Choosing a residential rental property to buy is a complex decision. Of course, it’s a good idea to gain advice specific to your circumstances. But, there are some general areas to consider when you’re selecting a potential investment property.
What is the Local Rental Market Doing?
For example, are similar residential rental properties in the area frequently tenanted? It’s a good idea to do some research and determine how likely it is that your property will be rented. If your property is frequently vacant, this may lead to unanticipated financial issues, since you have to keep covering costs while the property is empty.
What is the Local Property Market Doing?
In other words, is the value of the residential rental property likely to grow over time? You can research the local property market in the area, and see what you can determine about this.
Is The Property Attractive to Your Target Market?
What kind of renters are likely to be interested in the residential rental property? Does the property suit their needs and preferences, or could it be affordably modified to do so? By keeping your potential future tenants in mind, you can increase your chances of finding a tenant quickly.
What Changes Are Happening in the Area?
New residential and commercial developments and infrastructure projects can affect your residential property. Assessing the area can give you some insights into the likelihood that your property’s attractiveness might change. These changes could be positive or negative. For example, a new school in the area might make the suburb more appealing to families.
What Expenses Will You Incur?
Different residential rental properties can involve different expenses. For example, you might need to pay Body Corporate fees in your situation, or you might need to complete some renovations. Your mortgage repayments are also important to consider. And, you’ll also need to budget for less expected bills, such as maintenance that might pop up suddenly. It’s a good plan to gain financial advice about your situation before you make an investment decision.
What Are Your Goals for the Property?
Depending on your financial goals and situation, different residential rental properties might be more or less suitable. Consider the impact a particular property will have on your financial goals, such as your immediate cash flow, and the long-term capital gains. Your priorities might affect which property makes the most sense for your situation.
How Often Will You Visit Your Property?
You might want to delegate inspections and other duties to a property manager. But, if you don’t, you might need to take into account the time and costs of travelling to your rental property’s location.
Have You Obtained Financial Advice?
Make sure that you gain financial advice before you proceed with buying an investment property. This is a major decision that can have a big impact on your financial situation. By gaining advice before making a decision, you can be more confident that your investment property will bring you financial benefits for the years to come.