Buying an investment property can be a great path to wealth creation - but first you need to buy the right investment property. Here are some simple tips to help you acquire a property that will achieve investment-grade returns:
Buy in a suburb that won’t have a lot of new properties built in the future. If you're buying house or townhouse, find areas that have no more land to release. If you're buying a unit, find out the number of new units being constructed or have been approved in the area. If there's no future competition to your investment in the area, then your investment is more likely to rent well and go up in value.
Check out the suburb's Demand to Supply Ratio. Visit http://www.dsrdata.com.au to see if demand is stronger than supply. A stronger DSR score means you're likely to get more short-term growth.
Buy a property that lots of different types of people can live in. The more types of people can live in your property, the more competition there will be from buyers and renters to live there. This is great for your rental yield and capital growth. Think about properties with flexible designs, more than one bathroom, some outdoor area and close to shops and services.
Avoid buying new. New properties are attractive to buyers - but only when they are new, and you'll pay a premium when buying one. Much like driving a new car out of the showroom, a new property loses value once it is lived in. If you still want the benefits of a new property - depreciation, modern design and low maintenance, then buy a property that's 2-5 years old, which will be better value.
Build an independent team around you. A property purchase is one of the biggest decisions you may ever make. A good financial planner, mortgage broker, buyer’s agent, accountant and solicitor/conveyancer can provide you quality and independent advice on all matters involving your investment. You're already spending hundreds of thousands of dollars on a purchase, so be a professional investor and pay a little extra to ensure your interests are looked after properly.
At Aquila Property Investment, we specialize in helping Australians to buy high-quality Australian property assets. Instantly book a cost and obligation-free consultation with our Principal, Andrew Wegener, if you’d like to discuss your property investment plans further.