Online Calculator | Why It’s A Good Time To Buy An Invertment Property

Why It’s A Good Time To Buy An Invertment Property

Property News

Property Point Dexter – good time to buy

Good time to buy as capital city rental markets set to become pricier

Property Point Dexter confirmed that with rental growth increases minimal in recent times, there are signs to indicate that the current conditions are now ripe for rental growth to start returning to the market.  Dexter says that at RP Data we expect that upon lease expiry, landlords will ‘wise-up’ to the cheaper rents being charged to tenants and will look to increase rental rates – the catalyst for this will be when vacancy rates tighten and it becomes increasingly difficult for renters to move into home ownership.

Dexter’s advice for those looking to purchase a first–time investment property is to ‘be aware’ because there are often a couple of unexpected pitfalls that may just pop up.

It’s important to remember that when purchasing a property for rent, the rental return is key – especially considering price growth is likely to be quite flat, the rental return is typically expressed as a yield.  The yield is expressed as a percentage and is simply calculated by taking the annual rent and dividing by the purchase price, the yield then provides the indicative annual return from the property.  Typically, investors look for as high a yield as possible however, with recent strong growth in property values and negligible rental growth; many yields are not particularly attractive.  Given this, you need to be banking on rental growth.

Owning an investment property is all about location and extracting some sort of future return (price growth or rental return).  Given this, location is just as important, if not more so than it is with your principal place of residence.If you own an investment property in a location where no one wants to rent, then you will be making a loss.

Dexter agrees that the best locations are typically inner city unit markets or outer more affordable housing markets located close to working nodes; yields in these areas tend to be much more attractive.  When seeking a rental return it’s important to avoid regions which are over supplied, as well as those that are particularly expensive and not situated close to some level of amenity like shops or medical facilities.

In closing, Property Point Dexter advises investors to stick to these fundamentals and by doing so, your investment should achieve a superior rental yield and a greater return to you as a property investor.

Keep informed with real estate sales history at the myrp.com.au web site. Here you can search for recent home sales information and order property reports specific to the suburb areas you are interested in.

Filed Under Online Calculator | Leave a Comment

Tagged With , , ,

Comments

Leave a Reply