What makes a good investment property?

10 February 2022, 5:57 am

What makes a good investment property?

The best way to view purchasing an investment property is as a business activity. Unfortunately, a lot of people let emotion get in the way when they are selecting an investment property. They often treat it like buying their own home. 

This isn’t the way to approach it.

A good investment property should have the following qualities:

  • The house itself must be good quality, well-built.
  • It should appeal to long term, stable renters such as working families.
  • It should be priced to be affordable to your ideal tenant, and yourself.
  • Whilst bringing in rental income, it should give tax benefits.
  • It should be increasing in value over time for potential resale in the future.

Finwell scours the markets to locate properties that check all these boxes.

Brand-new vs old? 

One of the hidden costs of investing in property can be the ongoing maintenance or repairs required, particularly when buying old properties. This is why we advocate purchasing new properties, in developing areas. Another benefit of buying new properties is reduced stamp duty costs, along with taxation benefits that improve cash flow.

The ideal home?

The ideal home is a 4-bedroom home with a double garage, as this has a broad appeal not only to people wanting to rent the property but should you wish to on-sell it in the future, the number of families that will find it suitable and can afford to buy your property is greatly increased.

The best location?

The reason we choose growth areas or the fringe areas of major cities in Australia, is because this is where the majority of people can afford to purchase an investment and get into the market. These areas are also affordable to renters. Australia was built on migration and continues to welcome people who are pleased to find they can achieve the dream of living in a beautiful home with a back yard in a family-friendly neighbourhood.

These developing areas around major cities will have continued infrastructure investment such as schools, shopping complexes, sporting complexes, and public transport that will be continually added to over time. Tenants find it appealing to live in a brand-new home with facilities and infrastructure like this.

The benefit to the investor is this is where the value of the property increases because the amenity is much more appealing. As the population of the developing area continues to increase, the average family household income will increase as well. This is the key driver for properties to continue to increase in value.

We could continue naming out important factors. But our point is that there is a lot more that goes into the choice than just the initial purchase cost. 

Reach out to organise a no-obligation meeting with a Finwell Group team member. We’d love to have a chat and answer these questions for you.

And that is what makes a good investment property.

Call us on (03) 9017 3235 or email better@finwellgroup.com.au