Buying property to rent can be a great way to make a profit, but make sure you take the right approach to your investment strategy.
Good research and knowledge of the local area in which you would like to invest will help you to determine whether or not you can be successful there.
What have local units been selling for? What is the average income in the area? Does the location cater to families or single person households? What are the median prices for housing and are the vacancy rates low while showing good rental returns? Researching development plans and learning more about the local economy will help you to see the potential or drawbacks in rental real estate.
Calculate rental yield
Rosy projections and talks of a market upswing are just a small piece in the property puzzle. What matters is the numbers the cold, hard facts of any investment.
To get the answers you need about a certain property, you must calculate the rental yield. This will help you gain an accurate indication of the rental income you would receive over a year, minus expenses associated with owning the property.
It can also help you to estimate the rate of return (ROI) before tax. You can vary the numbers based on different scenarios to get a comprehensive view of potential outcomes.
Seek professional advice
If you don’t have the time to do the research, are unfamiliar with the local market or would simply feel better knowing you obtained expert advice, talk to someone who specialises in renting and managing property in Australia’s metropolitan areas.
The experienced acquisitions and management specialist at Portfolio can help you to develop your own personal strategy, backed by 40 years of their own experience.
Call us today on 03 9621 1044 or go to Contact us to find out more.