5 Things to Keep In Mind When Choosing an Investment Property
Choosing an investment property takes a lot of planning, and many people wait years to find the right place to invest in. Often an investment property is an older house in an established neighbourhood, as new neighbourhoods tend to be developed far away from the city, such as Digger’s Rest near Sunbury. Melbourne Yarrabend off the plan properties are a new addition to the inner-city suburbs, however these new areas are few and far between.
We have assembled 5 crucial criteria to keep in mind when deciding on the investment property that will be right for you.
When considering your potential investment properties, transport is an incredibly important factor to keep in mind. Is it close to train or tram lines? What kind of conditions are the surrounding road surfaces in? Are there bike paths in the area? An investment property too close or too far from public transport might not attract renters or buyers when selling in the future, potentially lowering the resale value of your premises. Damaged or unsafe road conditions in the area can put drivers and pedestrians at risk, and often make people less likely to visit suburbs to avoid damage to their tires and/or cars, and usually mean that residents will need to tolerate heavy traffic during any/all repairs in future. Bike paths are increasingly valued in up and coming neighbourhoods, as they allow alternative paths for bike commuters to take, as well as leisure room for casual riders. These factors can add up to serious gains or losses in overall value, and as such should be taken seriously when considering a property for purchase.
The safety of a suburb is of the utmost importance when looking at properties to purchase. If a neighbourhood is considered unsafe it is often incredibly difficult to maintain purchase value of a house, as well as taking yours or your potential tenant’s safety into consideration. Would you want to live in a suburb you didn’t feel safe in? Property pricing may be enticingly low in these residential areas, but weighing up the costs and the benefits of a safer neighbourhood is definitely worth the peace of mind that will come later.
As we move toward a more environmentally sustainable future, housing increasingly needs to be modified or renovated to account for newer methods of cost reduction, or reduction of wasted resources. These things include solar panelling and water tanks, as well as power storage within houses with solar panels, and more health-conscious building materials. By purchasing a house with sustainability in mind, you stand to increase the attractiveness of the property to future potential buyers or renters, as these things reduce costs and contribute to environmental awareness, reducing water use and coal-powered electricity use substantially.
The age of a house is often overlooked when assessing for purchase, especially if it has been renovated or “refurbished”. These are great ways to make the display side of a property look new, and add more space in the case of renovating, but often these things don’t do much, if anything at all, to the integral parts of the house, such as potentially compromised structure, or materials used in construction. Try to avoid properties with asbestos involved in construction unless you’re willing knock down the house, safely clear the debris from deconstruction, and then construct a whole new building on the site. Often older houses will have wear and tear expected of residential buildings 15+ years in age, and may need plumbing checked, or electrical wiring redone.
Last, but certainly not least, is location. When looking to buy your investment property, location is key to the success of all of the above criteria. Properties out in the country might be beautiful and have more land for what is often a significantly lower price, but they may not ever appreciate in value. A property tends to appreciate in value as a city expands, and the closer to the city the property is, the more valuable the appreciation. However, the purchase price will also climb the closer in you get, so it’s a careful balancing act to find the right place for the right price.
All in all, the process of finding the right investment property for you is a complex and often frustrating journey. It is rare that you will find a property that matches most of the above criteria, let alone all of them, however it is not an admission of defeat to accept 4 out of 5, and you will still get an amazing investment property.