So, you’re thinking about investing in property. Why not? Becoming a property investor means building up a strong financial base that can fund your future holidays, retirement, your own home, or even more investment properties. The possibilities are near endless.
But what should you look for in an investment property? And is there such a thing as the perfect investment property?
Choosing an investment property is not an impulse decision. If you put in enough research and hard work, then you will be rewarded with a highly valuable asset that will help support your lifestyle. Here’s what to look out for when you’re in the market for an investment property.
It’s the biggest cliché in real estate, but the saying “location, location, location” has been overused for a reason. It’s because you will experience very different results depending on the market you invest in.
You want to invest in a local market that is projected to see a lot of growth in the mid-to-long-term. A market that is already peaking will be expensive to buy in, and you may have to wait a long time before it becomes profitable for you. And a market that is stagnant may provide an affordable price point, but there’s no guarantee you’ll ever see a great return on investment.
Generally, buying property closer to city centres or in areas with booming population growth are a great choice for investors looking to reap the most rewards in the future.
Investing in a property means investing in every part of it. If you buy a house, townhouse, or apartment that is rundown, littered with issues, or fails to provide comfortable living conditions for any particular reason, then it is your responsibility to fix it up.
Many investors prefer to buy newer properties that are less likely to be affected by these issues. That doesn’t mean you should entirely avoid older properties. While they may need some work done to them, any renovations or touch-ups can make them far more attractive – helping to increase their rent and resale value.
One of the big questions to ask yourself when becoming an investor is: what type of property do I want to invest in?
Houses are going to appeal more to larger families, and while they may cost more to buy and maintain, you will typically charge higher rental fees and enjoy stronger capital growth. On the other hand, townhouses and units will attract individuals, couples, and smaller families. While they are cheaper to buy and maintain, they are also more affordable for tenants, and so you can’t expect to make as much rental income from them.
There are pros and cons to each type of property, so your investment decision should be informed by your budget, the current market trends, and your end goals.
Make sure you keep these considerations in the front of your mind to ensure you choose an investment property that will bring you continual value over a long period of time.
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