How do you know an investment property is right?

Sydney real estate can be an outstanding investment, but you need to act strategically and be well-informed before you make a decision, so you can get it right and leverage your purchase to build wealth.

Before you take the plunge, the first step is to determine if a property is a good investment.

Always look at your budget first

Of course, finding a property that suits your budget is the first step to getting it right when you invest in Sydney real estate. As obvious as it seems, many first-time investors push their budgets to the limit. As a result, they end up with an unbalanced cash flow.

Consult your financial advisor so you can understand what you can afford to spend and which hidden costs might leap out to bite you. If you think when you buy an $800,000 home that $800,000 is all you will need to spend, you are dead wrong. The cost of making a purchase includes legal fees, transfer fees and stamp duty, plus any number of other expenses that pop up along the way.

A smart investment plan will take these costs into account, as well as the expected return and the possible upkeep and maintenance costs of the property in the long run.

You can see why it’s best to speak to your financial adviser before you begin. There are big sums involved and you need to be careful to ensure you are spending what you can afford and that it will reward you in the long term.

Location is everything

Once you know what you can spend, you need to think about where to buy. It may sound old hat, but ‘location, location, location’ is the real estate mantra for a good reason.

Consider the type of property and the area you are buying in. Sydney real estate presents a huge array of suburbs and areas to buy but not all present the same value for money, rental yield or odds of finding good tenants.

Ensure the property ticks all the boxes

You’ve talked to your financial advisors, and thought about location; the next job is to write down a checklist of all the features you want your property to have. For example:

– Number of bathrooms
– Number of bedrooms
– Parking spaces
– Access to amenities (parks, schools, shops, etc.)
– Access to public transport
– Swimming pool
– Air conditioning
– Security

With this being said, finding a property that ticks every box is a rarity. Be prepared to make a compromise or two along the way.

If you are buying in or around Neutral Bay, you will definitely want to contact Home Property Agents. Our comprehensive knowledge of the local area will help you tick as many boxes as you can and find a property that will always attract great tenants.

What is the long term plan?

When you have a property that ticks all the boxes, the last step is to check how it fits into your long-term plans. These plans might be more than financial, too.

– Do you plan to upgrade the property?
– How much time do you have to commit to your new property?
– Do you plan to self-manage (difficult or time-consuming) or hire a property manager (highly recommended) to take care of the place for you?
– When do you hope to sell?
– Will you ever want to live in it yourself, perhaps to downsize?

With a solid idea of how your Sydney real estate investment suits your future plans and the factors above met, you will be set for better success in the property investment game.

Looking for an investment property? Talk to us!

Want to find the ideal investment property for you? Contact HPA for the advice of an experienced specialist and the support of a leading property manager in Neutral Bay.