4 Tips for Finding Investment Property Opportunities

by Chris Lang on December 17, 2014

Investment Property Tips

Investing in property for the first time is a big step, and one that needs to be thoroughly researched. However, there are a few initial considerations to mull over in order to set you on the right track.

1. Think about your target tenants

Consider what kind of tenant you would like. Are you looking to rent to a family who will require a sizable home, a couple who would like a swanky flat in the city, or perhaps you’re thinking of student accommodation.
The tenant type will influence many decisions, including furnishings, pricing and location.

2. Research rental areas

Try to get your hands on as much information as possible when researching investment properties. Real estate agents will typically know areas good for investment, along with newspaper listings and websites. Check if there are more homes available in your chosen areas than you would expect, this could indicate a slump in the market, or too many rental properties per the tenant population.

Check out population growth rates, as strong growth indicates that more houses may soon be required to meet demand. Some publications list rental price fluctuations and other key data sets that can help make the decision making a little easier.

3. Take a walk and check out the real estate

Research isn’t only limited to sitting at a computer, it’s wise to take a stroll around different suburbs and get an idea about who lives there. Amenities such as schools, transport links, shopping, and open spaces usually attract a higher rental value, so keep an eye out for these. Pop in to local real estate agents and chat about rental market in that area.

4. Estimate ongoing rental costs

Generally it’s expected that ongoing costs like maintenance will be higher with an older property. Factoring this in to estimated rental income is wise before purchase to estimate net revenue.

Rentals for apartments commonly include utilities such as gas, but not electricity. Knowing what’s expected in terms of utilities is also wise before purchase. An older property may have older inefficient systems in place, whereas new dwellings should be fitted with energy saving features.

Energy costs can be calculated relatively easily with estimating tools, such as the energy calculator from EnergyAustralia. This is also be used to appeal to future tenants who would like to estimate the running costs of your property.

Ultimately, research is the key to finding the investment property that suits your portfolio and your wallet.

 

Charlotte Dyer

With a commitment to providing useful information for first time investors in the property market, writer Charlotte Dyer partners with Australian companies to help readers take the first step towards their property goals.

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