There has been strong, steady growth in the property market over time. However, not all properties always deliver positive returns! While it’s true most of the time it certainly isn’t an instant road to riches.
Our experience tells us that, if we keep to the rules of property investment, success is much more likely.
So, to help you buy well, we say that the property must be:
- New, or at least recently renovated, to maximise depreciation/tax return and gross rental returns.
- In a small or multi-staged development. Preferably under 50 dwellings. Don’t rule out large properties, they must have have substantial points of difference e.g. well-proportioned and well-appointed apartments with quality facilities and finishes and good access.
- In a location with potential for above average mid-to-long term capital growth; with excellent existing amenity and a great “walk-score”.
- In an area where the economic factors stack up i.e. consider rental demand, household income, average number of occupants per dwelling, average age and occupations.
- Close proximity to schools, transport, public facilities, shopping and lifestyle. Close proximity to public transport, especially rail, can be strong factor.
- Delivered by a proven development team.
- High quality in terms of design; materials and construction. It must require minimum maintenance.
- End prices under $600,000; better still, less than $500,000; and they must yield more than a 5% gross rental return.
- Limited new dwelling supply when compared to underlying demand.
- Sold with independent API registered valuation support, and within an acceptable range of sales/marketing commission.
There are no short-cuts and no guarantees, but, in our experience, if you follow the rules and apply some effort to research, you will be able to create a sizeable nest egg from a modest deposit.