Property investment can be a great way of increasing your personal wealth and securing your financial future. However, there’s often a common misconception that it always delivers positive results in the form of a great return. This is certainly true in a lot of cases, it is by no means guaranteed. Property investment, like any other form of investing, needs to be done properly in order to give yourself the best shot of maximising your return.
If you’re thinking of taking the plunge in property subdivision and building an or investment property, make sure you check out these 5 tips that can help you make sure that it’s a success.
The Right Property At The Right Price
This is the most fundamental part of any property investment. Get it wrong and you’re never going to make money no matter what you do. Do your research and bide your time until you can buy or build a property at or below current market value. If you pay over the odds then it doesn’t matter how great the property or location is, you’re going to struggle to make money on it.
Manage Your Cash Flow
Do your sums and make sure you can manage your mortgage repayments over the long term. Is the rent going to be enough to ensure you maintain a positive cash flow? Have you contacted an accountant and factored in uses like stamp duty, capital gains tax and land tax? Getting it wrong could mean you end up losing your investment property.
Find A Good Property Manager
Effective investing is all about managing your time properly. Unless you’re willing and able to putting in all the time, effort and attention that’s required to find and keep good tenants, finding a good property manager is a great way of ensuring the long-term viability of your investment while also allowing you to pursue other opportunities.
Understand The Market & Dynamics Of Your Chosen Area
Get to know the area where you’re investing like the back of your hand. Speak to as many neighbours, real estate agents and other residents as you can and find out everything possible. If you buy in an undesirable location or one where values are decreasing then you’ll find that your return will probably be less than you hoped for.
Make The Property Attractive To Renters
Making the property as attractive as possible will increase the amount of rental income it generates. Whether it’s performing any necessary renovations after purchase or simply ensuring that the property is properly maintained, the increased cash flow of higher rents can be a huge factor in determining the overall success of your property investment.