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March 23, 2023

Buying An Investment Property In Australia To Build Wealth

Why is property such a great investment?

Firstly, there will always be demand for rental property. The proportion of the population that are renting is steadily increasing. One of the main reasons for this is that Australia has a strong economy with good infrastructure and this attracts migrants and students from all over the world. This increases the population and demand for housing across Australia.

Also property prices are increasing at a rate which is making it unaffordable for many Australians to ever buy property and they are destined to be renters for their whole lives.

In this blog we’ll examine some of the factors you need to consider when buying an investment property.

Choosing the right property type

Every type of property has its own pros and cons but demographics is critical across the board.

For example if you are considering investing in an area with a large student population you should look for properties which need less maintenance (such as apartments) and which are close to educational institutions.

If you are considering an area that has young families, look for houses with a good backyard and which is within walking distance of schools and amenities like day care centres.

Select a property to attract good tenants

To ensure that your tenants stay for a long time and to attract premium rents your property needs to include features that cater to your targeted demographic. Some factors to consider:

  • Do tenants require a car park space or are they happy to park off the street?
  • Is having a study an important feature in the house?
  • Is the property near to shops and public transport?
  • Will a swimming pool be attractive to tenants?

The more features that your property has which tenants are looking for larger and better quality your pool of prospective tenants will be. This will ensure that your property is unlikely to be vacant and that your existing tenant is likely to stay for a long time.

Using property data

Do not overpay for your investment property is the cardinal rule. Do you research to find the right price to pay for a property.

Consider factors such as:

  • Vacancy rates – Extended vacancy periods will result in a significant loss of income.
  • Amount of properties sold vs amount of listed properties – if an area has many properties listed for sale with little sales it can indicate that the area is in low demand.
  • Number of days on the market – how long has a listed property been in the market? If it has been listed for a while, there is likely an oversupply of rental properties in the suburb. This will lower your chances of getting a good income.

Purchase a property with low maintenance needs

All properties require maintenance. To prevent high maintenance costs it is best to purchase a property that has low maintenance needs.

Typically, brand new houses and apartments are those requiring lower maintenance. Especially in the first 10 years or so as it is less likely that these properties will have structural issues or items that require replacement. Older properties are more likely to have structural issues (e.g. asbestos) that could leave you with a hefty repair bill.

Purchasing a property with lower maintenance needs will undoubtedly get you better returns on your investment.

Get a good property manager

It is critical that your property is properly managed. It’s important that tenants pay their rent on time and that any required repairs are attended to as soon as possible.

Your property manager will carry out routine inspections and identify any issues before they become problematic which can cost you even more to fix.

Get Professional advice

Speak to us today if you would like to buy an investment property or need help to manage your property investment portfolio.

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