Frank has prepared this “checklist” which lists some suitable questions you can ask yourself when you are trying to make an informed decision regarding investing in an investment property, together with a summary of explanations/information relating to the questions. You can start by asking yourself the following questions:
Question # 1
Is the investment property close to existing or planned infrastructure?
Tenants will be more readily attracted to your investment property. If they know that infrastructure is already in place or if the infrastructure is being planned.
What transport options are available to your tenants?
You will need to assess what transport options are available to your tenants such as:
– Train lines;
– Major arterial roads;
– Road networks;
– Freeway access;
– Footpaths; and
– Cycle paths.
How many rental properties are available in the area?
You should look at suburbs and locations where there is a high demand for rental properties. As this offers you with good opportunities and also decreases the likelihood of your investment property sitting vacant for any length of time.
What are the property prices of the area?
What are the benefits of buying a new or established investment property?
You should carefully weigh up the benefits of buying a “new” investment property versus an “established” investment property (i.e. as new property can provide considerable tax benefits and advantages).
What is the demographic breakdown of the area?
You want your investment property to be located in a neighbourhood that is welcoming to your tenants and where you have an improved chance for resale. So, when considering a suburb or location you should research:
– The number of owner occupiers in the area;
– The number of investors in the area;
– If there is any evidence of public housing in the area; and
– The overall presentation of the suburb and the surrounding suburb.
How does your investment property compare to the market average of similar homes in the area?
It is always a good idea to compare your property to other similar homes in the area to make sure that your investment property is accurately priced.
Is your investment property in an area which will appeal to families?
Because, families are considered to be stable tenants you should look at suburbs or locations that attract and cater well for families.
How much land is available in the area?
You should consider looking at:
– Buying “land” in a new land estate where there is a healthy supply of land, as this is a good indicator of future growth; or
– Buying” land” in an established, sought-after suburb or location. This may prove to be a smart investment, as a decreasing supply of land can push up the value of your investment property.
Have you considered the potential capital growth and rental yield of your investment property?
When evaluating your investment property, make sure your property is strong in both the following areas:
– The potential for capital growth; and
– The potential for a high rental yield.
Finding, a suitable investment property that suits your needs is a major financial decision. So, don’t rush into anything too quickly. Always remember that while you are shopping around for a suitable investment property, do your research.
Seek Expert and Professional Advice
So, now that you have read this article you should have a basic understanding of the types of questions you should be asking yourself when you are looking at investing in an investment property. You should also consider seeking help from a professionally qualified finance broker or mortgage broker as they can save you lots of valuable time running around on your own trying to determine which investment property best meets your needs and circumstances.
http://www.singhfinance.com.au is a reputed Australian finance brokerage firm that employs a team of expert and professionally qualified finance brokers. They will help you with any further questions you may have regarding investing in an investment property and if you require finance they will obtain a pre-approved investment property loan for you, and they will even help you find suitable building and landlords insurance for your investment property. Call on 0424 190 908 today or visit their website and simply click on the “ENQUIRE ONLINE” form.
Disclaimer: This article is of a general nature only and does not constitute professional advice. I strongly recommend that you seek your own professional legal and accounting advice in relation to your particular circumstances.