7 Key Factors to Consider When Investing in a Property for Maximum ROI

There are many key considerations to make when looking for investment properties, especially on Brisbane’s north side.

1. The first thing to think about is the location. High-quality properties in desirable locations, such as those close to schools and public transport, are more likely to increase in value and attract tenants. It may also be beneficial to search for properties in areas experiencing growth and development as these areas are more likely to see an increase in property value over time.  Fortunately, suburbs like McDowall, Everton Park and Stafford have great schools and good public transport options.

2. The condition of the property is another important aspect. Good quality properties are more likely to be rented and attract great tenants. Properties that need extensive repairs or renovations can be more expensive in the long term, impacting your profits.  If you are looking to buy with an aim of renovating to generate a higher rental return, this is a good strategy and the older suburbs of West Chermside and Stafford have plenty of properties ideally suited for this purpose.

3. The property’s cash flow potential is another important consideration. Positive cash flow is a property that generates more than its expenses. This can be a steady source for income and offset the cost of the property.  Not all properties will be positive cash flow, especially as prices have risen over the last couple of years.  If you are not covering your costs then you may be entitled to a tax deduction, known as negative gearing, which may even put money back in your pocket.

4. Fourth, you should also consider the local rental market. You can get an idea of the rental income and occupancy rates by researching average rental prices, vacancy rates, and demand in your area. Understanding the laws and regulations surrounding rental properties can also help you to navigate the rental process and avoid any potential legal problems.  David Watt from Hicks Real Estate can advise you about what is a good potential rental property and what isn’t.  Call him on 0468 633 493 to help select your next Investment Property.

5. The property’s potential to appreciate is also important. Even if cash flow is not positive at first, properties that are likely to increase in value over time will provide a good return. It is important to remember that no one can predict how much a property will appreciate in value over time. Before you decide to invest, make sure to do your research and analyze the market.  Capital growth is the main aim for an investor, a property could double in value or more over say a 10-year period, making the initial purchase price seem ridiculously cheap.

6. Sixth, consider the tax benefits of the property. You may be eligible to receive certain tax deductions for investment properties, such as mortgage interest or depreciation. This can offset the cost of the property. A tax professional can help you understand tax implications when investing in property.

7. Seventh, you should also consider your financial situation. It is crucial to ensure that you have sufficient funds to pay for the property’s costs, including the mortgage payment and rates. It is also essential to have an emergency fund in place for unexpected expenses.

Although property investing can be a great way of building wealth over time, it is important to consider the factors o do your research to determine the impact of all factors on your investment’s profitability. You can make informed decisions and get a better return on your investment by considering the location, condition and cash flow potential.

The team at Hicks Real Estate are here to help you.  Give them a call!