Property investing is a process, not an event. When searching for a property your emotions must be left off the table. Your decisions should be made through a number of established, set criteria. Some tips that may assist you in setting these criteria include;

Buying Properties that have owner occupier appeal- on average, owner occupiers represent 70% of the property market so doing your research and purchasing properties that appeal to the owner occupiers in that particular area ensures you are appealing to the majority of the market. Even if you have no intentions of selling the property, the demand from the majority of the buyers purchasing similar properties to yours will drive the value of your property up, over time.

Scarcity- What is the properties point of difference that is going to be appealing to both tenants and owner occupiers?

This is a good reason in itself to steer clear of high rise apartment blocks.

Balancing Property, Price and Position- If you are focused on price alone, you will most likely have to compromise on the quality of the property itself or at least its position. If position is your number one consideration, you will most probably have to pay a premium price for a small parcel of land or sub quality building.

As a general rule of thumb purchasing in the best area (position) you can afford is a good start, however, it isn’t as black and white as this. There are plenty of other factors that come into play. One example of this is if you can only afford a 1 bedroom unit in a high-rise block in a ‘blue-chip’ location but the demand in the area is from families after 3 bedroom houses then you are most likely better off purchasing in another cheaper area where you can afford the in demand property type.

Capital growth or rental yield- Ultimately this is an individual’s decision based on their short and long term goals. It tends to be a common thought or ‘rule of thumb’ that where higher yields/cash flow exist you will have to sacrifice capital growth and vice versa. However, they’re not necessarily a trade-off. Generally, you do not want to be left out of pocket $100’s of dollars a week, at the same time you don’t want to get insignificant amounts of cash flow coming in while sacrificing growth potential down the track. Being aware of this will ensure you choose an area that offers a balance that suits you as the investor.

Know your budget- There is no point looking at beachfront penthouses if realistically you can only borrow $400,000. In saying that, just because you may be able to borrow a particular amount doesn’t necessarily mean you should go out and borrow the maximum. Work out all of your likely purchase and holding costs and whether you can realistically afford the particular property. Also take into account rising interest rates and any future lifestyle expenses (plans to have a child, overseas trips etc.). Knowing your budget before you start will help to narrow down your search criteria to particular areas within your price range.

Do Your Research – Become an area expert.

Look at as many properties in your selected area as you can.

Get an idea of what properties are in high demand and how much they are selling for.

Learn what is value for the area. What is the demographic of the area?

Is there a large price difference between renovated and un-renovated?

Where are the most popular streets in the area?

Location, location, location- Important things to look for here are;

-Distances to public transport.

-Distances to good Schools, TAFE’s, College’s, Day-care’s and other education facilities.

-Lifestyle drivers such as distance to shops, cafes, bars, parks, proximity to the ocean/coast.

-Distance to employment generators/hubs.

Research areas with a long history of out-performing the averages as chances are this trend will continue.

 

Have a team of professionals helping you- it will be almost impossible to have the success you are after in property investing alone.

Surround yourself with a good team of professionals to fast track your success.

These professionals may include; a Buyer’s agent, mortgage broker, conveyancer, quantity surveyor, accountant and property manager.