Property Investment is an obsession in this country – we simply can’t get enough of it. And while property can be a fantastic way to secure your financial future, we need to make sure we’re not rushing into buying a dud.
I’ve heard horror stories of friends of friends walking around with tens of thousands of dollars cash in their back pockets, just in case they see a piece of real estate they like the look of. Their excuse? “You never know when you’ll need to make an offer”. While this may seem extreme to most of us, it highlights the extreme appetite we’ve developed as a nation for collecting investment properties.
So that you can make calculated, measured decisions on which investment property is right for you, I’ve thought of a few things you should keep in mind.
1. Right place at the right price
Real estate is one of the rare investment options which lets you do some market research and find value for money beyond the obvious. Whereas shares provide the transparent value of a company, property lets you look ahead to see which areas have the most potential for growth so your return on investment is as high as possible. With patience and the right market knowledge, you can find a real bargain, and don’t be afraid to get a number of property appraisals done if you’re still not 100% convinced. And if it’s your first time investing and you think you could do with an extra bit of advice, the best way to kick start your strategy is by speaking to an expert.
2. Would you live there?
If your potential tenant is your customer, and if the customer is always right, you need to consider what your customer needs will be based on where your property is located. If you’re thinking of buying close to nearby Universities with public transport links, you should be thinking of a property with multiple bedrooms and potentially without car-parking. If your target property is close to schools and shopping centres, it is likely to house a family of tenants – in this case, you would look for multiple bathrooms, a backyard if possible, and a decent kitchen. This forward thinking will give you the best possible chance to attract tenants for the long term and maintain your rental income.
3. Make it easy for yourself
You may be tempted to take on all aspects of responsibility when it comes to your investment property so that you can ensure things are done right. However, if you’re smart, or if you intend on having multiple properties to manage, you’ll employ the services of a good property manager, and you’ll let them do their job. Be sure to do your research and get the right manager for your area and property type.
4. Get the right finance
A crucial error of a lot of investors is to simply go with what they know. They walk straight into the bank they’ve always known, and get lumped with a loan for their investment that is poorly suited to their needs. It’s worth shopping around and finding a lender who’ll actually listen to what you want from your investment.
5. Protect what's yours
Once you’ve made the plunge and bought the right property, don’t make the mistake of forgetting to insure it, or leaving yourself underinsured. The best of intentions mean nothing when the unexpected occurs, so it’s best to be thorough now and avoid heartache down the track. Getting cover for things such as loss of rental income and malicious damage by tenants is prudent, as is choosing an insurer with the size and reputation to be there for you when it matters most.
With these key points in mind, there’s no reason why you shouldn’t be able to make the right choice when it comes to investing in property.
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