What’s the Best Investment Property?
Investing in property is always an exciting venture, with a bit of prior market analysis and hard work one can get it right and the rewards are too many to list. But before one makes the big decision, it is essential to spend some while thinking about what sort of a property you wish to invest in. Is it going to be a villa, a townhouse, a flat in downtown CBD, or a small unit in one of the suburbs? The fact is that there is no hardset rule on what does and does not make a good investment property. It all depends on a range of different factors, really. Most property investors simply tend to go for houses because they are the most common means of residence and give the buyer the option to play around, redecorate, renovate and upgrade. Smaller residences like units and townhouses come with less flexibility and thus become less attractive an investment from some people’s points of view. Yet in another instance, some argue that from a maintenance perspective, the smaller the investment property the better. It all just depends on what you really want.
Many experts feel the true value of a property lies in the land itself. This may be seen as an advantage a house has over a unit, though it really depends on a range of considerations such as the local council’s regulations concerning town development, the location and the area’s ability to cope with population growth and urban sprawl. It is also crucial to ensure that the property is suitable for being put up for rent. Often times, properties that come with embedded incentives such as done up patios, swimming pools, or an extra parking space for visitors make the property more attractive to prospective tenants.
One can never underestimate the importance of quality. Regardless of the sort and style of investment property you are about to purchase, it is important to make sure that the property is of the highest quality you can afford. After purchase, maintenance is the next most important factor to bear in mind. The better you are able to maintain your property the higher the chance of it remaining as a good investment property on the market. If you hire an agent to manage your property, as most investors do, then try and ensure that increases in rent are not too frequent and the method of payment available to the tenant is flexible. If the rent is beneath the market standard, then you basically reduce your profitability in comparison to your competitors. If the rent is above the market standard, then you basically risk making your property less attractive to your prospective tenants. Striking the right balance when it comes to rent is key.
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