Property Investment: Simple Tips to Get Started
Property investment has long been considered a reliable long-term investment for people in Melbourne and across Australia. For some, purchasing and managing investment properties is their core investment strategy, whilst for others it forms part of a broader investment portfolio. Before you can take the plunge, here are simple tips to guide you.
Property Investment: Features to Look For & Factors to Consider
Are you ready to buy your first investment property? The following will help you on your journey to investing.
3 Features to Look For
- Type of Property. Do you want the ease and convenience of managing your own property? Then apartments or units may be your best option as they are easier to maintain than a typical house. However, their capital growth often underperforms compared with stand alone houses. Be sure to also consider the body corporate and maintenance fees, as well as repair costs.
- Attractive and Appealing to Renters. Look for a property that will entice as many people as possible. This is a long-term investment so make sure you find one that will attract not just one, but a wide rental market such as young families, couples, singles, students and even retirees
- Facilities. Facilities and amenities such as a gym, pool and playground might seem attractive. But take note of your budget and consider your expenses. In addition, assess nearby amenities such as shops, restaurants, parks and public transport.
5 Factors to Consider
- Rental Yield. Consider locations where rental income is high in comparison to property values.
- Understand Area Developments. Zoning changes and city developments can affect the value of a property in the future. So, do your research and learn about planned changes in the area that might have an impact on property prices.
- Familiar Location. You won't have to spend much time researching if you purchase a property in a familiar location. Choose an area that you're already acquainted with, know the property values and monitor the properties available on the market.
- High Growth. Research and look for areas where there is high potential in capital gains and where growth is present.
- Vacancy Rates. Inquire about the vacancy rates in your desired location. A high vacancy rate is an indication of low demand, which may make it difficult to attract renters and sell the property in the future.
These are just some of the factors you need to consider. Buying property can be confusing and takes a lot of diligent research and analysis. An experienced buyer’s agent helps remove the confusion and provides you with a clear direction, with guidance every step of the way.
Once your investment property has been purchased, you can either have a real estate agent manage the property or you can manage it yourself. Managing your own property helps avoid management costs, however you will have to take care of the following: advertising and showing the property to potential tenants, checking the infrastructure, making sure everything is well-maintained and collecting rental fees.
As for insurance, consider obtaining building insurance and landlord insurance to aid you in case a tenant doesn't pay or leaves without notice. Furthermore, ensure you have adequate income protection insurance, especially if you are relying on your monthly salary to cover your overall expenses.
If would like to find out more about property investment in Melbourne, contact the team at Property Mavens. We’ll provide support and guidance for your buying decisions and help you find your desired property. Whether you're just getting started or familiar with the buying process, we are here to provide you with professionalism, expertise and confidentiality.