Buying an investment property can be a smart and lucrative decision. Choose the right property and you’ll be putting extra income into your pocket for your retirement, but choose the wrong one and it can be a costly mistake.
We understand finding the information you need when starting the buying process can be time-consuming and confusing. That’s where we come in.
In this blog, we explore 6 tips that you should keep in mind, that will save you time and show you what to look for, so you can confidently buy the right property for you.
Thinking about getting into the investment property game? If becoming a landlord is on your radar, then check out our must-read guide, “My House. Your Castle."
Do your numbers and don’t get emotionally attached.
Buying an investment property is about getting maximum return, so the numbers need to add up to ensure the property you buy will steadily and reliably produce income and capital growth.
Evaluate the property’s potential
Is there opportunity to add value through renovation? Is the property in a high value area? Doing your research so you know what kind of property is in demand, or going to be in demand is crucial.
Check the age and condition of the property.
It’s important you know of any significant work or repairs that need urgent attention and factor this into your costs. For example, If you need to replace the roof or hot water cylinder in the first few months of ownership, this could make a big difference to your profits and damage your cash flow.
Understand what tenants want.
What sort of properties are most attractive to tenants? Empathise with your potential tenants, and consider whether it’s somewhere you would want to live.
Location, location, location.
Considering your location will help you identify who you’ll be attracting, and how to best appeal to them. Who are your likely sources of tenants in the area — families looking for good school zones? Retirees who want walking distance to shops and public transport? Professional couples who want to be close to the CBD?
Keep up-to-date with regulations.
Make sure you understand the current tenancy laws and health and safety regulations relating to rental properties. It’s vital to understand what your responsibilities will be under the Residential Tenancies Act 1986 before you head down the road of property management. For more information on this, check out our blog on recent tenancy law changes!
Thinking about getting into the investment property game? If becoming a landlord is on your radar, then check out our must-read guide, “My House. Your Castle".