What to Look For in an Investment Property

An investment property can be a shrewd way to build wealth.

Rent can help to pay off the mortgage, and there are potential capital gains to be had when the property is sold.

But it is a very different scenario to buying a home to live in.  Typically, the emotions are strongly involved when choosing a home.

Rather than following the heart, the decision to invest in property should be ruled by the head.

The starting point is your budget – and this will determine whether you can afford a house or a unit.

Financial Considerations

There are three major factors to consider:

  1. Capital growth 

You want your investment property to increase in value, so it’s wise to do some groundwork.  Thankfully, these days it’s easy to do this online.

It makes sense to investigate the suburb you are interested in:

  • What is the median sale price?
  • Have prices risen over the past few years?
  • What is the median rental income?

Also, look into past sales figures.

  1. Rental demand

Strong rental demand equals a stable income stream, so you want to buy in an area that is popular with renters. Look into the demographics of an area as well.

  1. Rental Yield

Rental yield measures the ongoing return on investment for a property.  It’s the income generated from a property expressed as a percentage of the property’s value.

The higher the rental yield, the better the return on the investment. For more information about calculating rental yield, click here.

Property Considerations

  • Location 

Location is the one thing you can’t change about a property, so it’s really important to choose a location with care.

Think about things like:

  • What is the general feel of the area or suburb? It is attractive and safe?
  • Are there good schools, shops, and restaurants close by?
  • What about public transport links?

Check with the local council about planned developments in the area, and research if there are any infrastructure projects happening nearby.

If so, these will drive prices up, meaning higher rental income and more capital growth.

  • Type of property

Units or townhouses near the inner city will always be in demand; however, if your budget doesn’t stretch that far, look at areas close to universities and popular amenities.

For houses, those located in family-friendly suburbs near schools and parks will be highly sought after.

  • Condition of the property

New and renovated properties need less maintenance than older ones, meaning lower repair costs and hassles.

All properties should have a professional building and pest inspection before purchase.

  • Property Features

Properties with plenty of storage and natural light will always be in demand.  If the property has extras like a garage or second bathroom, even better.  These increase both the appeal and the rent.

Becoming a property investor can be a proven way of achieving wealth, as long as you make your decision with your head rather than your heart.



Janet Camilleri
Janet Camillerihttps://frontpageseo.com.au
After stints as a primary school teacher, check out chick, and debt collection officer, Janet Camilleri began freelance writing for magazines when her children were small. Since then, her work has appeared in hundreds of magazines, anthologies and websites, including the Huffington Post and Flying Solo. A multi-award winning business woman, in her “spare” time Janet enjoys blogging for fun at https://janettispaghetti.com


Error decoding the Instagram API json




#280 – Luis Gonzalles Equipping Leaders to Have Needed Conversations

The Today's Leader returns with our insightful interviews Luis Gonzáles is a communications consultant, coach, and trainer, with more than 25 years’ experience in helping improve business outcomes for organizations. He has successfully driven...

Self Improvement: 5 Tactics To Enhance Your Life Today!

There is no tomorrow you know, it exists only as a concept of the future that we hold in our minds today. Therefore the...

#155 #conquer2020 What is Required of Me to Get Motivated Again?

#conquer2020 What is your personal responsibility in this and what role does Hope and Fear play in our recreation of our own personal motivation and drive. https://www.facebook.com/groups/coachcurlacademy/ Join our free Academy group on Facebook....

#34 Our Own Heaven and Hell: Greatness or Destruction, It’s in Your Hands!

CoachCurl explores the concept of Heaven and Hell within us all. Our habits, our behaviours, our demons and our vices all contribute to our version of heaven and hell. My experience has confirmed with me that people always struggle to be clear about...

Mind And Body: A Match Made In Heaven Or A Damaging Relationship?

Not too long ago, we spoke about the weird and wonderful ways our body parts connect. Who knew, for instance, that a case of...