It should be an exciting time when you are looking to buy your first investment property or if you are shopping around to increase your investment portfolio. Not only are you moving forward with your own personal financial goals, but you are out in the market seeing what types of property are available.
There are many things to consider when buying property. Budget and aesthetics are the first to pop to mind. But, when buying an investment property, matters such as location, access to schools/public transport and future development rate more importantly than, say, what flooring the property has.
For an investment, the type of property (unit or house) may be more or less important than if buying a property as an owner occupier. This largely has to do with what your future tenant will be looking for.
Property managers are up to speed on not only how the market is performing, but where and what future tenants may be looking for.
Putting yourself in your potential tenants’ shoes may seem a long way off when you’re just starting out, but if you don’t do it now – before you purchase – you may find that the property doesn’t meet your needs as an investor down the track.
If you’re not sure, talk to your property manager about things to look out for.
So what to think about first? Do your research –
- Location: If you have a certain area in mind that you’d like to invest in, make sure you do your research about what type of property is sought-after and what rental yield you can expect. If you’re not set on a certain area, this can open up greater opportunity to focus on the facts and figures, to ensure you’re on to a winning investment.
- Price point: What are you anticipating spending initially to set your investment up? Will you be able to afford the mortgage repayments if there are no tenants? Sale of property aside, have you considered all the additional costs throughout the year – insurance, rates, maintenance etc?
- Off-plan or existing: There is a lot to consider when buying both a new and existing property. Again, this comes back to research and your intentions for your investment.
- Layouts: This is particularly important when considering what type of tenant you will be most be appealing to. For example, if your property is in a family-orientated area, close to schools, it is likely to appeal to families with young children. Does the type of property allow for several occupants? Is there enough storage?
- Growth and gentrification: How does your potential investment fit with planned changes to the area?
As a property manager, understanding not only where the property market is at but where it may be heading is a vital aspect of our job. To understand this, property managers always have their finger on the pulse with what tenants are looking for and where tenant expectations are trending, which is why it can be beneficial to engage the property manager in discussion early on in your pre-purchase research.