Things to consider when purchasing an investment property.
Whether you are purchasing your first investment property or adding to your investment property portfolio, it is important to consider factors that will maximise your rental return and minimise your risk. Each rental provider has a different financial position to be considered and we highly recommend you seek guidance from your accountant or financial advisor prior to purchasing any property.
Some of the main areas to consider may be:
- Location and demographics
- Will the property attract good quality and low-risk renters?
- Are local amenities such as schools, shops and transport easily accessible?
- Is the area driven by particular market factors such as universities, schools, accessibility to shops, public transport, business districts, ethnic communities etc?
- Will the property provide potential capital growth?
- Are there tax depreciation benefits?
- Are there stamp duty benefits?
- What are the vacancy rates in the area?
- Are properties generally vacant for extended periods of time in that area?
- Does the property have land?
- What are the associated costs, ie. owners corporation fees, insurance costs, land tax, council rates, amenities (if they are not separately metered)?
- Will maintenance costs be significant in established homes?
- Are there warranty periods, building guarantees associated to the property?
- Is there sufficient car parking facilities?
- Is the living area to bedroom ratio balanced?
- Will the property meet the minimum standard requirements in the tenancy legislation?
If you would like more information on how you can maximise your rental return, contact your local office to find out more.
Best of luck with your house hunting!
