Investing in property can be both hard and daunting, especially if you are looking at becoming a first home owner. Like everyone else before we make these life changing decisions we turn to those closest to us for advice, and dare we say it sometimes their advice can be a little bit askew. So before you take the plunge have a read of a few of our pointers to help guide you in the right direction.
Queensland has started to see some upward changes in the property market of the last 6 months and this is due to:
Increase in jobs
Cost of living contained
Increase in interstate migration outweighs home loan approvals causing rentals and prices to grow
TIP 1: Buy in a popular, central location
When purchasing always look at investing in prime, central neighbourhoods. If you have to, always chance the property and not the location, because where the property is located is the key to your success. Definitely avoid locations that are dependant on a single industry as it can be fairly risky; if the industry fails, everything related topples as well
TIP 2: Active or passive investment?
First consider how much time, effort and money you want to invest in on an ongoing basis when looking to buy. When you buy property it is not an asset you can just forget about: to a certain degree you will always need to be involved with the management of you property, even if you choose to appoint a property manager. Yes the maintenance and upkeep of an apartment with an on-sight manager is going to call for less involvement then a large house that is going to demand ongoing upkeep. Always consider this when you begin planning your property investment.
TIP 3: Strong rental market
Ideally when looking to invest you want to buy in a suburb where the level of rental listings and vacancies are low, and the demand for rental homes is high. Generally if the vacancy rate is high (above 3-3.5%) it is considered to be weak which may affect your ability to rent. Always look for suburbs that have at least 30% of local residents renting to ensure a steady stream of renting potential.
TIP 4: Look for the ability to add value
Dozens of strategies can be used for investment properties to add value and ensure you get ahead. Through simple or elaborate renovations, many investors manufacture price growth by helping to improve the property's intrinsic value and assist in rental return. A few simple cosmetic changes to a house can increase the value, whilst property bought on large land has the opportunity for future development.
This post by no means gives you all the answers to a successful investment but it can assist in planning and ensuring you are making the right decisions. Investing in property in Australia is essentially a business decision and should always be treated with care and well thought out plan and strategy.