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What makes a good or a bad investment property?

what makes a good or a bad investment property?

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what makes a good or a bad investment property?

What makes a good or a bad investment property?

If you think property investors are hoarding all the properties, we’d like to drop a truth bomb with you.

The latest stats from the ATO revealed that over 71% of property investors in Australia own only one investment property. Yes, JUST ONE!!!

And sadly many investors aren’t seeing the returns they hope for. Most investors failed to build a sufficiently large property portfolio to provide them with a substantial retirement income.

The fact that this has been the status quo for years, might make you scratch your head and ask: “Why is this the case?”

See, it’s often due to the lack of research, locking in the wrong property in the wrong location. 

So together in this post, we are going to pull apart and figure out what makes a good or a bad investment. 

This is what we wish more investors know so they can make better investment decisions and make much higher returns. 

What makes a GOOD investment property?

 

  1. Location:
    Think about what makes a neighborhood appealing to buyers. Look for areas with top-notch amenities, low crime rates, and easy access to schools, parks, and transport. Take note of the street’s appearance — do residents take pride in their homes? Also, consider the location’s history of capital growth, as this can indicate future performance.
  2. Growth Potential:
    Ensure your property is situated in a city and suburb poised for growth. Investigate current and projected population trends, as well as any planned infrastructure developments that could boost property values over time.
  3. Rentability:
    Choose a property in an area with low vacancy rates, indicating strong demand for rental properties. Aim for healthy rental yields to ensure your investment generates positive cash flow, and prioritise properties that appeal to potential renters.

What makes a BAD investment property?

 

  1. High maintenance costs:
    There are financial aspects associated with the property from maintenance costs and repair bills to property taxes and insurance costs. Some properties might have serious defects or structural issues that can quickly eat into your profits. It’s crucial to do your due diligence before buying the property.
  2. Significantly Negative Cash Flows:
    If the property is draining more money out of your pocket than it’s bringing in, it’s not a wise investment. Negative cash flow, which occurs most often when an investor has borrowed excessively for the property purchase, can result in a default on the loan unless the property can be sold at a profit.
  3. Low Rental Demands:
    One of the biggest mistakes is purchasing an investment property to meet your needs instead of the renters’ needs. Be sure to invest in areas with high rental demand and consider who your renters are likely to be.

We hope you understand the true value of having this kind of knowledge. When you know what to look for, you can grow a successful property portfolio as big and broad as you want. There’s a lot more to cover, so book a call with our expert team. We’ll spend half an hour understanding where you are at and explaining how our services can benefit you. Don’t miss out – schedule your session today!

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