Start your investment property search by chatting with real estate agents about what’s happening in the rental market. What are renters requiring in terms of location, number of bedrooms and bathrooms, parking, and property type?
Establish Your Borrowing Level
Once you understand of the market and what you’re looking for in an investment property, talk with the bank about how much you can afford to borrow. Ask your bank for a pre-approval of your investment property loan so you know what to look for.
When it comes to buying an investment home the price of the property needs to match your budget and cash flow.
Negative or Positive Gearing
It is also important to decide if you want to positively or negatively gear your home so you can choose the right price point.
“Gearing is when you borrow money to invest, and it’s most often talked about with regard to investment properties. The income earned from your investment is usually positively or negatively geared.
A property is positively geared when the rental return (the amount of rent you receive from your tenants) is higher than your interest repayments and outgoings.
A property is negatively geared when the rental return is less than your interest repayments and outgoing (Commonwealth Bank).”
Negative and positive gearing have different benefits, so you should talk with an investment professional about what’s right for your circumstances.
Position for the Right Rental Market
If you are targeting young professional renters think about lifestyle, for example look for suburbs with cafes and restaurants for eating out, and bike trails and parklands for fitness.
If you are looking for young families, building in proximity to a quality school with a good reputation makes a lot of sense.
Commuting to and from work is also important factor. Building close to the highway and train line will increase your potential market to those working in Brisbane. It’s also a good idea to visit the local council and review what plans are in place for future work.
Buying in a growth area is highly recommended as there is usually a strong demand for rental properties.
If you’d like to chat about your ideas for building an investment property, we’d love to chat. We have solid experience in this market. Call Tony today on (07) 5493 9757