6 Tips for Finding a Winning Investment Property in 2022
With property prices skyrocketing, it might seem like you can just buy any old home and hold on tight. Sadly that’s not the case if you want long-term results and profitability! The best investments require planning, which is why we’ve assembled 6 tips to help you find the right property for your growing portfolio in 2022 and beyond.
1. Assess Your Goals And Budget
Before diving into your property hunt, it’s important you sit down and really plan out what type of investment you’re after.
First, you need to decide if you want to focus on passive income with a high rental yield, or if you prefer long-term capital gains (or a little bit of both). This will help you know what to look for. E.g apartments typically have a better rental yield, whilst houses outperform units in terms of capital growth.
Secondly, how much effort do you want to put in? Do you want something you can buy and rent out immediately, or do you need to renovate it? If you’re going to renovate, will you do it yourself or pay professionals do it?
Thirdly, what type of tenants do you need to attract in order to achieve your goals? Would you prefer long-term tenants or rent it out as an AirBnB? Each demographic has its pros and cons, so choose what works best for you.
And finally, you need to decide on your budget so you don’t waste time searching for properties you can’t afford. There’s no use falling in love with a property if it’s outside your price range.
These are all questions you need to ask yourself at the beginning of your journey. After all, failing to plan is planning to fail!
2. Choose A Few Locations
Okay, so you know your goals and the type of property you want. Now you need to think about which areas can accommodate that.
For example, if you want a house and you have a budget of $600k that doesn’t need renovations, it’s unlikely you’ll find that within 5-10km of the city.
People will always have their own preferences, but a general rule is that proximity to amenities is always a safe bet. No one wants to spend their days constantly driving around to do everything, so look for a property that is well connected to cafes, shops, schools (if it's a bigger property), and even medical services.
Some of our favourite suburbs to get you started are Mooroobool, Redlynch and Edge Hill. Remember, land appreciates, buildings depreciate.
3. Look For Upgrade Potential
If you’ve got the time and the money, look for properties that need a bit of love. Now we aren’t saying to buy an old building that’s falling apart, but you’d be surprised how much value you can add with things like new floors, a simple kitchen reno, new cabinets or fresh paint.
Stay away from any buildings with structural issues (it’s not worth it). But if you can spot something that needs some cosmetic upgrades, you can do those quickly and it will almost instantly add value to the property.
4. Check What The Future Holds
Take the time to research any upcoming developments in the area. As an investor, gentrification is your best friend.
But for the best returns, you want to have bought into the suburb BEFORE the espresso bars and craft breweries start to appear. A good way to predict this is by going for a drive through the area. If you see lots of construction, new parks/infrastructure, and cafes selling acai bowls, you might just be in luck.
5. Look At Local Vacancy Rates
As an investor, this is an important one to focus on. Any time your property is empty, it means you are losing money.
Buy in an area with a tight vacancy rate (below 3%), and you’ll be in a great position as a landlord. If the area has a lot of properties without tenants that can be a red flag. Competition for properties will be tight, meaning that you are likely to get the asking price for your rent, and you’ll have a larger pool of tenants from which to pick your perfect match.
6. Contact A Real Estate Agent
Competition for property has never been hotter. We’ve got properties selling the second they hit the market, so you need to keep your finger on the pulse. One of the best bits of advice we have is to get in touch with a local agent.
Let them know what you are looking for, and they will be able to give you the heads up on listings heading to market so you can be primed and ready to strike. We’ve definitely noticed a huge jump in the number of properties selling off-market as sellers look to save on marketing costs and stress.
Now Put It Into Action!
Armed with this information, you now have a better understanding of how to find the perfect investment property. It might seem like a lot of effort, but it will all be worth it once your hard work pays off. We hope this helps you in your journey of buying an investment property in Cairns. If you need more advice or assistance, call us any time on 4054 1181 or contact us via our website.
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