Should you decide to invest in property, your first question may be how to identify the best place to buy an investment property. The answer will depend on your investing goals.
For instance, do you want:
- A high-returning property to generate instant rental profits from day one?
- A holiday home you rent out on Airbnb, except for four weeks every Christmas when you holiday there yourself?
- A long-term growth asset you’ll eventually own outright, to supplement your income with the rent when you retire?
Once you work out the type of investment you want, you can take steps towards finding the right investment property for you.
There are a few things to consider when deciding where to buy, including:
What finance do you have access to?
Smart property investment doesn’t actually begin with real estate; it begins with finance. The first step is to calculate your borrowing power. A home lending specialist can also help you get conditional pre-approval, which gives you confidence to research properties within your price range. At CommBank, pre-approval lasts for six months.
Are you working with local real estate agents?
Experienced real estate agents know the local market. They can provide insights such as which parts of the suburb are most in demand, local demographics and which property types are most popular. This becomes even more important if you’re buying in a suburb outside of your own neighbourhood. Introduce yourself to local agents, and as you build relationships you may be exposed to off-market properties that aren’t yet even listed.
Who else do you have on your support team?
With a local home lending specialist, accountant and conveyancer on your side, you improve your chances of having a smooth property buying experience. They can support you on your journey and allow you to focus on securing the ideal type of property to suit your investing goals.
CommBank has partnered with Home-in, your personal home buying concierge to help simplify your property investment. Helping you at every step, from pre-approval to shortlisting properties, conveyancing and settling on your loan.
Which local amenities are important?
The local residents – and potential tenants – in your chosen investment location will have unique needs. If the area is popular with young families, they may be looking for homes with backyards, multiple bedrooms and childcare and schools nearby. If the local demographic is professional commuters, access to good public transport is likely to be important.
How well have you researched the suburb?
Suburbs that may be more likely to experience future price growth are those that have infrastructure projects in place or planned for the future; have limited new stock, to keep pressure on supply and demand; and an increasing population. It’s also important to understand the local rental market by reviewing data around rental yields and vacancy rates (below 3% is considered ideal).
CommBank’s complimentary Property and Suburb Reports can help you work all this out.
Do you understand all the costs involved?
When you invest in property, the costs involved can include government fees, stamp duty, pest inspections, insurance, legal fees, home loans costs and more. Fortunately, many of these expenses are tax deductible for property investors.