I want to buy an investment property
The benefits of buying an investment property include:
- Ownership of a secure asset
- The future sale and benefiting from capital gains
- Rental income to cover loan repayments and other associated expenses
- Building equity
- Taxation benefits
Four main factors to consider when you decide to purchase an investment property is property type, location, growth and demand.
You should consider the type of property you would like to purchase and which will meet budget and goals. The type of property that you decide on will determine the level of rental income you can receive and may change depending on the upfront and ongoing costs.
When choosing an investment property it's location, location, location! Will the property value increase over time? Will it provide you with adequate income? Some other factors to consider also include proximity to public transport, schools and childcare, shopping facilities, and parking. These are important to attract tenants.
You will have to consider how the potential investment property has performed over the previous decade and how it is likely to do in the future. It would be good to do some research of property prices in the suburb and surrounds. It would also be beneficial to consider the population growth, property prices and potential rental income of the area. Also consider new property and off-the-plan developments which may impact upon the future rental income.
In relation to growth, demand is vital for investors. You don’t want to purchase an investment property in an area or without the features that tenants are looking for. Features high in demand are internal laundries, balconies, parking spots & lock-up garages, built-in cupboards and good storage space. Also consider any renovations that may be necessary and could potentially add value to the property.
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