9 April 2015
7 Tips for Property Investors
CEO Michael McDonald
I regularly get asked but perspective property investors, ‘what should I look for when I’m looking to buy an property, to help get the most for it when I sell it in the future?’.
The truth is that there is not a “one size fits all” answer to this question, as everyone’s circumstances and situations are going to be different but over the almost 20 years I’ve been in real estate, here are my top 7 responses, that often come up.
- First look at properties that “owner occupiers” would want to buy. Australia has a idea of the great Australian dream of home ownership, therefore around 70% of properties are lived in by owner occupiers. So if owner occupiers create the lion’s share of demand, go with that as it is this demand equals price growth.
- Real estate is a long term investment, so your aim should be to hold for the long term and use the generous tax incentives such as depreciation to help pay for the property
- Focus first on the areas capital growth first and then the potential yield second
- Avoid what are known in the industry as “cookie-cutter properties”, especially those on on busy roads in inferior locations. Go for properties which offer not only a good layout but also have loads of natural light.
- Inspect a few properties before you buy, aim for around 10 in an area. The main reason for this is that even if the first one looks good, you will get to know the area and the homes in it, so you will recognise a good buy
- When looking for some of your first investments, I would recommend buying properties in an area that you can drive past. Not necessarily in your own suburb but one close by as you will feel more comfortable being able to “keep an eye on your investment”.
- Also remember that tenants are looking for features, so choose properties that are close to amenities, i.e. walking distance to schools, shops and transport that offer many features, such as heating cooling. Built in robes, entertaining areas, etc.
As a bonus, one of the biggest things areas I often here is that you shouldn’t buy an investment with emotion, it is a business decision. This is well and good, as you should make sure the numbers add up before proceeding, but I suggest you also look for a home that excites you, look for those great features in a property that is in a great location. It will be these ones that will deliver the results you want.
If you would like more information, remember your local Raine & Horne Agent will be able to assist you through the buying processes and answer your questions.