Finding the right property is always one of the first deciding factors when investing in property.
According to MRD clients and market research, the greatest motivating factor for investing in real estate is capital growth. Will my investment property increase in value?
Therefore, it is vital that you purchase at the right price in the right market; remembering the Australian property market is made up of many markets, usually at different stages of the property cycle (property clock) at any given time.
Investing in property differs from investing in shares on the ASX or other stock markets where the value of the company, people involved and cash flow is transparent. Real Estate is slightly more difficult to price, however when bought The MRD Way (link) provides you with the opportunity to purchase an asset at a fair market price. Yes, as stated previously, markets tend to bounce around in the short and even medium term, but over the longer term have historically not failed to deliver very positive results back to investors.
Partnering with MRD to obtain up to date property research, insight and knowledge on timing, locations and properties, coupled with the safety check of tough bank lending criteria provides you with the peace of mind to make sound investment decisions.
We encourage investors not to make investment decisions based on one aspect alone e.g. rental yields - that has seen people invest in single industry markets such as mining towns. MRD’s property selection criteria looks at many factors, including location, public transport, roads, hospitals, schools, employment, future infrastructure expansion plans, demand, supply, rental yields, price, capital growth, depreciation and more.
Getting the balance right between an investment property weighted towards rental income (cash flow) and capital growth is very important when investing in real estate. This balance will differ from one investor to another subject to their individual needs and circumstances. Cash flow is an imperative part of how you will afford to hold onto your investment property while you patiently wait for time and inflation to cause the value of your asset to rise. In time, all investment properties should produce a positive cash flow and offer you a variety of choices in retirement.
It is important to note that the different classes of residential property - townhouses, units, house and land, dual occupancy dwellings - can outperform each other over time.
For example, vacant land provides you with no rental return but could appreciate quicker if purchased in an area with limited land supply. Investing in a townhouse or unit will have less maintenance costs than investing in a freestanding weatherboard house on a big block. Some suburbs offer higher rental yields but may provide lower capital growth opportunities.
Consideration ought to be given to the the demographic makeup of potential tenants in the area you purchase your property. For example, areas close to primary schools schools will attract a different type of tenant to those close to a university. Property close to the inner city of a capital city is likely to attract professionals who do not need (or want) a backyard - rather secured apartments, whereas being closer to a primary school is likely to attract someone looking for either a townhouse or house (subject to incomes and affordability).
You can see that there are many factors and considerations that need to be taken into account when investing in property. MRD was established on 15th May 2002, entering our 14th year in business. We have the knowledge and expertise to help you to choose your next investment property purchase wisely, as well the right team to continue to partner with you so your investment property experience will continue to be successful over time.
Speak to a property specialist today on: 1300 883 854 or contact us