What makes a good investment property?
Many factors make a
good investment property. Today, let’s focus on six main areas.
1. Property that wouldappeal to owner-occupiers.This limits potential
oversupply of rentals comparedwith other areas where most of the
residents are renters.
2. Property purchased below
intrinsic value.According to the BIS research, resales of apartments within
a three to five kilometre of centralSydney,Melbourneand
Brisbane haverealised consistently lower pricesthan established
apartment resales. Off-the-plan apartments often resell for below purchase
3. Property with ahigh
land-to-asset ratio.That doesn’t necessarily mean a large block of land, but one
where the land component makes up a significant part of the asset value.
4. Property in an area that has
a long history of strong capital growthand that willcontinue to outperform the
averagesbecause of the demographics in the area including gentrifying
5. Property that has
something unique or special, different or scarce about the property.
6. Property where you
canmanufacture capital growththrough refurbishment, renovations or
redevelopment rather than waiting for the market to do the heavy lifting. A
common example is adding a bedroom to the property, which can add more equity
and rental cash flow.
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Tuesday, 8 December 2020