Things to be aware of when buying an investment property in Brisbane
Things to Beware of when Buying an Investment Property
When buying an investment property, location is a big part of the equation. However, with changing markets and economic climates, finding the “best” location in which to buy an investment property can prove quite challenging.
Indeed, there are so many factors that should come into play to determine the “best” location in which to buy an investment property and to avoid the common pitfalls that so many property investors have encountered.
To help you on your path to buying a great investment property, we have compiled a list of the key things to look out for and avoid:
Buying Into Fads
As with all trends and fads, a property area that is “hot right now” may not be so hot 10 or 15 years down the line. When seeking to buy an investment property, it can be tempting to focus your attention on where the hot spots are right now – the gentrified areas, the commercialised areas. However, these areas could look very different in a decade’s time.
Be careful not be caught up in paying inflated prices for a property simply because the area in which it is located is hot right now as your return may be quite minimal in the long run. Look not just at growth rates, but the stability of those growth rates over the past couple of years. Has there been a recent spike? Is there consistent renovation improvement properties and adding value to the area? What sort of infrastructure projects are planned?
Trusting In Rumours
People will have different ideas and misconceptions and conflicting opinions about where the ”best” area to buy a property is or where “the next big property hotspot” is located. There can be lots of rumours floating about regarding where demand is projected to rise and where commercial investment is supposedly going to focus.
Our advice is to avoid taking heed of any rumours from friends, family, colleagues or the guy on the street. Instead, trust the insight of property agents on the ground in the area, who truly have their finger on the pulse of trends, growth rates and demand.
It can be tempting to “go it alone” when buying an investment property and save some cash by relying on the advice of those around you. However, investing the assistance of a property buyer’s agent to help you properly assess your options can save you from making a huge financial mistake.
The Impact of Proposed Developments
The purchase of an investment property is intended to yield positive returns in the long term. Therefore, it is important to consider not only the current amenities and developments in the area, but those potentially coming down the line.
If you are considering buying a property in an area because there are proposals for the build of new infrastructure and amenities such as schools and hospitals, look into how concrete these proposals are. Such developments could certainly lead to increased property prices down the line but you will need to be sure they are actually likely to come to fruition.
Likewise, it is important to research what proposed developments are in the works which may negatively impact the value of your investment property down the line. Plans for social housing or constructions such as power plants in the area could lead to a sharp downturn in your potential return on investment.
Focusing Only Non- City Areas
With continuous strong demand for city properties, it can be a common practice for property investors to seek options outside capital cities. However, city areas are where you can expect the strongest level of competition and of course, the highest property prices and potential for capital growth.
More and more, professionals and families are seeking to decrease their commute to the CBD for work so demand for inner city property is most likely to exceed supply in the long term.
Investigate Property Taxes and Rates
When buying an investment property, it is important to consider not only the purchase price, but the ongoing fees. There can be stark differences in property taxes and council rates from region to region in Australia. That’s why it is important to consider the true cost of the property purchase, collective of the initial and ongoing fees.
While an area might yield a great rental price, your profit on rental fees may not be quite so significant when all taxes and rates are considered.
Whether you are a new or seasoned property investor, the key to finding the right investment property is to take the time to do comprehensive research and don’t rush in. There truly are no “get rich quick” schemes when it comes to investment properties.
Taking the time to consider your investment and all of the potential impacting factors can really pay off in the long run and be the deciding difference between making an investment mistake and landing a golden investment opportunity.