When you buy an Investment Property, you become a Property Manager whether you like it or not.
Many investors don’t even think about this when they are in the market and can get a shock when they realize, that it requires a fair bit of responsibility.
So as a Self Managed owner, what questions should you ask when you are in the market?
- Why are you buying this property?
Do you want a capital gain or a lower risk investment with longer term returns? Perhaps your strategy is for positive gearing so you don’t have to keep digging into your own pockets?
- What do you need to consider?
What sort of tenants do you want in your property and what sort of issues, are likely to occur as a result? Look at the demographics of the area and if your desired tenants are attracted to that area. Also consider if your desired buyers would also look at that area as well.
- Location and type of property?
A good area attracts higher quality tenants and buying a house is often a better investment than an apartment/unit etc. If you are going to buy a unit, look for a unit that is on a block, of less than 8 properties, and if it’s detached- even better. 3 or 4 bedrooms is ideal, any more than that and you will attract more wear and tear due to more people, being in the house.
- What about other considerations?
Do some research and find out if you are close to a train line and shops, schools etc. Has it got a good view? Some tenants will pay more for a property with a view. Does it have a swimming pool? Not many tenants want a pool because of the amount of upkeep.
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