Investing in residential property is seen by many people as a sound strategy, providing a stable income and good long term capital growth. Even through the global financial crisis, the median house price in Perth declined only marginally in 2008, and has since recovered.
Following are five tips to consider when investing in residential property.
1. Get Professional Advice
Your financial circumstances may be different to everyone else’s, so make sure you get independent advice from a financial advisor or accountant before deciding to invest. Consider your requirements in regard to taxation, depreciation, positive or negative cash flow, etc.
2. Consider all of the costs
As well as stamp duty and settlement fees, there may be costs involved in renovating the property. An older property may be cheaper to buy, but will have higher maintenance costs. There are also rates, insurance and management fees.
3. Research the Market
At Country Values Real Estate, we have a lot of experience in the sale of investment properties. We also have an experienced property manager who can advise you of the likely rental return that you can expect to achieve.
Subscribe to our Property Alerts, to find out about new listings as soon as they hit the market. We also publish our sold properties, so you can see what prices are being achieved.
4. Buy with your head, not your heart.
Investing should not be an emotional decision. The property that provides the best return on investment may not be one that you would live in yourself. On the other hand, a higher standard of property will generally attract a higher standard of tenant. The general rule is higher return = higher risk. Weigh up the options and make the decision that is right for you.
5. Appoint a Professional Property Manager
It may be tempting to save a few dollars and manage your property yourself. Country Values Real Estate has the experience and local knowledge to find a suitable tenant and make sure that your asset is looked after.