Buying your first rental property is a big decision. It represents a major investment but it can also prove to be a very lucrative one.
Like any major decision, there are pros and cons. It’s important to do your research, take your time, and make informed decisions.
Here’s a few considerations –
Getting the right mortgage
Understanding the mortgage market is imperative. Getting the right mortgage will reduce your costs and increase your cash flow. Other things to consider will be the length of your mortgage, is it best to opt for a 15 or 30 year loan for example. Should you go for a fixed term interest rate or is variable better? Seek professional advice and do your homework to find the best fit for you.
Positive Cash Flow
Firs-time investors can reduce risk by making sure their investment is cash flow positive. There will be unexpected expenses along the way and the economic climate can change; success is more likely when you have a margin for things to go wrong.
Invest in an area that promises a good return. The Sunshine Coast is a high-growth area giving it excellent investment potential. Again, research is key.
Talk to local real estate agents and don’t be afraid to have a chat with potential neighbours. Visit the area during the week, on weekends, and even during the evening to check out what the neighbourhood is like. Get a feel for the place to determine if its a good area to invest in.
Outdoor space is always valuable
The Sunshine Coast is all about lifestyle and renters are no different to homeowners in their desire to enjoy a nice outdoor area. You can give your property a competitive advantage on the rental market by creating an area for relaxing and entertaining out-of-doors. Add in some nice lighting, landscaping and decorative plants and you may just have a winner.
High Rental Demand
People will always need a place to live and will continue to need to rent a home even in tough economic times. This is one of the main reasons why a rental property is such a solid investment – with the proviso that you do your research and make sure the area you buy or build carries a high demand for rentals.
By choosing to build an investment property close to amenities like schools, shops and public transport you are increasing your chances of a favourable investment. On the Coast we have a major university and a university hospital; homes within easy distance of these should have excellent investment outcomes.
At Shadforth Lythgo we have repeat clients including in the investment property market. We apply our ethic of excellence and cutting-edge design to the investment sector and have delivered homes that stand out in the rental market and produce high yields for their owners.
If you’d like to discuss building a rental property, we’d love to hear from you. Please call us on 5493 9757.