Buying an investment property can be a good move financially, but of course, it’s not just a matter of purchasing any property and hoping for the best.
There’s a whole range of factors that affect whether or not an investment will be successful, so keeping them top of mind when searching for an investment property can help you make the right choice. Here are 5 things to look out for.
An in-demand location
Where do people want to live in this area and why? That’s where you should be trying to invest, because it’s where there’s typically steady rental demand. Being close to public transport and good roads is a big drawcard for renters, especially in the Hunter Valley. Many of us take advantage of the M15 Hunter Expressway and areas with train stations or transport hubs like Singleton and Maitland to commute to Newcastle and surrounds for work.
Renters are also attracted to areas like Singleton as they offer jobs – with the army base, mines and other local employers.
The promise of a good lifestyle also attracts all types of renters, which is a real strength of investment properties in our smaller communities – residents can enjoy the quieter lifestyle while still benefiting from the proximity to jobs and other cities and towns.
Government or private investment in infrastructure projects often indicates a potential growth area, which can lead to higher demand as people want to benefit from easier commuting, improved facilities and good jobs. The Hunter Valley and surrounds is a prime spot for this investment now, with a $470 million infrastructure proposal currently on the table with the NSW Department of Planning.
Even without this development, the Hunter region is known as NSW’s biggest regional economy, with mining leading the way for the area’s infrastructure. The Hunter Valley is also benefits greatly from tourism.
The right investment strategy – capital growth or rental returns
The definition of a perfect investment property changes based on your financial situation. For some buyers, an area with high capital growth is a better choice, but for others, higher rental return will be preferable. This guides where you buy, as well as potentially influencing the type of property you choose to invest in.
According to data from realestateinvestar.com.au, both capital growth and rental yield are strong in our area, but there are some areas that are a bit better than others. For example, Singleton has experienced the best capital growth in recent years, increasing 8.17% over 2 years, while Branxton is a little stronger on yield, with a median of 4.65%. If you’re unsure, your real estate agent can help you find the right place that meets your needs.
In the Hunter, we’re lucky to be in the very heart of one of Australia’s best wine regions, which adds an extra element of desirability to an investment property. It doesn’t just provide a lovely environment for tenants to live, but is also a major drawcard for those moving up from Sydney or Newcastle, dreaming of a treechange, and hosting family and friends.
There are also plenty of opportunities here for short-term rentals that can be lucrative in busier tourism periods, so it’s a great place to buy if that’s your preferred strategy.
Property aesthetics and features
Forget what you’ve heard – real estate isn’t just about location, even though it is important. A property with the best set-up will be in-demand with renters, so swimming pools, air-conditioning, modern kitchens and bathrooms, well-kept gardens and even just a logical layout can all be factors that influence whether a tenant will apply. Focus on a property that has broad appeal, instead of buying something that suits your specific taste.
It also pays to consider your target market – if you’re focussing on families, a property with a double garage and a large yard might be the best move.
No matter whether you’re choosing a 1 bedroom flat in town, or a rural acreage, ensure you do your homework when investing in property as it should always be head over heart.
Whatever your property needs, our team is here to help. Get in touch with us now.