Once you become aware of the amazing potential that investing in residential property has for creating substantial wealth and giving you a financially secure future, where should you start? What type of property should you look for? What sorts of features are desirable to make a property both easy to rent, and give it the potential for the greatest capital gains?
These are questions faced by many new investors. In How To Research Investment Properties, Debra Lohrere explains in simple to understand terms what you should be looking for and how to start researching the market, discussing the important issues of negative gearing, varying property prices, and different investment strategies that will best suit your current financial situation.
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How do you narrow down the geographic location to purchase a property in? There are several factors to consider when selecting an area. Firstly you should either look for an area that has a long history of high capital growth or look for an area that currently has a high population growth, and hence should expect to produce high capital growth within a short period of time, as the demand for properties in that area, starts to exceed the number of properties available.
It should also be an area returning good rents, with a low vacancy rate and a high desirability factor. It has to be somewhere where people will want to live. Finally it will need to be an area that offers affordable properties in the price range that you are seeking.
You may prefer to purchase a property that is close to your home, in an area you are familiar with – if that area meets one of the above criteria. Alternately you may decide to purchase further a field, or even interstate. There is nothing wrong with this approach, as long as you do diligent research.
Once you have selected a suburb, there are a few specific items that you need to find out about. These include any future road plans and future developments currently in the planning stages. Find out where all the public and private schools and shopping centres are located. Do some research into the employment trends in the area and find out if there are any impacts that may affect them – such as a reliance on one particular industry which may employ a large proportion of the population in that area. For instance, if a great proportion of employment in a particular suburb is at the local car manufacturing plant. What impact would the possible closure of this plant have on your property? Would it still be in high demand? Would you be better choosing a suburb with a more diverse employment sector?
The most important advise that anyone can ever give you in relation to investing in anything, is to “Do your homework first”. Research and knowledge are the keys that enable you to make intelligent, well informed decisions. In this manual I explain where and how to start researching the property market, for the property that will best suit your current requirements.