Finding the right location for your investment property to suit your budget is important to avoid having to hemorrhage money from your own pocket. There are a number of things that need to be taken into consideration when choosing a neighbourhood or suburb. The most crucial is that the location chosen is purely for investment purposes. It’s not because you envisage having a seachange in your twilight years or a house you can use for holidays when it’s vacant. It also determines the type of tenants you get and the amount of rent you’ll be able to charge.
Use a buyer’s agent
If you are going to purchase an investment property in a region—interstate or a neighbourhood you’re not familiar with—we highly recommend touching base with a buyer’s agent. They will have first-hand knowledge of the local amenities, the type of tenants you’ll attract and an idea of how much rent you can charge. For example; if you buy in an area close to a university, you’re likely to be dealing with a high population of students. Most students are on a budget, therefore won’t be able to afford higher rental payments. Beach neighbourhoods will attract great rental prices, but your property may require more maintenance due to the salty coastal air or periods where your property is vacant, particularly if you purchase in a location where employment is limited. Talk to National Wealth Advisory, we can connect you with trusted real estate agents that will be able to help you locate an investment property.
See it from a tenant’s perspective
You might love being remote and on farmland but what will tenants prefer? Choose a location that is in a good school catchment area. A good rental property will be within walking distance of public transport, close to amenities such as a medical centre, chemist and supermarket. For example; tenants living on the Gold Coast may prefer more garage space and room to store a boat or a jetski, whereas tenants in Brisbane may prefer to be closer to the train or bus station.
Do your research on the location
Make sure you’re aware of civil infrastructure plans for the area you’re thinking of purchasing in. For example, the state government may have plans to build a motorway that goes straight past your investment property or requires the government to make an offer so they can use the land. Don’t forget to check out whether the area is a flood zone or what bylaws there are. Some fancier neighbourhoods forbid on-roof TV aerials and that free-to-air TV must be streamed through the internet. Check with local councils to research plans for future infrastructure.
Before you go ahead and sign on the dotted line of a contract, investigate the type of vacancy rates there are in the area. If you purchase in an area with a high population of students, you may find yourself with no rent over the Christmas holiday or between semesters, when students often return home to visit family. A high vacancy rate will impact the future sales price.
Look into the average prices in the location you want to buy in compared to how much rent is being charged in the area. No rental comes without its risks and it makes it worth your while you do need to consider the prices. Perhaps a newly built property will stack up against an older property that needs some maintenance.
Talk to National Wealth Advisory
It pays to have an investment strategy. Whether it’s a one-off investment property or you want to diversify your portfolio. We can connect you with mortgage brokers, and financial advisors and help you get a strategy to secure the best property investment location for your budget.