How to Spot a Good Rental Property
This is a guest post from Lauren Robinson, Director of Rental Results property managers.
What makes a good investment property? Well, it’s plain and simple. A good investment property is one that can yield not only a greater return of capital growth, but also of rental returns. Now, in order to maximise your investment return, there are a few key considerations you must make.
It is important to ensure that all of the contributing factors are right. This is due to the fact that the rental property market runs in cycles. The property values and desirability may either rise or decline in certain phases of the cycle, therefore, it is best that as a property investor, you are constantly aware of the market trends to ensure that your investment is taken care of.
How can you tell if a property would make a good investment? Here are a few things to consider:
Right Property
Apart from the desirable features of a property, it is crucial that you consider its continuous value to tenants and future home buyers. Is the property appropriate for the average age of residents in the area?
Do some extensive research about the area surrounding the property and find out about its demographics and what is relevant to it. Let us take an example. If you are buying a property in an area with a high population of elderlies, you would not want to buy a house that has staircases.
Right Location
Perhaps, the first thing you need to consider when finding an investment property is its location. When the property is set on a good location, there is a greater chance of gaining higher returns from your investment.
How can you tell if the property is on a desirable location? Here are the factors you need to consider:
- Close proximity to amenities such as schools, public transportation, public facilities (libraries, parks, post office, etc.), supermarkets and shops, restaurants, cafes, beaches, etc.
- Avoid areas that are likely to be dependent on a certain industry as much as possible. Yes, it certainly can be beneficial when the industry is doing good but what about when it’s not? If this happens, the value of your property may decline considerably.
- Look for places where there is a rapid growth of population. One of the direct effects of population growth is the development of infrastructures, which in turn increases the area’s desirability.
- Look for properties in areas that are close to major cities, preferably, areas that are also rapidly growing because these are usually the most sought after.
Right Return
When choosing a property to buy for investment, whatever you do, never decide based on emotion. Imagine what happens when a property turns out to be a bad purchase? It may result in capital growth below the rental income which would most likely fall short of the monthly costs to maintain the property. Therefore, it is crucial to conduct an extensive research prior to purchasing a property.
Right Management
What better way to ensure that your property is well taken care of and is certainly achieving its desired return than to employ the expertise of a professional. Choose someone who has extensive knowledge about property management, including the laws pertaining to rental properties. Doing so will guarantee you not only a good return on investment, but the luxury of a stress-free life as well.
Everything else will just run smoothly once you have these in order. Now, all you have to do is shell out the necessary amount to cover the costs involved. If you have found the perfect home to start your property investing journey but don’t have the capability to purchase the asset in cash, then you can apply for a home loan.
If you’d like to find out more information about purchasing an investment property or a review of your existing loans call us today on 07 3847 9450. For more information on property management or a free rental appraisal contact Lauren Robinson and the team at Rental Results on 07 3123 7373.