Our guide to investing in property

For many Australians, investing in property is a smart way to build wealth. Whether you’re ready to take out an investment loan, or you’re looking at other ways to make a big move, here are some key things to consider.

Location, location, location

When deciding where to buy, here are some key questions to ask yourself:

• Do you know the area? If you do, you can feel more comfortable with your purchase – and you won’t have to spend so much time researching.
• Is the suburb growing? You could have more chance of making money on your property if the suburb is up and coming.
• Is the property close to everything? Being close to schools, shops and transport could make a better investment.
• What is the area’s rental vacancy rate? A high vacancy rate might mean the area isn’t in demand, which could make it hard to rent out or sell the property.
• What does the future hold? If there are any big changes proposed in the area, this could impact the property’s future value.

Think about the features

Location is a big factor, but so is the property itself. So when you’re looking at features, consider what corner of the market these will appeal to – e.g. singles, couples or families? It’s also a smart move to aim for features that will attract more than one target market, so you’re increasing your chances of securing good tenants. Also, you’ll want something that’s easy to maintain to keep the costs down.

Picture life as a landlord

Finding tenants, collecting rent, doing inspections, organising the plumber – there’s a lot that goes into taking care of an investment property, and a range of legal responsibilities you have as a landlord that you’ll need to understand.

Many people outsource the bulk of the heavy lifting to property managers. If this is how you want to go, just make sure you weigh up your options to find a manager you can trust.

Plan your finances

It might sound obvious, but the more planning you do, the better position you might be in to pick the right home loan and make a great investment. Here are some key things to do:

• Keep the up-front costs in mind. This includes the deposit, stamp duty, legal fees and conveyancing fees. It all adds up, so it’s best to calculate the costs before you begin.
• Keep the ongoing costs in mind too. These include council rates, insurance, repairs and maintenance, utilities, property management fees and mortgage repayments.
• Chat with a financial advisor. Find someone you trust to talk about the best ways to manage your property and investment home loans. This could mean negative gearing, using the equity in another property you own, tax implications and more.