Everyone’s heard that “location, location, location” is the most important thing to consider when buying a home.
But what about an investment property? If you love living near the water, does it make sense to purchase a second property in an expensive seaside suburb? Or are there other factors that you should consider?
Property investing is not the same as buying a home to live in. It’s a business strategy designed to provide you with an income as your capacity – or enthusiasm – for work decreases.
It can be a complex area to explore, so here are some top tips for finding your perfect investment property.
- Locations and types of property
We’ve touched on the issue of location, and it’s important to remember that the best investment strategy may be to buy in a suburb that you would never consider living in yourself.
For example, if the state government has just invested millions in a new hospital in an outer suburb, it might be too far away from your work for you to live there, but the interns, nurses, administration and auxiliary staff working at the new hospital will all be looking for somewhere to rent. It means a steady stream of tenants for investment properties.
The type of tenant should also influence your type of property. It helps to imagine an ideal tenant and their needs. A four-bedroom house may be far too large for a young nurse on a starting salary, but a one-bedroom or even a studio apartment could be ideal.
- Plan for diversity
A rule for property investment is that you need to diversify in terms of location and property types. If you have several properties over a variety of locations, you can take advantage of potentially much better investing opportunities available in other cities.
Don’t narrow your vision: if you live in Melbourne, why not purchase an investment property in Brisbane, or vice versa? There could be great opportunities in other states, but you won’t know until you get in touch with an Ironfish property strategist who has an overview of the national market.
- Buying ‘off the plan’?
There are advantages to buying off the plan. With Ironfish-approved quality projects, your Ironfish property strategist has already checked the reputation and credibility of the developer to make sure they have delivered as promised on previous projects, and that all the necessary licenses and insurance policies are in place.
- Can you handle DIY?
TV shows make it look as if everyone is buying and flipping investment property with ease. The truth is, the ‘contestants’ are backed by a professional team of builders and developers – and they’ve taken time off work!
Real-life DIY involves time, expertise and willpower you may not possess. Think carefully before you enter into a situation where you buy a cheap, rundown property with dreams of tripling its value with a few tweaks.
Perhaps the biggest tip for property investing is getting the right guidance on market dynamics and having a team of professionals to support you. With the right investment guidance, you soon become empowered to make better decisions for yourself and your family.