Property Investing Basics - What Makes a Good Investment
Have you been like a cat at a fish bowl, looking into the Australian property markets only to find yourself unable to make that final commitment? To help you, we have spoken to some of our Property Management experts who live and breathe property and asked them to share what they believe makes a good investment property.
What To Buy
Our Property Managers stress the importance of not only focusing on the quality of the property you purchase, but also the size. They have seen owners in the past caught out that way. They have gone and paid a price for a three-bedroom terrace, say in an area like Surry Hills, and it ends up becoming a two-bedroom rental because of the size of that third bedroom," they said.
If you are a first-time investor and cannot decide between purchasing a house or a unit, it is recommend you discuss your objectives with your local LJ Hooker real estate agent and their experienced Property Management team as they will have a good perspective as to the rental capability of the property.
"Buy into an apartment building that is fairly modern - nothing too old where there could be a special levy raised as suddenly the building needs repainting because it's 30 years old or the fire alarms need to be upgraded, for example," they said.
Where To Buy
Location is obviously the most important, and that can be narrowed down as much as a street, or even an aspect of the street that can make a significant difference to the potential growth of a property's performance," our agents said. They assert that if you are looking for an area to invest in, a good rule to stick by is to ensure that it is within a 10-kilometre radius of a major city hub - an even smaller distance for smaller cities like Adelaide or Perth.
"Also, it is sometimes a good idea to start your investment portfolio in an area that you live in, because you will know that market more than anyone else does," they said.
When To Buy
Our agents believe there is never a bad time to buy property, you just may have to look in different areas depending on what the market is doing. "The property market is only as abundant as the people pushing it. As soon as they step back, it is often an opportunity when you should jump in on investment property," they said.
A proper understanding of the market is crucial. Going to open homes and viewing auctions to paint a clear picture of the market. If they are all going crazy then that is an indicator that it is time to take a step back and wait for things to settle down.
Any Other Tips?
As some final pieces of advice, our agents said to not expect quick profits from property, be patient, take your family and friends' critique with a grain of salt and ensure that you "engage a skilled and qualified property manager that has a good reputation, because that could make or break the investment".