Nine-point strategy to find your ideal investment property

Finding a great investment property requires due diligence, strategy, and a strong understanding of your financial situation.

You need to be on top of the expected outgoings, potential earnings, tax obligations as well as the tax benefits that may be applied through negative gearing and write-offs.

Focus on the anticipated financial benefits from an investment property: are you seeking an outright profit from day one, or is the purchase strategic to minimise tax or develop a long-term wealth portfolio. As the age old saying goes “It’s not about timing the market it’s about time in the market”

We always suggest to our investor clients that they should seek professional financial advice to avoid unforeseen costs. And to ensure they have the right strategy in place to achieve their goals.

Picking the right property in which to invest requires an equal amount of attention. And if you’re looking at an investment property right now, you’re likely ahead of the curve.

While property prices are strong, city rental markets are recovering following the Covid-related exodus of students and casual workers who make up a significant portion of renters.

To help you in your search, here are nine critical considerations in deciding on an investment property.

1. Vacancies

Always look at the number of vacant rental properties in your target area. You don’t want to invest where there’s an oversupply or somewhere that doesn’t attract good quality renters.

2. Rental income

Compare the rents being asked for similar properties. Can you make your numbers work at the going rate?

3. Future developments

Are there any significant developments about to come on to the market. A release of several hundred apartments places pressure on rental incomes and can result in a short to medium-term fall in values.

4. Employment

Areas with readily available work are excellent locations. Find out about local employment opportunities in your target areas. If there is a strong hospitality and casual workforce, which is usually evident in tourism centres and university towns, this is great news.

5. Entertainment

Finding a location close to cafes, restaurants and movie theatres is gold if you want an apartment with young professionals as tenants.

6. Neighbourhood

The locality will influence the type of renter. Any location near a university or major hospital will attract students and lecturers, and doctors, nurses, and others employed in hospitals.

7. Schools

A rental property near a school is a winner, especially if you’re thinking of investing in a house. Families who rent are usually longer-term tenants. If education requires a long bus trip, you’ll struggle for a tenancy.  

8. Crime

Seek advice from local police or check the internet for local crime statistics. Vandalism and petty crime can drag down the value of your investment and diminish rental returns.

9. Council rates

Do due diligence on your favoured locations. You might be surprised at the difference in rates from one council area to another.

This information is general only and does not constitute professional advice. You should always seek professional advice concerning your particular circumstances before acting.

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On the lookout for the best investment property? Us too! We work with hundreds of investors who turn to us for our advice and to help them find the most suitable investment property to build or add to their portfolio. Each of our investor’s needs are different from the next, and we customise investment property opportunities to meet their specific needs. If you want to grow wealth through property, whether you are just starting out or have a substantial property portfolio, we can help.

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Should I buy or sell first?

You might be surprised to learn that if you understand the process, one approach outweighs the other in terms of flexibility, time, and peace of mind if you meet the criteria.

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