How To Find A Profitable Investment Property
Updated: Mar 9
When investing in property, it's important for property investors to consider the factors that will contribute to the profitability of it. Here at REIF, we have a team of specialists researching market trends and properties to ensure that our client's are able to make a passive income with properties offering a healthy rental yield. It's important to consider the types of properties that will generate you a supportive income from factors including; the property itself, where it's located and how it will benefit potential tenants.
Areas With High Supply and Demand
Investors generally see a profitable return from their property when they buy in areas that are in demand. The higher the demand in a location correlates to the decrease in supply. Furthermore, increasing the value of a property. This means that more people are wanting to live in that particular region, which can generate a passive income for you as a property investor.
At REIF, we are firm believers that new properties are a better investment strategy. We like to help our investment clients take a long-term view with real estate investing. New properties tend to generate property investors a greater return on investment. In the video below our CEO and Founder, David Chehade, gives four reasons as to why new properties are generally more profitable:
Maximise on Depreciation - when investing in new properties, you can actually claim depreciation as a tax deduction. The ATO considers the fact assets decrease in value over time and that's why newer properties are able to be claimed on tax.
New Properties Have a Better Tennant Appeal - new properties generally have a greater appeal to tenants and the easier it is to fill your property with people who want to be there, the easier it is for you to make an income. Newer properties also tend to have a higher rental yield, which means that you are likely to see a greater return on investment.
Warranty and Maintenance - when purchasing a property for investment purposes, you want to be able to set and forget. We work with builders who offer anywhere between 7 to 20 years warranty on their products so that they don't have to fork out additional repair costs to faulty products.
Government Incentives and Savings - if you are looking to purchase an investment property, new properties generally offer investors greater incentives and savings. It depends on each State and Territory but there are generally bigger savings towards stamp duty.
Invest In Areas With Potential Price Growth
When looking at an investment property, you want to investigate areas that have the potential for price growth. While you cannot predict the future and what it will mean for you as a property investor, you can research the trends of a region and the local infrastructure projects. At REIF we have a team of researchers in the acquisition space who are constantly on the lookout for properties that are likely to increase in value over time with regard to their location.
Projects and facilities in the location that are likely to support the price growth of your property from a long term perspective include:
Parks and Recreation Facilities
Accessibility to Education Facilities
Accessibility to Public Transport and Transportation Routes
Shopping and Retail Facilities
Know Where Tenants Want To Rent
Another important factor to consider when purchasing an investment property with the potential for profitability, it's important to know where your tenants want to rent. As we've mentioned, location is an important factor for tenants. If the property is in a location that has accessibility to local infrastructure, the more desirable it is for them to want to rent from you. Properties that offer safety and security are also desirable to tenants. It's also important to offer tenants a property that has low maintenance. These factors are likely to earn you a passive income as an investor as tenants will actually want to fill your property.
At REIF we are constantly working with investors to find properties that will allow them to make a profit. We consider all factors that will contribute to earning you a passive income as a real estate investor. If you would like to begin your investing journey or expand your property portfolio, we would love to be able to assist you.
Ph: 1300 130 932