What To Look For In An Investment Property

By Author: Carolyn Clayton
Total Articles: 130
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An investment property that proves effective in the long term should meet three key criteria. First, it has excellent returns. Second, it is effective when it comes to taxes. Third, it has growth potential – nothing extraordinary, but just enough to ensure that it continually develops. To find an investment property that meets these criteria ensure that the property you choose has all the following characteristics.

Good Placement
A reliable investment property is located in an established area that is not likely to suffer greatly when economic problems arise. Properties situated in the proximity of developing suburbs, which are normally gradually absorbed in the city, are frequently a solid investment.

It's important to note that knowing the prices asked for properties in the chosen suburb and monitoring them over a period of time significantly reduces risks. In terms of value, properties that are at the both ends of the spectrum, i.e. those which are expensive and those which are cheap, are not usually safe investments. Median-priced properties are more reliable in the long run because they have more ...
... appeal for all tenants.

The property you choose to invest in should not be located on a main road, not should it be too far from one. The ideal placement is two streets from a principal road. Properties that are close to schools and shopping centres also have an advantage, though they should not face those establishments.

Right Type For Your Budget
The decision of whether to invest in a unit or a house is entirely personal and depends on the budget and aims you have. Starters usually go for units because they are cheaper and easier to manage. It's important to remember that in time the value of a building can only depreciate. By contrast, the land on which it lies can only increase in worth.

When planning to buy a unit there are two rules you should remember. First, don't purchase a unit which is in a complex that has a lift or swimming pool because of higher strata levies. Second, don't get a unit in a large complex. Not only do large complexes tend to be in a poorer condition than smaller ones, but also they often feel uncomfortably crowded.

Accessible Starting Rental Price
Properties that allow you to ask for a high rental price are not necessarily those which bring the most money. Before an investment in a property can be profitable the unit or house you let must have a tenant. Depending on the placement of the property, finding quickly a tenant may be a problem, even if your offer is advantageous. In short, the lower your investment, the lesser your risks. It follows that knowing about the vacancy rates in the area helps tremendously. A deluge of new properties to be available soon is often a sign that vacancy rates may rise.

To minimize your risks when investing in property ensure that the property you purchase is adequately located, in good condition, and affordable. Also, don't forget to tailor your plans according to your investment assets. To be on the safe side, start small.

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