5 Things to Look For in an Investment Property
Are you looking to invest in house and land? Residential properties make excellent long-term investments, first reaching ROI (return on investment) then turning into a steady source of income. According to Australian property law, individual rental homes, duplexes, and multi-family properties are all purchased with a house-and-land deal in which you become the owner of both the structure and the plot of land it sits upon.
Like any investment market, some homes will make better investment properties than others. What makes a great rental home or multi-family property? Let's take a closer look at the top five things to look for in an investment property.
1) Appealing and Accessible Location
Commercial properties aren't the only investments that need a great location. Residents are looking to rent homes near job centers, in good school districts, and conveniently located near traffic arteries. The appearance of the neighbourhood and nearby amenities are similarly important. The best investment location depends on the type of property you want to manage and the demographic of renters you hope to cater to.
2) Low-Maintenance Designs
For every property you seriously consider, you will need to have it inspected, and learn the building inside and out. Instead, why not cut through the red tape and consider building an investment property with Hotondo Homes? Building a new home or building a home when you purchase a house and land package with us means a clean inspection score.
As maintenance plays a major part, you might not have considered homes designed for low-maintenance upkeep when well cared-for. When you buy an existing home with Hotondo Homes, know that all our properties are built by experience local home builders with the highest level of quality craftsmanship and well-thought out design. The best part of building a new home is having a home that suits your needs perfectly - even when it's intended use is as an investment property.
3) Neighbourhood Councils and Conditions
Neighbourhoods in Australia all have specific council rules and guidelines, especially in specific historic and heritage neighbourhoods where style is essential to maintaining the local ambiance. Every council is unique, providing for a variety of local amenities and property restrictions. Get to know the council guidelines and regulations for every location you consider to discover if your plans will be welcomed or face hurdles.
4) Market Stability
The real estate market can vary in different regions. Some markets are absolutely stable while some fluctuate based on industry bubbles and global markets. Locations with universities, for example, provide an endless yet cyclical demand for rental properties from students. Expanding regions, however, are subject to housing bubble mathematics. If built homes exceed demand, market value will drop. Likewise, some neighbourhoods that are in demand are only briefly based on temporary circumstances like tourist trends.
Some good deals are only good for a few months before the market shifts. Property investors must be careful to select homes whose value goes beyond a temporary bubble. Above all, look for market stability for your investment.
5) Potential for Value Appreciation
Finally, look for markets that will appreciate steadily over time. An important part of market stability is a steady rise in property values. Find neighbourhoods where all or most of the homes have been appreciating in value through other local market fluctuations. Look for homes in areas that are rising in demand and those with infrastructure features that are more popular with modern residents.
By assuring that each investment property's value will appreciate, you ensure that your resale profits will be good should you decide to sell, or that residential rent income will progressively rise over the years making it worth holding on to.
If you are currently looking to build an investment property, Hotondo Homes can help. Visit our website today to find a local builder who can help you find great location for an investment property in your target area.
