7 Tips to Find the Right Investment Property
Investing in real estate can be a profitable choice, especially in a dynamic market like Perth.
To find a promising investment in Perth, you need to have a strategic approach regardless if you're an experienced investor or a first-time buyer.
The following tips will guide you through the process of identifying the right property.
- Understand the Market Dynamics:
Before making any decisions on real estate in Perth, it's crucial to have a comprehensive understanding of the market. Analyse recent trends, consider historical data, and stay up-to-date on economic factors that can influence property values. This knowledge will serve as the foundation for informed decision-making.
- Identify Growth Areas:
To find neighbourhoods with potential for increased property value, look for areas that are growing and developing. This can include regions with new infrastructure, job growth, or other factors that increase demand. Investing in these growth areas can lead to long-term gains. Typically, this will also need to be matched with limited supply - property prices tend to rise when demand outstripes supply.
- Rental Demand and Yield:
To find a profitable rental property, evaluate demand in different areas. Focus on high-demand suburbs that can provide a consistent income. Calculate the potential rental yield to gauge the financial viability of the investment.
- Property Condition and Potential:
It's important to inspect the property carefully to see if it's in good condition and has potential for the future. You should also consider how much it will cost to make any necessary repairs or upgrades, and whether those changes could increase the property's value. A property that's well-maintained and looks cosy is more likely to attract good tenants.
- Local Amenities and Infrastructure:
When choosing a property, it's important to keep in mind its proximity to essential amenities such as schools, public transport, shopping centres, and recreational spaces.
This can greatly increase the property's appeal. It's also important to check for any existing or planned infrastructure projects in the area as these can affect the value of the property over time.
6. Budget Wisely:
As a property investor, it's important to create a budget that includes all the costs associated with the purchase, such as legal fees, stamp duty, and potential renovation expenses. This will help ensure a sound investment. Keep your budget realistic and stick to it. You should also carefully consider the holding costs and if you can afford these.
7. Stay Informed About Legalities:
Keep up-to-date with local regulations and zoning laws. This will help ensure that you comply with legal requirements and have a successful investment journey. Stay informed about any upcoming changes to regulations and laws that may affect your investment. Remember, following legal requirements is crucial to ensure a smooth investment journey.
Common Mistake in Investing Residential Properties
According to Kitty Parker, a buyers agent who shared her expertise with Morningstar, a common mistake in investment property decisions is investors' personal biases.
Investors tend to choose properties based on their own preferences rather than evaluating them based on financial performance. Assessing potential investments with the question 'would I live in this?' can be misleading, especially when comparing different real estate markets.
Parker emphasises that an attractive residence may not necessarily translate into a strong investment. This tendency becomes even more apparent in interstate purchases, where the question arises, 'Do people actually seek out homes like that?'. To counteract this bias, Parker highlights the importance of viewing property investments strategically, focusing on financial metrics rather than personal preferences.
The ultimate goal is to maximise performance, regardless of whether the property aligns with one's living preferences.
Investing in the real estate market can be a highly profitable venture if you plan strategically and make careful decisions. To achieve success in the constantly changing property landscape of WA, it is important to have a clear understanding of market dynamics, identify areas with growth potential, assess the condition of properties, and stay informed about the latest trends and developments.
By following these steps, you can position yourself for success in the thriving real estate market of Perth.
Once you have found the right property to invest in, you can work with a property manager to help you find the right tenants and keep your property in good condition. Doing so will lessen your burden of manually screening tenants, handling maintenance, collecting rent and boosting ROI.
Elevate your property management experience—reach out to us today.
Source:
Jayamanne, S. (2023, December 04). How to successfully pick an investment property. How to successfully pick an investment property (morningstar.com.au)
