Choosing an Investment Property

Most first time investors choose to invest in residential property. It is more familiar and, therefore, easier to understand than the share market.

By Rachel Hutchinson

10-12-2018 |
Most first time investors choose to invest in residential property. It is more familiar and, therefore, easier to understand than the share market. We all expect our investment property to grow in value. Therefore, a choice needs to be made on two important criteria: location and quality. Keep in mind that this is not a property that you will be living in so always look at the property through the eyes of a potential tenant. A property located close to transport, schools, places of work, shops and recreational facilities will be in greater demand and command a higher rent. The property needs to be desirable and of a size that suits the area’s average family. If located in a family area and near schools, a three or four bedroom house or apartment may be more in demand than a smaller property. The property should be attractive and as low-maintenance as possible. As a general rule with apartment investment, modern buildings require less upkeep and are usually more desirable to tenants. However, concierges, excessive numbers of lifts, pools and gymnasiums all add significantly to strata maintenance levies and these can heavily erode bottom line investment returns.