Investing in property has proved to be a successful way to build wealth for many Australians. But you can’t just invest in any old property. Finding the right one makes all the difference.
There are particular attributes that all good properties have. Here are a few things to consider when searching for your next investment property.
Location is a key factor when looking for an investment property. It’s best to look for property that’s close to important infrastructures such as transport, schools, medical, and recreational facilities. Living in close proximity to amenities is a priority for many people so you’ll enjoy favourable rental outcomes as well as property growth due to being in a sought-after area.
Potential urban development
Urban development can be the reason why a suburb that has been dormant for many years starts to experience growth in property values. Look for areas that show signs of future development and growth or where councils or developers plan to add new facilities. It’s also a good idea to consider suburbs that are in the process of being rezoned. A typically commercial and industrial suburb may be the next big thing for residential development. You can check for neighbourhood plans and development applications on the local council’s website.
Seek loan pre-approval before starting your search so you have an idea of your buying limit. This will help to narrow your search and you can target particular suburbs and types of property that meet your budget.
Units vs houses
There is varied opinion about whether buying a house, or a unit is more beneficial for investment purposes. But the answer can be found by researching the area in which you’re buying and understanding the needs of the population that live there. Units and townhouses tend to have a higher rental return but lower capital growth than houses. You have greater flexibility to upgrade and develop house properties, but you will spend more for the initial purchase.
New vs old
There are pros and cons for each property type when it comes to choosing an old or new home in your search. In general, newer properties are more expensive but you should receive a higher rental return, lower repair and maintenance costs, and higher depreciation allowances than older properties. Your decision to buy an old or new property may be taken out of your hands when you’ve decided on suburbs to target as there may be only one option.
No matter where you are in your property search, getting the correct loan structure in place is important to ensure you’re making the most of your investment. Speak to us about your investment loan options so you can start your property investing journey sooner. Call Yotta, our Director, Lending Products, on +61 2 9278 9700 or send us an email.