Investing in property is a great way to build wealth, but you have to make sure you buy suitable homes in the right locations. Whether you’ve got one investment property or you’re looking to add another to your portfolio, there are some key things you should consider. From location to the home itself, keep reading below to learn what you need to look out for when you buy an investment property.
See how much you can borrow
One of the first things you should do when buying an investment property is to see how much you can borrow. The first step is reviewing your budget and estimating what repayments you can afford. From there, it’s helpful to speak with your bank or a mortgage broker. Factors such as interest rates, your available deposit, and equity built up in other properties will all impact your borrowing capacity. And remember, just because a bank or broker says you can borrow a higher amount than you expected, it doesn’t mean you should.
Look for quality properties in blue-chip locations
While property prices are said to double every seven to ten years, it doesn’t necessarily mean that buying any property anywhere will yield that result. The rate and pace at which your property increases in value will depend on a range of factors, including supply and demand in the area, the quality of your property, its location, and any broader economic factors. This is why it’s important to choose good properties in areas with lots of amenities and demand for housing.
Finding the right home in a great area can take a lot of research. If you’re unsure where to start with research or don’t have the time, consider speaking with a buyer’s agent or an asset selection specialist who can deeply investigate the market and help you make a sound decision.
Set money aside for renovations, repairs and maintenance
Another key area you don’t want to skimp on as a property investor is renovations, repairs, and maintenance. Whether the property you buy is ten years old or 100 years old, work will need to be done to keep the place in top condition. When you inspect properties, take note of any repairs that may need to happen before your place is advertised for rent. Similarly, if other updates are required, such as fresh paint and new flooring that can modernise a place and help you charge more rent, this can be a good idea, too. It’s all about factoring in these jobs as early as possible so you can set a budget and get it done in a timely manner.
Buying an investment property, whether it’s your first one or tenth, is a process. From understanding your borrowing capacity to researching different properties and locations, there’s lots to consider. Throughout the process, make sure you seek advice from trusted advisors who can help you find the best property and lending products for your unique circumstances.
Remember, this article is general in nature and is not financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.