Finding the right house in the right location for the best price takes some doing. But if you are looking for a good investment property, hoping for greater capital growth and good rental returns in the future, then it makes your quest doubly important.
Like all stages in life, or investment, in order to maximise investment return, there are some key ideas to think about.
Is it the right stage to be buying?
The property market moves in cycles. Property values may rise due to strong market growth, remain steady, or even decline during certain phases of the cycle.
You owe it to yourself as an investor to know where the market is within the cycle to ensure you secure your property at the right price.
Invest in your knowledge of the subject.
Is the intended house in the right location?
The most basic strategy is to find the right location. If you choose well, the chance of gaining higher returns from your investment is far greater.
It’s an art and a science but here are some factors to help. Your investment should be close to desirable amenities like schools, public transport, public facilities such as post office, library, parks, and medical centres, shops and markets, and lifestyle activities like restaurants, café strips and the beach perhaps. Therefore, it is important to consider proximity to these when buying your investment property.
Some of the best places to buy a good investment property are those undergoing a population spurt. As population grows, infrastructure improves and the desirability of an area increases. Living close to the CBD of a major city (i.e. 10 kilometres) is always highly sought after. Whilst many of these suburbs attract higher prices, look for emerging suburbs which may have strong growth potential.
The right choice of property
The best way to ensure a constant demand for any product is to hold a ‘wanted item’ and that is true for housing.
Your aim should be to secure one which will always be in demand by tenants, as well as future home buyers. One factor you should consider is who will be renting in the area.
It’s no use having a two bedroom flat when your locals are all family folk with four kids apiece, or trying to rent double storey in an older community.
So it is vital to do even more research to discover the demographics of your area of choice and determine what is important to them.
Return for your effort
You’ve heard that saying, ‘buy with your head not your heart’, and it’s crucial in property investing.
Finances and logic should always be your guide.
A poor choice may result in capital growth below the market average or rental income which does not come close to covering the monthly costs to maintain the property.
As always your investment is only as good as you doing your homework, before making a purchase.
Research, research research
Over recent years a number of web sites have been established to enable consumers to access current sales results and historical sales data. This information will assist you to gain a good grasp of current market trends and historical growth patterns. Some of them include;
Realestate.com.au and Domain.com.au
You can now get access to tonnes of information relating to past sales, suburb profiles and localised market information. Remember when comparing property values to only compare similar properties that have actually been sold. By comparing prices of properties that haven’t sold you are comparing in-proven data.
Real Estate Institutes
There are real estate institutes across each state of Australia which act as the industry body in that specific state. The institutes amongst other things publish market commentary as well as median prices and other market data.
PropertyDATA.com.au contains data collected by the real estate institutes. The site will allow you to access the same comprehensive, accurate and up to date property sales information relied upon by estate agents, valuers and Australia’s major banks. The site provides free as well as paid property reports, median prices, capital growth figures and suburb profile information.
Residex provides consumers with the ability to purchase information on all areas of the real estate market, such as analysis of market movements, price estimation, historical growth data and more.
When looking to lease your property Peak Agency can help you find a trusted agent to help you manage your asset.