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If you're in the market for an investment property be really careful to not to let your emotions creep in.
In other words don't get all caught up in how good you would feel living there think about what sort of return you should be receiving for your hard earned money. Emotions have to come right out of the decision process when you are buying an investment property. Savvy property investors don't just buy an investment property around the corner and hope that it will make a good return they undertake a fair bit of research and consider the following factors :
1. Employment -What is the level of employment in the area you are considering - areas with high employment growth will always attract rental demand.
2. Infrastructure - is the area well serviced by transport, shops, cafes etc These facilities are favoured by renters. Also are there any major developments planned for the area that will attract more people and hence demand for rental accommodation.
3. Future growth - looking ahead 5 to 10 years is the property in an area where particular demographic groups (eg young Professionals) are moving into. Properties in that area that have sufficient security, access, proximity and low maintenance will be more demanded by renters.
4. Demand - Is there a demand for properties in the area you are considering. In other words has there already been significant shift in property prices in that area and if so how much and over what time period.
5. Age - How old is the property - Newer properties generally have greater demand, they are less costly to maintain and offer better rentals than older properties. This is not always the case if for example the new property is not in an area of future growth.
6. Price - What is the median price for property of the type you are looking at in the area you are considering? The aim is to purchase at or below the median price. In this way the property will be within reach of the majority of owner/occupiers.
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