So you want to be an investor? OK, great. Investing in property can be a thoroughly rewarding experience and give you whole new lease on life (pun intended), but do you know what you’re in for? You may have read a beginner’s guide here and there or you might be completely new to investment game, either way, we’re happy to have you here because at the end of this article you will be well on your way to investment success!
Is Melbourne still an ideal place to invest?
You’ve probably noticed that Melbourne has been through the property market wars lately, which has given those who were hoping to buy into it a reason to maybe consider otherwise. So yes, Melbourne may not be at the top of its game right now but before you go scrambling to snatch up houses in Tassie, let’s take a look at some of the key factors in the future of Melbourne property. According to Property Update:
Victoria continues to see economic growth, including an increase in the number of high paying jobs
Every week, 1,500 new houses are being created in Melbourne alone, which is still struggling to keep up with the thriving demand
Foreign investment remains strong as Melbourne continues to garner much interest from migrants, tourists, foreign investors and developers
First home buyers are back once again, and as keen as ever to get into the market
So given these key points, it’s safe to assume that Melbourne is still a serious contender in the national property market and not one that you’ll want to overlook.
OK, so with that in mind, let’s move on to the next step…
What’s your budget? This is the absolute first thing you’ll want to determine before you start looking high and low for the perfect investment property. You’ll want to know exactly how much you can afford as this is going to directly influence your investment plans, type of properties, and areas you’ll be able to afford.
Before you get too excited, I would highly recommend making an appointment to speak with a lender or mortgage broker so you can get a comprehensive overview of your financial options and your chances for pre-approval. This should then give you a clear picture of what steps to take next.
There’s no such thing as too much research
Going into property investment with the best of intentions and an intuitive state mind is never a bad idea, but do not, I repeat, do not rely on these alone.
As an investment enthusiast, your new motto is going be ‘head over heart’, and I’ll tell you why. When you go to inspect a property and negotiate on price, you can’t rely on anything other than cold hard facts. If you’re planning on living in the property first then it’s going to be extra essential not to let your emotions guide your decision making, because this will just get in the way of your ability to negotiate for the best possible price and look objectively at the facts.
After all, the main goal of property investment is to buy a property that has the highest chance of bringing you the optimal amount of return for your investment. This comes by way of the amount of rent received, the potential for housing price growth over time, and/or the returns made from renovating an existing property and boosting its value.
Sounds simple right? Well, this is where that subheading comes in: there’s no such thing as too much research. And you’ll want to start yesterday because there’s a lot to learn. Don’t get overwhelmed though because there are some simple steps you can take to help you make the most informed decisions possible.
So where do we go from here?
Where indeed? Well, let’s break it down…
Where should I look to invest?
There a number of factors you’ll want to consider when looking for the perfect place to find your investment property. Firstly, you’ll want to keep an eye out for property hotspots. This will generally include suburbs with:
Long-term potential for growth
Meaning areas that are currently in high demand or up-and-coming suburbs that are presently going through a phase of gentrification and a boost in the local economy and lifestyle. Think inner city suburbs and outer suburbs showing a new generation of cultural re-emergence.
Situated close to public transport
This is always going to be more favourable to potential buyers and tenants as the benefits of convenience will never go out of fashion. There’s a reason that “Close to public transport” is in the top 3 points of interest in any housing advertisement.
Views! Views! Views!
Who doesn’t love a good view? A home with a view is going to be highly sought after and will, therefore, always be in high demand. Think city views, ocean views, mountain views, lakeside views… basically, if it’s picturesque, it’s a view.
Close to schools and hospitals
I think it’s fairly safe to assume that people won’t stop having families any time soon. Given that fact, properties that are situated near to schools and hospitals are going to be very popular with young families looking to rent or buy. Properties nearby both education and healthcare facilities will always be high in value.
Low crime rate
This is also going to be high on the list for families, but also for just about everyone else as well. It goes without saying that people want to live in an area where they feel safe and secure. So do what you can to avoid investing in criminal hotspots or pretty much anywhere with higher than average crime statistics.
Potential against all odds
We all know suburbs that remain the butt of every joke or are subject to local stigma for one reason or another. People love to gossip but you shouldn’t always rely on hearsay. Many areas that locals might warn you off buying into may actually be the perfect spot to find a bargain. Now you have to be careful when making this judgement as sometimes the stories are true, but oftentimes, doing a little research into the potential growth of these ‘no-go suburbs’ will give you a fresh perspective and you could ultimately end up the early bird that gets the worm.
This is by no means an exhaustive list of options to consider but these are fundamental points you will want to look deeper into before you go out and start inspecting properties. We’re sure, however, that this should give you a big boost in confidence and set you on your way to becoming a property investment champion!
Mike Heathcote is the founder of Building Masters Inspections and a veteran builder with decades of experience. Utilising his industry knowledge, Mike and his team of experienced Builders provide an Inspection Service offering expert opinion on the true condition of buildings, including estimated repair costs, helping home buyers find their perfect property, Melbourne wide.