If you’re about to take the plunge and invest in Australian real estate, there’s only one thing that’s standing in your way: selecting the right property.
It’s not as easy as you think!
Choosing a high performing investment property isn’t as straightforward as searching for your own home. You’re looking for features that will drive your capital growth and that your target tenant will benefit from.
But with so many properties on the market that cater to a whole range of different lifestyles, budgets and circumstances, where do you even start?
This blog post is our quick-start guide to picking high-performing investment grade properties, covering four essential criteria that should form part of every investor’s search.
1: Research always comes first!
Research is such a crucial step, yet it’s an area that many gung-ho investors tend to skip over.
Don’t make this mistake!
Failing to properly research an investment is like flipping through property listings and selecting a property blindfolded.
When it comes to research, there is a lot of information out there, but the best place to start is with reliable, trusted property data sources like CoreLogic or the Australian Bureau of Statistics.
Real estate portals like realestate.com.au, Domain and Homely also provide tons of free data for those on a budget.
These sources are incredibly helpful in identifying market trends and conditions that will help your investment to prosper.
When it comes to the type of research, there are a number of different things that you can look at.
The key things to focus on include:
- The types of property that are currently in demand with tenants and owner occupiers
- Under-supplied locations
- Suburbs with extremely low vacancy rates
- The historical performance of various areas to gauge whether a particular suburb has previously had stronger returns than others
It also pays to to have a decent understanding of the current economic landscape, including things like employment trends, demographics, and consumer confidence.
2: Choose a proven investment strategy
You won’t succeed in property investment if you fail to select a proven investment strategy.
You can make some money without a strategy. But imagine what you could achieve with a proven strategy that has helped others build real wealth through property?
At the end of the day, it’s not enough to have just a vague idea of what you want to achieve. The world’s savviest investors have a comprehensive plan in place that details how to reach their investment goals.
When developing your investment strategy, think about:
- The amount of money you have to invest
- The amount of savings you can commit to your property investment goals
- How much time you have on your hands to give your property the right amount of attention
- Your skills and knowledge of the industry
If you’re unsure about your investment strategy, don’t be afraid to reach out to the team at Adpen! We’re always providing guidance to investors just like you.
3: Lock in the location!
After you have done your research and have decided on a solid investment strategy, it’s time to start hunting for your investment property!
Since the location of your property will do most of the work, start by looking at suburbs where incomes are growing higher than the state average.
Choose somewhere with plenty of public transport, good schools, shopping centres, restaurants and cafes. Selecting a property in close proximity to these types of amenity will ensure that your property remains attractive to prospective tenants.
4: All about the property…
Once you’ve narrowed down the suburb, it’s now time to focus on the property.
At this point, you should be hitting the pavement and starting to inspect properties. Walking through properties yourself is the best way to ascertain whether they stack up as an investment or not.
Study properties for signs of water damage, plumbing problems or crack formations. Take into account things like room size, natural light and car parking.
These are all features that tenants will value highly.
At the end of it all…
The most important things to look for when you’re deciding to invest your money are strength and stability – and property has proven to be a strong, stable choice over the long-term.
Choosing the right property is crucial to your success, so take the time to get it right. Investing in property can be exciting, but don’t act hastily.
Invest the time and effort now, and you’ll reap the rewards for years to come.
