Investment Property Tips

Are you considering a property purchase in the near future? Perhaps you’ve got your home on the market and are busy looking for a fresh opportunity to move further up the property ladder. In these circumstances, it’s all too easy to get carried away by the excitement of moving house and forget to consider those essential variables which can make all the difference to the profitability of your new investment. We’ve put together a list of top investment property tips, providing you with the essential pointers you need to come out on top when it comes to a wise real estate acquisition.

Purchase What you Can Afford

It sounds obvious, but a large number of Australians according to The Guardian end up trying to service an unmanageable debt, simply because they’ve over-extended their borrowing in order to purchase the property of their dreams. Recent analysis suggests that many Australians have ended up saddled with enormous mortgages in order to enter the property market. Keeping debt to a sustainable level, with a healthy margin to absorb unexpected expenditure or changes in income, is the key to making property ownership a sustainable option.

Check the financial implications

Part of ensuring you purchase an affordable property involves getting to grips with the various factors which may affect the value of your property and your monthly repayments in both the long and the short term. Variables such as depreciation, negative gearing and taxation can all make a real difference to the viability of your investment. Advance research is essential for sustainable success. A conversation with a skilled analyst will be able to give you a thorough insight not only into the current market conditions, but also some idea of what to expect in the next few months or years. This can be invaluable when trying to decide on an appropriate level of financial risk.

Don’t purchase a dud!

This may sound obvious, but if a property isn’t likely to appreciate in the future, it’s probably not worth purchasing. Pre-investment research is vital in order to work out which locations and types of property are most expected to yield a healthy return on investment and which are likely to remain value neutral or even depreciate as time goes on. Currently, many of Australia’s bigger cities, including Melbourne and Sydney, are experiencing a slump in apartment sales due to over supply. In these circumstances, the wise investor will look at a house or low rise in a good area as a more suitable investment.

Be aware of supply and demand

If a particular type of property is scarce, its value will rise. And if a glut of a particular property type is on the market, prices will fall. Investing without adequate awareness of the property supply and demand in your chosen location is a recipe for disaster! If you’re not sure how to get the critical information you need for wise decision making, using a property research firm like IPRG could make an important difference. For example, recent figures according to Domain suggest that while Melbourne town houses and down-size properties attracted plenty of buyer attention, apartments were far less likely to be in demand.

 

Never pay more than the market price

 

Never pay more than the market price

When you’re considering how to get into property investment, it can be difficult to work out whether the asking price for a property is a fair one or not. To gauge this accurately, geographically accurate information on market prices over recent years is essential. Prices can fluctuate dramatically within a relatively small area, so it’s important to use information that’s been collated by a property professional so that you’re comparing your potential purchase with similar properties.

It’s also worth considering the bigger picture – what characteristics of a location give it its appeal? Are these things permanent or transient? Some of the drivers of the dynamic property market in Melbourne, for example, include a rising, diverse population, excellent infrastructure and a strong local economy.

One of the key concepts which underpins all these tips for buying an investment property is the need to thoroughly research the market before committing to a purchase. From establishing an accurate market price to obtaining figures which give an in-depth analysis of the market in your chosen location, the right intelligence is critical to good decision making when it comes to real estate.

If you’re not sure how best to get the information you need, our experienced and knowledgeable team can help. At IPRG, we provide top grade, relevant market data that’s tailored to suit the needs of each client. The right information maximises the chances of making a sound, profitable property investment that will provide the return you’re looking for. To find out more contact us today.