Do your homework and think about the renters when buying an investment property, reports
THE worst house on the best street is often viewed as real estate gold but experts say the adage is not necessarily the best advice when buying an investment property. Newer homes are largely recommended when it comes to a property that will offer investors the best chance of securing good tenants as well as maximising the tax benefits.
The Investors Club chief executive officer and founder Kevin Young says failing to do your homework on properties can be costly.
‘‘The most common setbacks for investors are a high cost of repairs and extended vacancies,’’ he says.
‘‘Both are problems that stem from a bad property choice, costing you money and your confidence, too.’’
Mr Young says budding property investors need to be shrewd.
‘‘It’s important for investors to be savvy in their purchase, looking outside their own areas and in markets across the country for areas forecast for strong growth,’’ he says.
‘‘Investors need to have a business mind and look for features attractive for a tenant, not for themselves. Buying on emotion is one of the biggest mistakes investors make.’’
Brock Harcourts Adelaide Metro Property Management managing director Adam Blight says buying new is usually the way to go.
‘‘A low-maintenance and a tidy place is pretty vital,’’ he says.
‘‘It needs to be something that will be attractive to the sort of tenants you want. New houses also have better tax benefits.’’
Mr Blight says a unit also may prove a better option than a house.
‘‘There is demand for both but with units you will generally get a better yield because you are not paying for the land,’’ he says.
Mr Blight says, like any property purchase, location is a key.
‘‘You want it to be close to all the amenities: public transport, schools, shops, reserves. Closer to the city is obviously an advantage as well,’’ Mr Blight says.
Terri Scheer Insurance manager Carolyn Majda says the less maintenance, the better.
‘‘A property that requires as little maintenance as possible will make life much easier for both tenants and landlords as it will minimise the effort and cost involved in the upkeep of the home,’’ she says.
‘‘If you do have a garden, ensure it is safe, landscaped and as lowmaintenance as possible.’’
Liam Kurkpatrick bought a unit at Gilberton as an investment property about seven years ago.
He says buying in a desirable location has proved a winning choice.
‘‘I’ve only had two different tenants in the seven years,’’ he says. ‘‘It’s a great location and the return is good.’’