September 1, 2015
Property Investment and the Plan to Succeed
Property Investment – What is your Plan to Succeed?
You’ve decided it’s time to invest – you’ve finally found the ideal investment property.
The question you must now answer is, “What underpins the investment you intend to make?“
There are of course a number of issues which will be highly relevant to your decision to buy an investment property. A few matters for you to consider are:
1 – The property itself
Proper investigation as to the physical condition and state of the property is critical. You might have decided to buy the property because of its potential, and you know that from the very beginning you will have to spend money on the property.
So you need to take into account the value of the work you need to do and the time that the work is likely to take. Remember, time spent on work means no rental income in that time.
If you need to find out what work might be required, then it will be important to have a building and pest inspection done. You will need to establish the likely expense of the work and take this into account as a part of the cost of acquiring the property.
Keep in mind that there are tax considerations as to the works you are going to do. Check with your accountant to make sure that tax considerations work to your advantage, not against you.
2 – Location, location, location
The rental potential of the property will depend on a number of issues – not the least being the potential tenant you might wish to attract. Is the property near to good schools? Is it near a hospital? These are just some of the questions you will need to consider.
If the investment property is near schools then you might well attract families as renters. If the property is near to, say, a hospital, then you might well attract doctors or nurses or other health professionals who work at the hospital.
What is the rental potential of the property? You should obtain various rental quotes from rental agents before signing a contract. The rental income will be decisive in determining whether or not you will buy the property because after all you are really looking for a good return on your investment.
3 – Have a plan
Above all, you need to have a sensible and logical plan for the property to achieve your goals.
- How long do you want to hold the property?
- How much money are you prepared to spend on the property?
- If you spend the money, will this increase the rental value of the property or will this just be money you should not have spent?
Are you buying the property because of the potential you see in it? The property could be nearby to a development which you consider will increase the value of the property or you might be aware of changes to planning issues which could make the property more valuable. The property might even have development potential. In the latter case – you should take advice from town planners, trusted real estate agents and solicitors.
You need to set goals in order to make a successful property investment plan.
Once you have selected your investment property, contact us for all your conveyancing needs.