It can be hard to start investing in property. Especially on your own with little guidance. Investing in real estate property needs money, knowledge, and the ability to make some tough decisions. Before you buy any investment properties you should seek the services of qualified property valuers in Sydney. They will find out the true market value of a property, calculate the amount of rent you could be charging and help determine whether a property is a good investment.
If you want to be successful in investing in rentals, a good investment property must:
- Generates positive cash flow – If you are looking into a commercial property or residential unit that is already being used as a rental, then there will be some record of the income it generates. If there is a consistent record of positive cash flow, then it would seem like a no-brainer. Try to find out first why a landlord would be selling off a profitable property. There could be some hidden issues or other considerations you need to take into account.
For properties that were previously private residences, you should consult with property professionals such as a real estate valuer to help determine the potential cash flow. - Follow the One Percent Rule – If the property’s rental income is one per cent or more than the actual market value, then it is considered a good rental yield in Sydney. Less than that and the purchase should not be considered. Most investors do not use this written rule, but real estate agents follow this rule religiously.
- Be in a Nice Location – As we all know, when it comes to buying property for any reason, it is all about LOCATION. Rental properties are no different. It is a significant factor in an investment property’s success and is what determines a person’s interest in moving in.
For an area to attract tenants it must have plenty of established infrastructure, work opportunities and of course be reasonably priced. Fully examine the area you are looking to buy property in and see if there are enough amenities for any sort of tenant. To make this assessment easier, order a property valuation. Their report will include these details and will also consider any future developments. - Have a Low Vacancy Rate – Looking into the vacancy rate of a suburb before you invest in a property is vital. You would want to set up a rental in an area that has a low vacancy rate. That means that there are not a lot of rental properties on the market. A high vacancy rate means that your rental could linger on the market for a long period of time. For investors, the ideal vacancy rate is 3% or lower, as it means that there is more demand than available rentals and so landlords have more tenants to choose from and could price their rents at a higher rate.
- Is Low Maintenance – A low-maintenance property is easy to keep in good condition and can be cleaned easily between tenants. An easy-to-maintain rental means less time and money spent on the property, leading to a better return. The fewer expenses the better in the long run. Some appliances, finishings, paint, flooring etc. can be the more affordable option when setting up but could be more costly due to constant replacements or repairs. Choose your investment and materials carefully.
For assistance in finding a potential investment property or for help in determining what is a good rental yield in Sydney, consider using property valuation services. A valuation report could a valuable resource you can depend on to start your investment journey.