Choosing an investment property should be done by considering many factors. Read this article to understand how to make a smart investment property choice.

Deciding to enter the investment property market is no small decision. Usually, property is the largest asset you will own, so it’s wise to take time and be sure of your investment choice. Making a smart investment property choice requires a lot of research and planning, so read on to learn how to choose a smart investment property to start, or add to your investment portfolio.

Get Familiar with the Figures 

There are many financial factors you need to consider when buying an investment property. Of course, the purchase price of the property is one thing, but you mustn’t forget the other costs involved, of which, some can be ongoing. These include stamp duty, legal and strata fees, potential renovations or any general maintenance costs.

It’s important to understand your financial position and be realistic in your investment property choices. The aim of building an investment portfolio is to generate wealth, so, ensuring you purchase an investment property that is within your financial means is a vital first step. Start by speaking with an advisor or broker to get a better understanding of your financial position and to learn what your options are. Don’t expect to get an instant return on your investment property; this is a long-term venture which you’ll need to be patient with in order to see the long term benefits.

If you’re able to, a good way to reduce renovation costs is to swap your dollars for elbow grease and do what you can yourself. Doing things like giving your investment property a new coat of paint yourself will ensure the property stays fresh and modern for years to come. Of course, if you don’t know your spanner from your circular saw, it’s probably best to get the professionals in. 

Location Location Location 

This is an old adage in the real estate world. Location is one of the most important factors people consider when choosing where to live, so be sure to research growth areas that people will be attracted to, and invest there or as close to there as you can. Research where development is happening or planned to happen. Look for school catchment areas which are a big drawcard for parents, or access to public transport. A key to making smart investment choices is to make the property appealing to as many potential tenants as possible, so think about what makes your life more convenient, as that’s what your potential tenants will be looking for.
 

Use your head, not your heart

Whether you buy a property for investment or as your primary residence, it’s always important to leave your emotions out of it. This is easier said than done, but it pays to be practical when purchasing a property. Especially for an investment property, think about what will be the least maintenance and best return. Things such as a swimming pool, for example, will most likely require more maintenance costs and upkeep than a property without a pool, or even without a large backyard. Retaining walls and decking are also things which should be avoided, if possible, as they tend to be higher-maintenance. 

Smart management 

There isn’t much point in putting time and effort into purchasing a smart investment property if that’s where your attention to detail stops. Great property management will be the pinnacle of your investment property experience and it’s important to spend time choosing who will manage your investment property for you. At Heimat, we pride ourselves on providing a property management service that our landlords and our tenants can depend on. Let us help you discover what property management should be like and get in contact with us today!