How to find a profitable investment property
Updated: May 27, 2022
When buying an investment property you may want to buy one that's profitable. Real Estate Investment Finance have a team of specialists who are dedicated to researching market trends and properties that can offer this.
Keep reading to understand the factors that we consider when finding a profitable investment property.
Areas with high supply and demand
Real estate investors generally see a profitable return from their property when they buy in areas that are in demand. The higher the demand is for a location correlates to a decrease in supply. Furthermore, increasing the value of a property. This means that more people are wanting to live in that particular region. As a real estate investor you can generate higher rental yields, furthermore a greater returns on investment.
At REIF, we're believe in the potential of new investment properties. We like to help real estate investors strategise returns from a long-term perspective. In the video below our CEO and Founder, David Chehade, gives four reasons as to why new properties are, generally, more profitable:
Maximise depreciation - when investing in new properties, you can 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 better tenant 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.
Longer warranty and maintenance periods - when buying an investment property, 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're 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 capital growth potential
When buying 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 are heading
Another important factor to consider when purchasing an investment property is knowing 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.
For more information
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