Having enough money to consider investment property is always an exciting project to tackle. There are so many pitfalls however because if you do not understand the property market a little, then you could plow your money into a white elephant so to speak. In this regards, let us give you some simple guidelines in choosing a dwelling:
If you should require some extra financing, then most banks or other lending institutions will most likely give you 65% of the value of the home. The reason is that they view investment property as a risk to themselves because you are not going to live in it yourself.
Where you buy is going to be of paramount importance to your investment. You do not want something that is so far that someone will have to commute for hours just to get into town. Your purchase will more than likely be empty because tenants usually want to be centrally located. So ensure that where you buy has shopping centers, public transport, schools and other social amenities close by. This way you could charge a higher rent and make some profit as well.
Maintenance could be a problem if you buy an old home, so generally if you do not want to be bothered with repairs and such, then it is best to invest in a high-rise apartment block. They are virtually hands-free from maintenance and are usually looked after by the body corporate.
However, you could charge a higher rent if you purchase a townhouse. Granted there could be a bit more maintenance such as the upkeep of a garden each month and shoveling snow each year for your tenants. If you are handy around a house, then it should not be a problem. The same goes for a freehold house as well. The rent can be substantially higher, but the maintenance will also be more because of various factors like leaking roofs and such.
If you are a DIY enthusiast then you could also think about a freehold house. Should something go wrong, then you could repair it and you could do the routine maintenance without spending too much money on labor costs and such. You get a better control over your property compared to a condominium for example.
When it comes to increase in value, then there will be different rates for each. For example, you might find that a condominium will appreciate by 10% a year whereas a townhouse will increase as much as 14%. A freehold house will give you a higher appreciation and can be anything from 15% and higher.
Your real estate agent can advise you which area you need to look at, because this will be paramount to a successful purchase. Tenants do not want to travel miles to work each day and do not want to spend hours in traffic. Try to source your investment property which is located centrally.
If you are considering investing in property, reviewing the NABERS rating can assist you in making the most efficient use of your utility budget. The NABERS accreditation rates and ranks energy utilization.