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3 tips for buying an investment property for first time​ investors

For many Australians, buying an investment property is still considered to be a smart choice to not only increase wealth but also to secure their financial future. But what do you need to consider? 

Here are 3 important tips to consider for when buying an investment property

Find the right property at the right price

It may seem obvious but finding a property that is likely going to increase in value means that buying at the right price is crucial for a positive financial return. 

It’s vital that you do your research. Find out what other properties are selling for in the area you’re looking at, and this will give you a guide as to what a property is worth, and you’ll be able to snap up a bargain when you find it. 

Importantly, consider the demographics of renters you want to attract; for example, if you’re planning on renting the property out to families, look for features such as a big backyard and proximity to schools and parks.

Conduct a property inspection

Again, this may seem obvious, but not doing your homework and understanding the age and condition of the property could lead to significant costs early in your ownership. For instance, having to replace the hot water service within the first few months will make a significant dent in your profit. 

Engage a professional pest & building inspector prior to purchase of the property, and if any issues are identified, always use a qualified tradesperson who is licensed to carry out the work to rectify any problems. 

So long as there are no major issues, buying a property that’s not in the best condition can be a good thing as it will provide you with the opportunity to make improvements; which is good for both rental income and will increase the value of the property.

Ensure the property is attractive to renters

You’ll find that you’ll attract better quality tenants by ensuring that the kitchen and bathrooms are in good condition and that the interior decoration is in neutral tones. It’s always important to remember that this isn’t your home; it’s an investment, so don’t get too involved with decorating.

Attractiveness to renters can also be confirmed via data. Some renters don’t aspire to be renters forever, suburbs with a high owner occupied % show that the area is one that many want to call ‘home’. The rental competition may also heighten from reduced available stock for renters. Another important data point to be considered is vacancy rate.

If the day comes when you want to sell the property, a home that is appealing to both investors and owner occupiers will increase your market and will maximise your selling price. 

Seeking professional advice from experts in the property investing field at InvestorKit will enable you to find and secure a positive cashflow property; with the added upside for capital growth.