What to look out for in an investment property

Have you decided to invest in a property, but aren’t quite sure how to find the right one that will give you the best return on investment? Don’t worry, all first time property investors have been there. Finding the right property is one of the most important aspects of property investment. There are a few different options when it comes to investment properties. You can either find a new build in a growing location, renovate an older home, or invest in a property that is already established.

Here’s a few things you should look out for when hunting for your ideal investment property.

Location

One of the most crucial things to consider is the property’s location. Houses that are well-situated in terms of their proximity to schools, amenities, and public transport are likely to be more desirable for potential tenants. Its’ closeness to these factors gives you the ability to command a higher rent price.

Properties in locations that are going through development or are expected to experience growth have the potential to have a higher increase in value, compared to areas that are already popular.

The Summit Homes properties are built in locations such as Pokeno and Te Kauwhata that have been expanding immensely over the past few years, and are expected to continue growing.

However, no matter the location, any investment you make will have some degree of risk. So it entirely depends on your risk appetite on whether you’d like to purchase a property in an area that is already established, a new build, or one in a location that is expected to experience development and growth.

Demographics

Before you make decisions about your property investment, you should think deeply about the demographics of the area you have chosen. Think about the location, and the types of people that are likely to be living in that particular area. This is to help give you an idea on whether the property is suitable for the type of tenants in the area. For example, if the location is near the city, there may be a great deal of young professionals who work in the city living in this area. They may be after low-maintenance properties that are ideal for their work-life situation.

Thinking about these sorts of things will prepare you for when it’s finally time to find tenants.

The condition of the property

Depending on whether you’d like to fix up an investment property, or purchase one that is ready to be rented - the condition of the property is something you should seriously consider before securing your investment. While there is the potential for more capital gains when taking on a renovation project, you’ll need to ensure that the money you put in to the property in terms of costs and efforts will pay out.

You’ll need to be realistic about your timeline and goals if considering a fixer-upper. Take into consideration the time it will take to complete the renovations of the house, the absence of tenants and rent income in the meantime, and the costs to figure out whether the property would be a good investment for you.

Investing in a new build

Many modern investors are drawn to new builds for their investment property. These are newly built properties that are often in areas that are experiencing development and expansion. Properties that are built in such locations have a higher potential of increasing in value, making them ideal investment properties.

Our Summit Homes properties are in the growing towns of Pokeno and Te Kauwhata, which are great for home buyers wanting a city-country life balance, and property investors looking for ideal investments.

If you’re a first-time property investor and would like to learn more on the subject, join us at our upcoming events in Auckland on the 23rd of February and Hamilton on the 2nd of March.

We can help guide you through the whole process and answer any questions you may have on equity, loans, tax benefits and the like.

We’ll also have several building and finance experts available during the event so you can learn everything there is to know about setting up your first investment property!

For more information about the event and more, give us a buzz.

Back...