How to save time and money when buying an investment property
Even for seasoned investors, selecting an investment property can be time-consuming. Hours spent whittling down shortlists, attending viewings and talking to agents can quickly clock up, and the cost of purchasing and reviewing pest and building reports for properties you don’t end up buying can drain the wallet more than you’d like.
However, there are a few strategies to help you improve your approach and find your perfect property faster.
Know your goal
It’s important to know what you want to achieve with your property investment. Are you purchasing on the basis of capital growth, with the aim of selling the property for a profit? Or are you looking for a property that will be cashflow positive today, putting money in your pocket right now? Figuring this out up front will help you cut out sections of the market that don’t deliver on the outcome you’re trying to achieve.
Get someone else to do your research
Buying a property on a whim is not a wise move, and this is especially so for investment properties. Due diligence must be undertaken to ensure the property meets your investment goals (see above). However, there are ways around the extensive research, analysis and comparisons required when making an investment decision. Serviced apartment property companies, for example, have teams of researchers on the task of finding properties that will deliver on the serviced apartment business model. Serviced apartments are found in locations with strong economic support and business and infrastructure development, with a strong demand from the business travellers (the predominant serviced apartment customer). Serviced apartment investors enjoy the additional peace of mind that their property is part of an overall business model that is quite separate from the demands and fluctuations of the residential market.
Simplify the process
There are some residential property investment issues that are simply unavoidable. Dealing with agents, finding and keeping good tenants, approving maintenance costs, and losing income during vacancies are common complaints. However, serviced apartments offer investors a more streamlined process. Long-term leases in five-year terms mean there is no longer the worry about vacancies. Plus, your rent is paid regardless of whether or not there is someone staying there, so you can rely on that monthly rent. For investors, it’s a more ‘hands-free’ strategy.
Built-in rent increases
Being able to accurately estimate your income for an investment property has a huge impact on deciding whether it is a profitable, or even affordable, option. For each year of the five year terms, your rent will increase (anywhere from a CPI increase to 4% per annum). In residential markets, landlords are often hesitant to raise the rent on good tenants, ultimately meaning that over the long term you lose money as you’re not achieving market rent at the cost of keeping your good tenant in place.
Purchasing an investment property is a big decision, and care and caution should still be taken. But with these few tricks up your sleeve, you’ll be reaping the benefits of your investment faster.
If you want to know more about serviced apartments, Quest Properties is the place to go. Specializing in the sale of Quest Serviced Apartments who are the market leaders in Australia, Quest has over 150 serviced apartment complexes across Australia and New Zealand, with more than 5,000 apartments under management for investors, making it the largest supplier of serviced apartments in the region.