8 Essential Considerations When Buying An Investment Property
Investing in property can be a rewarding venture, but it’s no easy task - especially if you’re not sure what to look for. To make a smart investment, you need to understand the key factors that contribute to a property’s long-term success.
Here are 8 must-know considerations to guide you when purchasing an investment property:
1. Set clear goals
The foundation of any successful property investment is knowing your “why.” Are you aiming to:
Build wealth through equity growth?
Save for retirement?
Boost income with rental yields?
Minimise taxable income via depreciation and tax credits?
Establish your goals upfront and ensure every investment decision aligns with them. At Providence, we work with you to define your objectives and match you with properties that suit your long-term vision.
2. Understand capital growth
If your goal is wealth creation through equity, focus on the suburb’s 10- and 20-year capital growth rates. This data offers a realistic view of the property’s future value. To achieve your financial goals, plan ahead - calculate when you can afford your next property and how many properties you need to meet your targets.
3. Evaluate rental income
Rental income often services the investment loan, so it’s crucial to get accurate estimates. Obtain multiple rental appraisals from local agents and base your budget on the average figure to avoid surprises.
4. Engage a professional property manager
Effective property management is critical for wealth creation. A professional manager will handle tenant relations, maintenance, and payments like water rates, land tax, and council fees - ensuring your property performs well. Plus, their fees are tax-deductible, making it a stress-free investment.
5. Analyse vacancy rates
Low vacancy rates indicate high demand. Research the current vacancy rate in the suburb and stay informed about local council development plans. Too many new properties in the area could impact demand and rental returns.
6. Check employment drivers
Proximity to strong employment centres promotes steady population growth, which increases housing demand. Investigate nearby industries and businesses driving job growth in the area, as this can directly affect property values.
7. Prioritise transport and accessibility
Location matters. Properties near reliable transport links, amenities, schools, and entertainment hubs are always in demand. Ask yourself: Is the property practical for everyday living? Are there any upcoming public transport upgrades that will boost its appeal?
8. NAPLAN school zones
High-performing schools can significantly increase property demand. Suburbs within the catchment areas of schools with strong NAPLAN results often experience higher growth, as families prioritise access to quality education.
By focusing on these eight factors, you’ll position yourself to make a confident and informed investment decision. Whether you’re building equity, increasing rental yield, or planning for retirement, a strategic approach is key to property investment success.
At Providence, we don’t just find properties – we uncover opportunities. By blending decades of experience with rigorous research, we empower our clients to make confident, informed decisions. Ready to start your property investment journey? Let’s find the right opportunity for you.
