With a bit of forethought about what you want to achieve from your investment, you’ll be better placed to choose a suitable property to park your money into.
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Think like a tenant
You will maximise the number of potential tenants, and hence the rental price, by ensuring you buy a property with broad appeal.
This means good-sized bedrooms, a functional layout, good access to shops and transport, and a working kitchen and bathroom.
Do your sums
Any investment property you buy has to add up.
If you’re not going to make money from it, either as a rental or from capital growth, then it’s not really a sound investment idea.
This goes for the purchase price, ongoing maintenance and any renovations or work you plan to carry out compared with your expected returns.
Manage your risk profile
Higher profits can be generated from higher-risk property, such as those in mining towns, but as we have seen recently, this can also lead to bigger losses when mining production slows or ceases.
But there are profitable investment options for those who are risk-averse.
Know your investment time frame
A long-term investment should have stable prospects, such as proximity to good schools, which will help it to continue growing in value over time.
However, a short-term investment could be secured in an area that is about to undergo sub-division or re-zoning, or it could benefit from a major infrastructure project or from buying in a booming market.
