As an investor, it is quite a prerequisite to do your homework before investing in real estate in Australia. There are many things to consider when buying an investment property like the local market conditions and your own financial situation.In this blog we outline six important factors to take into account when investing in property. By evaluating these items, you can make sure that the investment property is right for you and your goals.
Buying investment property in Australia
There are many reasons for buying an investment property in Australia. The country has a stable economy and a strong housing market, making it a safe investment. In addition, Australian property offers good rental yields, meaning that you can earn a healthy return on your investment. If you are having misgivings and questions about your endeavour to invest, best to work with a reputable Sunshine Coast mortgage broker for sound investment property advice and a stress-free investor loan application process.
What to look for in an investment property
It’s important to know what to look for in an investment property. By doing your research and being aware of the potential risks and rewards, you can make informed decisions that could lead to a lucrative return on investment.
That said, here are the six things to consider when buying an investment property:
1. Location
Are you going to buy a property in the city or in a rural area? City properties give you capital growth and are always in strong demand, whilst rural area properties give you positive cash flow and are typically cheaper. You can think about the following when considering a property’s location:
- What is its proximity to the CBD?
- How close is it to schools, local shops, tourist attractions, and public transport options?
- Is it a flood-prone area?
- What amenities are within its neighbourhood?
2. Condition, type, size, and price of the property
- Is the house old or new, and will it need substantial repairs or renovations? The condition of the property is obviously critical – you don’t want to buy a fixer-upper unless you’re prepared to make repairs.
- Is it a single-family home, an apartment complex, or commercial space?
- A larger investment property, while having a bigger rental potential, will likely require more time and money to maintain than a smaller one — are you ready to commit to this?
- An investment property that’s priced below market value may be a good deal, but be sure to do your research before making an offer.
3. Features of the property
It is important to determine early on into your investing who your ideal renter is as it will help you decide which features you would want in your investment property.
- Does the property have a good layout / is it configured correctly?
- What is the aesthetic appeal of your property?
- How functional, practical, and livable is your property?
- Does it have a second bathroom, a home office, a rooftop, an outdoor kitchen, or a lock-up garage?
4. Potential for a good return on invesment
- Is it in an area that is growing or is declining?
- What is the surrounding area like?
- How is the economy in the area faring?
- Are there new jobs in the area?
- Are people moving to the area?
- How safe is it, both inside and outside the property?
5. Capacity to meet lending criteria
Investors generally pay more for a home loan because they are perceived to be riskier than owner-occupier home buyers. Make sure you are a good borrower from a lender’s perspective as they will look into:
- your income
- asset and liability
- credit history
- your employment situation
- the state of your finances, both past and present
- the amount you need and your purpose
6. Terms and conditions
Before signing on the dotted line, read all the fine print and make sure you understand all its Ts & Cs of the contract. For any misgivings about the contract, a mortgage broker should be able to help you understand everything that you need to know.
Get help from the best mortgage broker Sunshine Coast when investing in property
For anyone keen on investing into property, it’s important to get the right mortgage broker on your side. At Sunshine Coast Financial, we have a wide range of lenders and products available, so we can find the best home loan for your needs.
We work with some of the biggest banks and lenders in the country, as well as a number of smaller regional and specialist lenders, so no matter what your circumstances we should be able to help. Contact us today for more investment property tips and further guidance on how to choose investment property, or to speak with one of our Sunshine Coast mortgage brokers – they would love to hear from you!