We often talk about buying a home in Sydney as if you were going to be the one living in it, but more and more home purchases in Sydney are investment properties.
Buying this type of property isn’t entirely different, but there are a few things you need to consider from a different angle when you’re looking for an investment.
Investment property tips;
Do some research to see what kinds of properties are in demand in the areas you’re looking for. You need to buy something that people are looking to rent. If there are more families renting in the area – you want a family home, if it’s younger, single professionals, you probably want to look at apartments.
When you’re investing, you need to be able to consider all foreseeable expenses. A building and pest inspection will give you some insight into the conditions of the property and the likelihood of any repair work you may need to get done before you can rent it out and start making a return.
Consider whether you’re planning on negative gearing the property and how the price and rent will affect the capital growth.
It’s always easier to rent out a property that’s near public transport. Look at nearby train stations, bus lines and schedules, as well as what’s in walking distance to the property.
Buy the Median
You want to find something that’s close to the median price in the area for what you’re buying. If the median price is $1 million with a weekly rent of $1,000 and you’re looking at something that’s priced at $1.5 million, but the rent is less than $1,500 – you’re reducing the property’s yield.
Consider the Builder
If you’re looking at buying a new apartment, it’s worthwhile considering the developer and what else they’ve built in the area. See if you can talk to people who live in these buildings to see if their happy or have any problems.
Whether it’s universities, primary and high schools, or even just day-care centres – these are things that can affect a property’s rentability, as well as the potential for capital growth.
Location, Location, Location
As always, location is an important aspect of property values. You want to buy somewhere there are accessible shops and services nearby. The closer you can get to a central business district, the better, but failing this you can find properties with easy access to main transport routes, such as freeways and motorways into city centres.
See Through Cheap Strata Levies
Consider the costs of upkeep on the building and if the strata levies saw unusually cheap, they may not be offering the quality or facilities tenants expect. There may also be significant expenditures coming up that haven’t been budgeted for.
Don’t Invest Emotionally
Although you want to find an investment property with some appeal, as this will attract rental tenants, you also need to avoid becoming emotionally attached. This is an investment property after all – you’re in this for rental returns and capital growth, not a white picket fence and a doormat that says “home sweet home.”