Finding a great investment property requires due diligence and discipline around the organisation of your finances.
You need to be on top of mortgage and tax obligations, as well as potential income and tax benefits from negative gearing and write-offs.
Focus on the anticipated financial benefits from an investment property: are you seeking an outright profit from day one, or is the purchase strategic to minimise tax or develop a long-term wealth portfolio.
As an experienced agent in the Pilbara region, I always suggest to my investor clients that they seek professional financial advice to avoid unforeseen costs.
Picking the right property in which to invest requires an equal amount of attention. And if you're looking at an investment property right now, you're likely ahead of the curve.
To help you in your search, here are nine critical considerations in deciding on an investment property.
- Vacancies – Always look at the number of vacant rental properties in your target area. You don't want to invest where there's an oversupply or somewhere that doesn't attract good quality renters.
- Rental income – Compare the rents being asked for similar properties. Can you make your numbers work at the going rate?
- Future developments – Are there any significant developments about to come on to the market. A release of several hundred apartments places pressure on rental incomes and can result in a short to medium-term fall in values.
- Employment – Areas with readily available work are excellent locations. Find out about local employment opportunities and any particular projects that may be on the horizon.
- Entertainment – Finding a location close to amenities is key.
- Neighbourhood – The locality will influence the type of renter.
- Crime – Seek advice from local police or check the internet for local crime statistics. Vandalism and petty crime can drag down the value of your investment and diminish rental returns.
- Council rates – Do due diligence on your favoured locations. You might be surprised at the difference from one council area to another.