Thinking about an investment property? Our top six tips could help you avoid disaster.

Our senior investment consultant Clayton, offers his top tips for finding the right investment property.

  1. Research the area and get advice from experts. Always make sure you do your research – whether that’s your own or chatting to those in the know. There are plenty of resources online and in print that provide a good snapshot of recent trends and statistics, growth potential for property values and rents, comparisons with similar locations, and an appeal to different demographics.
  2. Don’t wait too long for the right property. Time is of the essence in real estate, and while it is important to be prudent before committing, waiting too long can mean missing out on an ideal opportunity. Too many people have a fixed idea of what they’re looking for, and can spend years unsuccessfully searching for a property that ticks every box. Instead, draw up two lists: one of ‘essential criteria’ and one of ‘desirable criteria’. If you find a property that meets all the essentials, but only a few of the desirables, then it may still be the one to jump onto. Remember, it’s your investment property, not your residence.
  3. Don’t get too attached to a property. The above point leads neatly to this one – the property is not your home, it’s your tenants’. When looking at a prospective property, your first consideration must be its investment potential, not whether you’d want to live in it. You may fall in love with a home that’s outside your budget or time plans, but as you won’t be living there, you need to be able to let it go if the investment conditions aren’t right.
  4. Get a pre-approval to see your property affordability. Knowing your budget beforehand gives you the freedom and confidence to put in an offer swiftly. While pre-approved loans are not a guarantee that a lender will approve an actual application on a home loan, they do give you a really good foundation upon which to work out your budget. Not only can pre-approval help avoid wasting time looking at homes above your capacity, but can also open up more opportunities if you discover your pre-approval is higher then what you were expecting. The WhiteStar finance team can help you apply for pre-approval from one of over 20 trusted lenders.
  5. Talk to an accountant. There’s a lot to consider when purchasing any real estate, but buying an investment property can open up even more traps and opportunities. When considering investing, it’s always smart to have a chat with an accountant first – preferably one with property experience or access to real estate experts. You’ll want to discuss budgeting, mortgage structuring and how best to optimise the tax components of an investment property.
  6. Understand different types of properties and their benefits. Each type of investment property carries its own benefits and disadvantages – and even these can depend on where the property is located (see Tip No.1) – so a smart move is to discuss the pros and cons of each with a property specialist. Also, don’t limit your options to the standard inner-city apartment or suburban house. Off-the-plan builds, home and land packages, townhouses and knock-down-and-rebuild can also come into the picture, as well as non-traditional locations such as regional cities and outlying growth centres.

To help set you out on a path towards more informed property investment decisions, give our experts a call. We can take you through each and every step of the journey, from affordability and pre-approval through to post-settlement support, building, renting out, and even maximising your tax return as a landlord.