Buying an investment property isn’t that different from buying your family home, however there are some additional considerations. Here is a checklist to help you purchase a good solid investment property.
Before you even hit the open houses, you will need to contact a financial institution to find out exactly how much you can borrow or afford to buy. You should take into consideration your income, the rental income and tax advantages with a built in buffer for the unexpected.
Once you’re pre-approved you can start looking for an investment property in your price range.
This is just as important for investment properties as it is for your family home. Look in suburbs with a good history of capital-growth.
Does the investment property have access to reliable public transport and good schools, close to amenities and lifestyle choices such as cafes and recreational facilities? Research any local plans too for new roads, transport and schools etc. This will ensure your investment yields great returns in the future. All these features make your investment property more desirable to renters.
Adding value to a property converts into capital gain. New kitchens, bathrooms and a tidy outdoor area could add thousands to the value of your property and provide you better short term rental return. Does it have the potential for knock down and rebuild, town houses or a subdivision?
Is the investment property low maintenance?
Look at the condition of the plumbing, electrical, building work and the state of appliances such as air conditioners, hot water, oven, swimming pool – anything that may require repair or maintenance in the short and long term. Your pre-purchase building inspection should highlight any areas of concern.
Although units are easier to maintain they do have body corporate fees which you need to factor into the purchase.
Your investment property should attract more than one type of renter such as families, singles, and downsizers – increasing your chances of renting the property and reducing the vacancy rate.
Buying an investment property takes time and research. At Qantas Credit Union we have lending specialists who can provide you with information on a range of loans, competitive interest rates, and money management tools to help with your investment property.
The information in this article is of a general nature and does not constitute as advice in relation to any investment of purchase. It has been produced without taking into consideration your personal financial circumstances, objectives or needs. Prior to making any investment or purchase you should conduct your own investigation and analysis of any benefits or costs associated with such. You should seek your own independent legal and financial advice. Normal lending criteria applies. Terms and conditions apply and are available on request. Qantas Staff Credit Union Limited trading as Qantas Credit Union ABN 53 087 650 557, AFSL/Australian Credit Licence 238305.