Before you get into the rental property market, here are 5 important things to consider before you start the investment process.
#1 Build a solid plan
Having a plan gives you a clear path as to where you see the future of your investment. You need to establish if you are investing for the long-term, medium-term or short-term and whether it’ll be used for personal or business purposes. You need to know exactly what it is you want to get out of the property, this will help you choose the property location and the type of property.
#2 Know your boundaries
Before securing your investment you need to know exactly what type of property you want to get in to. For example, you may be attracted by high rental returns you could achieve by renting out a property to students, however, this may not be attractive because you don’t want the wear and tear that comes with that. On the other hand, you may prefer a lower-return investment and attract a tenant you might keep on for years with less admin. Choose if you want to rent out to a family or let your property out to holiday makers.
#3 Make it about the people
Your target market is key as it will establish what demographic you will be advertising your property to. Will you rent to corporates, young professionals, families or students? Usually this will be dictated by the boundaries you set, your budget, the location, and type of property you are interested in. It is helpful to do some background research on the area and its property growth. Once a chosen target market has been established, you will need to do a check on your monthly overheads and see if it is viable to continue with this investment.
#4 Establish your location
Depending who your client market is, it would be beneficial to research the local schools for children, local parks and libraries. If you are marketing towards young professionals or students, research on the local hangouts, restaurants, taxi services and the convenience to your location will help you secure rentals.
#5 Be organised & open to options
Lastly, how much money do you have? You may need to look at over 100 properties to find one that ticks the right boxes for your investment. Good rental investments are swiftly snapped up by experienced investors who have been in the game for a while. In order to compete with them, a cash offer is always best as the estate agent is more likely to settle the deal quicker. As this is not available to most first-time investors, you need to work harder to ensure you have your bond finance already in place so when one comes up, you are ready to put in the offer.
Now that you know the 5 key essentials when buying a property for an investment, you should be able to draw up a plan with a little more peace of mind. If you still have a question or two, contact or email us and we’ll help you with the management of your property and property interests to make the process a little easier.