Home News 6 steps to a profitable property investment

6 steps to a profitable property investment

Font size :
Nila Sweeney
If you’re thinking of investing in property, these six steps will help you invest in the right property that delivers profits now and in the future.
 
According to Chris Gray, property expert and author of The Effortless Empire - Building wealth from property, investing in real estate is a fantastic vehicle for building and holding wealth – provided you invest in the right types of property, that is.
 
1. Choose property that’s attractive to tenants.

It should be clean, have good-sized bedrooms, ideally with off-street parking, and good positioning away from noise and main roads.

“You’ve got to buy something that suits the majority of tenants in that particular area,” Gray says. “Features such as these will ensure your property is attractive to renters and will guarantee your income stream.”

 
2. Choose property that will grow in value.

Sounds like a no-brainer, but it can be easy to mistake a lemon investment for a good value prospect.

"If the property is close to a major CBD, beaches, schools, public transport and leisure facilities, it’s more likely to grow by more than the average in a good market and is more likely to hold its value in a down market," Gray explains.

Keep in mind that if you buy around the median price, then more people can afford to rent it and more people can afford to buy it, if you were put into a forced sale position.

 
3. Buy blue chip.

“Cheap properties are cheap because they’re not in great demand and there’s plenty to choose from,” he says. “It’s often worth paying market value for a good property in a top suburb than it is to get a discount for something that no one else really wants.”

 
4. Create instant equity.

Do some quick renovations such as a paint job, re-carpeting, tidying the garden, painting the fence, installing new curtains or blinds and replacing the kitchen-cupboard doors. “For every dollar you spend on renovating you should be aiming to get at least $1-2 back in the value of your property,” Gray says.

 
5. Refinance your property to create a buffer.

When your property grows in value, refinance to create an emergency cash buffer zone. “You don’t want to find yourself in a forced-sale position, as you won’t get the best price and it may trigger capital gains taxes and other expenses,” he warns. A cash buffer will ensure you can continue to make mortgage repayments even if you lose your job.

 
6. Re-sign your tenants.

It’s so important that you hire a professional property manager to ensure you get reliable tenants and that they pay a good market rent. “Aim to tie your tenant down to 12 month agreements, to help guarantee your rental income,” Gray advises.

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Mortgage News and Articles

Mortgage applications drop in second quarter Mortgage applications drop in second quarter

This marks the “beginning” of a downward trend, says Equifax executive Read more

To break monopoly, many smaller lenders could become banks To break monopoly, many smaller lenders could become banks The proposed change could break the Big Four’s monopoly over the mortgage market and help families get cheaper home loan rates ... Read more

Borrowing against the home: A strategy to pay for aged care Borrowing against the home: A strategy to pay for aged care Such debts can generally be divided into long-term and short-term loans ... Read more

NAB slashes growth forecasts for houses, units NAB slashes growth forecasts for houses, units Numerous factors, including tighter credit rules and the growing supply of new stock, have reined in Australia’s seemingly unstoppable housing market boom ... Read more

More mortgage news and articles

Sponsored Links

Sunday, Jul 23, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Whether you're a first homebuyer, looking to refinance, or investing, it's important to have the right loan for your needs. Just fill in a few details below and one of our trusted mortgage advisers will contact you.

A quick & easy way to find the right home loan
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords