Investing in property: Crucial factors to consider
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Buying property has long been seen as a sensible way to get a healthy return on your initial investment. However, while property developing can deliver a healthy ROI, there’s never a guarantee that it will be a profitable decision. So, before you decide to tie your cash up in bricks-and-mortar, it’s a wise idea to get as informed as possible. Carrying out large amounts of research is an excellent way to minimise the potential risks of property investment. The more informed you are, the easier it will be to make an insight-driven decision. Understanding some of the crucial factors to consider before investing in a property is a helpful place to start. Keep reading to learn more about some essential factors to research and analyse before you start buying properties.
Your plans for the property
Investing in property opens up many options. You might choose to buy a property and keep hold of it long term to build a nest egg and grow a retirement income. Or, you may prefer to buy a property and flip it. Both of these methods of property investment can deliver a healthy return. The question is, which one suits you better?
Your decision between these options will largely depend on whether you want to achieve a steady monthly income for the property by renting it out and then having the option to sell it at a profit many years in the future. The alternative is to buy the property and quickly work on renovating it for a fast re-sale. This may generate less profit, but it means you see a faster return on your initial investment.
Property market performance
Before you do anything else, understanding the way the property market is performing in the area is essential. Areas can vary significantly in terms of the average house price and the demand for properties. So, researching this specifically for the area you plan to buy in is a must.
Some parts of Australia have seen the number of profit-making resales rise. Brisbane is one of these areas with the number of profit-making sales increasing to 95.7% in the quarter. So, if you’re planning to buy a property in brisbane it’s worth checking the most up-to-date market performance figures before you buy.
If you’re planning to buy a property for a long-term investment and to rent it out, you’ll need to check the rental market performance in the area. Understanding the types of homes that are in demand from renters is a great way to help you decide what to buy.
Local amenities
As well as understanding the property market for the area, you also need to understand what it offers its residents. When you plan to invest in housing, you need to be sure that your property will appeal to potential buyers and tenants. Checking the local amenities, the quality of the schools, the employment opportunities and the crime rates will all help you decide if properties in the area are worth investing in.
