What To Look For in a Dream Investment Property

The debate centred on the “ideal investment property” can go on endlessly. There are many schools of thoughts regarding what makes for a property investment safe haven. Here are 5 components around which there is a consensus in the expert fraternity.

Location

Location is a big draw. There is just so much noise being made about desirable locations and it is not an unpleasant noise I believe. Ideally, you should select locations keeping two things in mind. 1) The properties there should not be any close to the peak rates, thus allowing you to make capital gains. 2) There must be diverse factors of economic growth. In other words, buy in areas supported by multiple-economies so that bust in the prime economy (as was the case in mining-centric areas) does not result in real estate crash.

Renovation-friendliness

Is your great investment property renovation-friendly? Investors, whether they have a ‘flip’ strategy in mind or a “buy and hold” one, they look for those houses which can be renovated and extended elaborately. This way, unless they overcapitalise during renovations, they have a good chance of making decent profits.

Rental yield

Buy only after researching the rental yield and vacancy rate of the neighbourhood. For hardcore investors using negative gearing, this advice may not amount to much. But for all others, who want a reasonable positive cash flow, it is always nice to know in the back of your mind that you can get good tenants willing to pay the market rate.

Legal aspect

It is always advisable to prefigure legal malice associated with a property. Any property worth its salt must be free of encroachments. It should have its title deeds transparently laid out and must not uncover dirty and damp areas during building and pest inspection. If your conveyancer has a persistent frown while doing his job, be assured there is something wrong with the property.

It is not a certainty that following even a zillion advices can help you on the road to buying that dream investment property but you surely boost your chances this way.

What do you first look for in your dream investment?