It is impossible for individual investors to influence interest rates, employment trends and consumer confidence. However, there are several factors you can control to ensure good capital returns for your property.
Start by paying a fair price for a property that is in a good position and in a suburb or town that has enjoyed long term buyer demand. An investment home should have aesthetic appeal (or the potential for) and unique and positive features such as a desirable view, be close to public transport, have flat, manageable gardens and yards. Floor boards and tiles rather than carpet can also make an investment home more popular with tenants and less costly to maintain.
Consider buying an investment property in an area you are familiar with as it will involve potentially less research time on your part. Start your research by visiting www.rh.com.au. If you prefer a more direct approach, check recent sale prices with a Raine & Horne agent in the area. This will give you an idea of what you can expect to pay for local properties.
While you’re at it, ask the Raine & Horne agent about the suburb or town’s rental yield and vacancy rates. A high vacancy rate may indicate a less desirable area, which could make it harder to find a tenant. That said, the prevailing rate could be quickly influenced by new infrastructure, more jobs and consumer confidence finding their way into the region you’re interested in buying into. This information will be available from your Raine & Horne agent.
Note any proposed changes in the suburb or town that may affect future property prices. Issues such as new developments or zoning changes can affect the future value of a property. Your local council will be able to provide this advice.
To enhance ongoing rental returns, be sure to secure good tenants on long-term leases with the help of a Raine & Horne property manager. Also commit to regular maintenance to ensure small repairs don’t morph into major expenses. For example, it will prove a worthwhile exercise to pay a handyman to regularly oil a sun deck. Avoid this cost and a rotten deck – which will prove a major expense to replace – not only reduces the value of your investment home but also presents a potentially expensive public liability issue.
As such, protecting the value of your rental home also involves having adequate landlord insurance cover, planning for taxes and understanding your eligibility for depreciation allowances. It also means keeping good records to control costs.