3 Criteria for a Great Investment Property

The success of your investment depends partly on how well you choose a property. Your investment property needs to deliver on both capital growth and rental returns. Of course you can’t predict the future, but there are a few criteria that a property should have before you take the plunge.

The Property

Look for a property that is in high demand with both tenants and homebuyers, and is likely to remain that way in the future.

Take the demographic of the suburb into consideration before you buy. If mostly young families live in the area, a one-bedroom apartment with no yard will probably not be in high demand. Similarly, if the area has an older population, properties that have lots of stairs or a steep driveway will not be as desirable as those that don’t.

The Location

Location, location, location! The opportunity for higher returns from your investment property is greater if you buy in a desirable location. Here are a few things to consider when deciding on a location for your investment property:

• Is it close to amenities? Amenities such as schools, hospitals, shops and public transport are all worth considering. Families will always need to live near schools, working couples will usually want to live near public transport and older people will want to be near shops and hospitals.
• Is the location dependent on one industry? If yes, then the value of your property will most likely mirror the success of that industry. Although this is great if the industry is booming, it is a risk, as is the case in some mining areas at present.
• Is the suburb close to a major shopping area or city? Being 10km or less away from a major hub or city will always be desirable.

The Return Potential

If you are considering purchasing a particular property, crunch the numbers first. You don’t want to end up with a property that has limited capital growth potential or a rental return that doesn’t cover your expenses – ie: negatively geared. Positive gearing is a better choice.

Do your research, and base your decision on the numbers, not on your emotions toward the property.

If you have found a property that meets these criteria, give us a call on 02 9068 6644 and we will do all the work to help you secure the right investment loan. Or send us a quick email– we’ll get right back to you.