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Investment Property Tips for Beginners
Property investment is a terrific investment strategy, especially for your retirement. Not only is the rate of return higher than inflation rates but in most cases property investments double every seven years, making them the ideal investment vehicle for long term gains. If you are just starting your journey in property investment, keep these tips in mind to succeed.
Calculate Your Affordability
One of the first things you need to do once you have decided to invest in property is calculate what you can afford. When obtaining a loan estimate, check your ability to make interest and principal payments even as you spend on maintenance. Don’t forget to budget for a ‘cushion’ in case the property stands vacant for a couple of months and no rental income is available.
Understand Current Market Conditions
While property investments normally appreciate, if there is a shortage of housing or if the population of the city is expected to grow significantly, you can expect rapid price appreciation on your property investment.
Locate Areas with Infrastructure
When you are looking for investment property, look for locations with conveniences and infrastructure that will be attractive to prospective tenants. People will pay better rents for houses and apartments in locations with quality infrastructure such as schools, parks, shops, and train stations within walking distance.
Choose Locations Close to the Central Business District
While most cities in Australia and elsewhere experience cycles of growth and slowdown, there is usually a constant demand for housing close to the central business district. If you can afford it, make your property investment in an area close near the city centre.
Choose Mid-Range Properties
While high end properties may look impressive and seem like a sure way to make money, a property investor should opt for the mid-range properties. There is always greater demand for these, whether you want to sell the property or rent it out.
Diversify Your Locations
When it comes to property investment in Australia, no city is always in demand. In order to ensure that you are not caught with all your assets losing steam at the same time, diversify your locations across the major cities of Australia. Then if one market dips, the demand in another market will make up the difference on your balance sheet.
When you keep these points and tips in mind, even a beginning property investor will be better able to earn impressive returns on their investments.