...at least you have more control over that. So how can you make your own luck? By doing what countless others...
by Sam Saggers | Mar 3, 2017
You’ve found the right marketplace. All of the market signals indicate that this suburb is on the cusp of growth. So you decide you’re going to finally take the plunge and buy a property for investment. While it’s great that you’ve finally decided to buy an investment...
by Sam Saggers | Mar 1, 2017
Buying an investment property comes with no guarantees, however much of what you achieve is a direct result of the choices you make. You will enjoy great success as a property investor if you have the right knowledge, and to acquire the right knowledge it helps to...
The post 7 Key Questions To Ask When Choosing an Investment Property appeared first on Positive Real Estate.