When purchasing an investment property, there are a number of factors that could increase or reduce your potential return on investment. The amount of research can be quite daunting. BlueKite Capital take the property research off your hands as part of our services to you, meaning you can focus on other priorities.
When considering a property for investment purposes, a number of important constraints need addressing such as the location of the property, is it going to be immediately lettable to tenants, are there any immediate costs or upgrades required? These considerations lead to the most important question to ask - will it be attractive to tenants?
How do you know what will appeal to someone you've never met? Settling on a handful of locations is a good start. Young families and couples are the ones that drive capital growth and so a location that is within a reasonable distance to schools, entertainment, transport, and an employment hub is one to look out for. Other ideal factors are a low vacancy rates and relatively high rental yields.
To get the most value, you need to think about the demographic of renters who are likely to be living in the area. If you purchase a good quality, decent sized, one-bedroom apartment in the inner city, it could be a great investment, however if you purchase in a predominately suburban area, it may not garner as much interest.
When investing in any kind of property, be wary of any danger signs. One common mistake investors make is not fully understanding the cashflow after a purchase. A poor understanding of your net cash flow position is worse than paying too much for the property. It is vital to know how much your chosen property is going to cost after tax every week after you settle. There’s no point in buying a top-quality property if it’s going to send you broke.
Speak to the team of finance and property experts at BlueKite Capital today. Call us on 1300 883 594 or email info@bluekitecapital.com.au