27 Nov What Property is Right For Me?
Choosing where to invest your money is an important decision. You might be buying a first home, or a house to rent out as an investment property – everyone has different needs.
Affordability, accessibility to public transport, or how close it is to schools can have a big impact on the quality of the value of a potential investment property. If you’re looking for your dream home, the connection can be more personal.
Knowing how to make a smart investment decision can seem overwhelming, so it’s important to know some basics.
What is your personal situation?
Identifying the things that are important to you is a good place to start. Ask yourself what you need the property to achieve for you – then see if the property ticks all the important boxes. Knowing whether you need an investment that is cash-flow positive, or can sustain one that might build some long-term capital gain, is a good basis to your decision-making.
If your plan is to renovate for capital gain, then that off-the-plan housing estate property is not the right buy. And before you think about buying in a regional location – look at the industries the region is sustained by and consider how secure those industries are. There’s no guarantees in anything but if your personal finances can’t withstand a downturn, that location may not be best for you.
How much you can actually afford to borrow is another important factor – talk to a trusted mortgage broker for an honest assessment of your financial situation.
Be Realistic – and Do Your Research
What you can actually afford may not match with what is really available. Unless – you look interstate or, at least, out of your favourite suburb.
The internet is a great way to explore important information about any Australian suburb, town and city – with statistics on everything from rental yield, proportion of houses versus apartments, projected income growth and other lifestyle information, all relatively accessible.
It’s also a good idea to look at information from local government or state government, when it comes to plans for population growth and infrastructure in that specific area.
Pound the Pavement
Talking to local community members, business owners and school principals is also a helpful way to understand the issues and prices in that specific location.
By understanding how quickly properties can be developed in the neighbourhood is important because the quality of demand and supply can really make a difference to your investment value. If there is endless developable land in the area, it may not deliver the financial returns you need.
Do you have a favourite suburb? Examine everything you can about that neighbourhood. Comparing top-selling property prices with those in the lower end of the price range is an important thing to do – by figuring out where your preferred property sits, you’ll have a good idea of how much it might grow in the future.
A trusted mortgage broker is always a good source of accurate info about price trends and suburb demographics. Don’t be afraid to ask questions – investing in property is a big decision.