You’re keen to splash your cash on an investment property. But how do you choose which area to buy in? one which will appeal to plenty of people and ensure strong rental yields?
Investment purchases are a considerable leap away from an owner-occupier one. Both types of buyers obviously want a great cash flow but the latter is also concerned with their personal needs and demands. But with an investment property, you’ll be hunting for a place offering a strong rent yield and an increase in value over time plus a high rental demand with a great appeal to plenty of people.
Location, location, location!
With this in mind, ensure your potential investment suburb is exceptionally attractive. While sometimes more expensive, inner-city suburbs or those close to the CBD can be a smart choice for cautious or first-time investors as these areas are close to public transport and employment – and always will be.
Remember, you want to find a property that will increase in value over time and boasts nearby essentials that won’t disappear, regardless of how and when the property market ebbs and flows.
As well, rental yields are directly related to distance from the CBD – the closer you are to the city, the higher your yield. On this note, close proximity to amenities such shops, cafes and parks will ensure your investment stands out from the crowd. Don’t forget schools either. Not all renters are singles or couples. There are plenty of families keen to rent and if your property is close to quality schools in a popular catchment zone, these people will line up for your place.
Bustling but secure
Along with nearby amenities comes the importance of a flourishing population. Aim to buy in a busy area with a good record of population growth and you’ll soon find your property value is developing nicely too. If your preferred suburb is struggling a little in this sense, research its current and upcoming infrastructure projects and similar. If there is a plan to add a large foundation or structure – particularly a transport feature – this could not only attract more residents but also strengthen your bank account. While you’re researching this point, check out the area’s crime rate. Homes in crime-prone suburbs may be cheaper but you could be waiting longer for a tenant. Then there’s the fact that a lower crime rate will increase your rental yields. The same goes for noisy industrial and commercial regions.
Think like a tenant
You want your investment property to be as popular as possible so head to a space that’s attractive in every sense of the word. Think about your property find as if you’re a renter yourself. Would you rent a cheaper home in a noisy area, miles from anywhere, and in a place known for its unsafe position? Or would you rent a house possibly a little more expensive but nicely maintained, close to amenities and in a quiet, clean, well-lit and leafy street?
No property investor or property itself is the same. Before buying, ponder points such as your personal goals and your investment timeline. Also remember that property markets in different cities and regions always perform differently and often, completely separately.
Content originally appeared on The Real Estate Voice
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