How to find the best owner-occupied or investment property
Updated: Jul 19, 2022
A simple guide with our biggest considerations to help you purchase the best investment property or owner-occupied home.
There are numerous considerations to think about when buying a house. Depending on whether you’re looking at buying an investment property or buying a house to live in; you need to think about how it’ll benefit you.
No matter the reason that you’re looking to buy, it’s important to note that considerations when buying property tend to differ. That’s why we’ve created a guide for finding the best investment and owner-occupied properties.
Buying an investment property
Below, we've listed some of the major considerations of buying the best investment property.
Cash-flow potential and rental yield
Is your goal to generate high cash-flow? If so, you should consider whether your potential investment property offers a high rental yield. Most investors who have a goal to generate high cash-flow buy properties with a rental yield of above 5.5%.
If a property increases in value from when you purchased it, we call that capital-growth. Many investors buy investment properties with capital-growth potential. This can fast-track their equity position, allowing them to grow their investment portfolio quicker. Additionally, it’s a great way to receive great investment returns when selling.
Furthermore, you might consider purchasing rental properties with an inflation hedge. Such properties protect buyers in unpredictable markets where property prices have the potential to fall.
Possible tax benefits
Another consideration of finding the best property is to look for rental properties that offer greater tax benefits. Moreover, properties that allow you to claim depreciation costs. Tax depreciation covers the general wear and tear of your investment property over time.
For newer investment properties, established after 1987, you can claim deductions at a rate of 2.5 per cent per year for up to 40 years. From a long-term holding perspective, you might benefit from investing in newer rental properties. This is because you have more time to claim this expense.
For more information regarding the types of tax benefits you can claim on your investment property, click this link to see one of our other articles.
How long you intend to hold onto an investment property will be imperative in forming your investment strategy. There are plenty of gains to be made as a property investor (from a long-term perspective). Therefore, you should consider how purchasing one could benefit you in the long-term.
At REIF, we’re firm believers in how much time you spend in the market versus timing when to get into it. There’s no greater time than the present to get your foot in then sit back and watch it generate long-term gains.
The type of property
When looking for the right rental properties you need to think about what type of investment property you want to buy. Because this consideration is made up of many factors, we’ve listed a few of them below:
Do you want to buy a residential or commercial investment?
If residential; do you want a unit, single house and land, dual living, or townhouse?
Where do you want to buy? Does the property come with locational benefits? Surrounding amenities?
Is it new or established?
How old is the property and what benefits come with both?
Will it be easy to manage?
Buying a house to live in
Buying a house to live in, also known as buying an owner-occupied property, comes with its own set of considerations.
It could be that you’re a first home buyer or simply looking for a home to settle in for a set period. Therefore, when finding the best home to live in, you may want to think about these considerations.
Think about how much space your property offers and how much you require. Additionally, if you’re a single family or multi-family looking for a home that offers extra space.
Single-family homes are those that sit on a dedicated lot with no shared walls and offer private yard spaces.
Multi-family homes are designed around accommodating multiple households under the one shared dwelling (i.e., duplexes). These are suitable for buyers looking to accommodate several generations.
When buying the best owner-occupied home, you might look at the number of rooms it comes with and if extra space will be suitable for you.
You may also want to buy a home that benefit you with the following specification considerations:
The number of bedrooms, bathrooms, living spaces, garage spaces, and more
Laundry, bathroom, and kitchen features
Heating and cooling systems
Kitchen appliances and features (i.e., electric or gas stoves, ovens, island benches, storage, etc.)
Do you want to live in proximity to the city, beach, or do you want to live in a rural location?
It’s important to think about the locational lifestyle that your property will offer.
Other locational factors that may be influential in your decision to buy are:
Is it in proximity to employment nodes?
Is there retail, educational, medical, recreational, and transportation offerings close by? Does that matter for the lifestyle you desire?
Future investment potential
When buying an owner-occupied house to live in, whether you’re a first home buyer or not, it’s important to think about the time that you intend to live in the property. If you don’t think you’ll live in it forever, you might want to consider purchasing for future investment potential.
At REIF, we support a range of first home buyers who buy to simply get into the market. Hence, they live in the house for a short term so that they can make it a future investment.
Getting the right support when investing or buying a home to live in
When identifying the best property for you (whether you’re buying an investment property or owner-occupied home) you should always get the right support.
Real Estate Investment Finance are made up of a qualified team of Property and Finance Specialists who can give you advice and present a range of options, suitable to your needs. Additionally, we’re affiliated with the finest team of network partners across the legal, accounting, and financial planning space.
To learn more about the property services that we provide, we’re here to help guide you in the right direction. Please feel free to start a conversation via the details that we’ve provided below.
Ph: 1300 130 932
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