Investment property checklist

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We are all told that purchasing your home is the biggest financial decision you will ever make. Well that may be the case for most Australians. However for those 20% of us who invest, or those who are considering investing in property for the first time, it really is the NEXT biggest financial decision to make.

Investment considerations at any time are both exciting and scary. So to ensure you are on the right path a successful property investment experience, please use our checklist to avoid making any major mistakes along the way.

  • Take a look at a map of the region you are
    considering, identify the local CBD and draw
    a circle 15 kms around the central point. Start
    looking for your property within the circle.
  • Research, research, research! Review data
    showing median sale prices and rental yields on
    comparable properties.
  • To ensure affordability stay within the second
    and third quartile of prices in the suburb for
    price and rent.
  • Is the property within close proximity to
    schools, shopping centres, university or
    business hubs that are well established and
    likely to appeal to good quality tenants?
  • Does the area have an established public
    transport network and is it close to the main
    arterial road network?
  • Check the local government website for
    developments planned for the suburb/region,
    eg high density dwellings.
  • What is the land size? Is there potential for
    subdivision (or to increase the size of the
    existing dwelling) at a later stage to increase the
    marketability?
  • The newer the property the better the
    depreciation benefits.
  • If an older property, does it lend itself to a cheap
    make over?
  • Unit – best features: minimum two bedrooms,
    built in robes, bathroom + ensuite, internal
    laundry and lockup garage.
  • House – best features: minimum three
    bedrooms, built in robes, two bathrooms,
    lockup garage (parking for two), extra storage,
    low maintenance fully fenced yard.
  • Is there a current tenant and if so are they
    paying market rent?
  • Invest time to find a quality property manager.

These strategies are great guidelines, however your number 1 action is to speak to your finance specialist to help you identify:

  1. How much you can borrow for your investment property
  2. How you will fund your deposit
  3. How your finances will be structured for your longer term future
  4. Your long, medium or short term holding expectations
  5. The costs involved in holding property
  6. The tax advantages of investment property
  7. The pros and cons of positive and negative gearing and what may suit your circumstances best
  8. Recommended insurances to minimise risk (speak with our financial planning expert if you don’t already have one)
  9. Your exit strategy

THEN

We recommend you have LOAN PRE-APPROVAL
in place before you go shopping.

(“Ultimately we’re seeing that Australians still hold faith in the long term investment benefits of property. Property is a great opportunity to build wealth, but it definitely pays to do your research, take your time, speak to the experts such as a mortgage broker or buyers’ agent, and focus on the financials of the investment rather than the emotions of a purchase.”)

Mark Woolnough, head of third party distribution, for ING Direct 2016