With interest rates sitting at all-time lows and property prices climbing pretty steadily month to month, the market is looking prime for investors.
So it's really no surprise that recent data from our customers shows investors currently account for almost 40 per cent of all the loans we write. This has gone up from 30 per cent just three years ago.
Of course, the number of investors flocking to the market is hardly surprising when you consider that the cost of borrowing has never been more affordable and lenders seem to be aggressively competing for business.
Home buyers have seen property prices grow by 7.9% in the last year and Sydney continues to be the star of the show, with property values climbing by more than 14% over the last 12 months. This sort of growth is clearly appealing to avid property investors.
But while there may be plenty of reasons to explore property investing; if you're looking to make your first investment purchase in the not-too-distant future, make sure you do your due diligence and make your decisions with your head, not your heart.
When you're searching for the perfect investment property, you'll need to take a very different approach than if you were hunting for your dream home.
A buyer's vs renter's needs and wants
When choosing your dream home for example, you might look at how the house will best accommodate you or your family by looking at the number of bedrooms or how close it is to your work, schools, other family and friends, etc.
When searching for an investment property, you need to think less about your own property preferences and more about your potential tenants' wants and needs. Think about the kind of tenants you want to attract to your investment property, and use this to help you hone in on the type of property and property features that would be best for these potential tenants.
It's also important to keep in mind that tenants can be very picky about what they are getting in return for their rent, so try to maintain an objective eye and consider what it offers that other similar properties might lack.
Location is a key driver when selecting an investment property, so aim for the best location that you can afford. A property offering good transport links and proximity to businesses like shops, restaurants, parks, schools and even hospitals is ideal.
Make sure that you research locations carefully and take into consideration all of the important factors like: population growth, rental demand, local price growth, developments planned for the area in the coming years, etc.
Other ‘must-have' investment property features include:
Is it a safe, quiet street with good lighting or a home security system? In the same way you want to feel safe in your home, you want your tenants to feel safe in theirs.
Believe it or not, off street or undercover parking could add value to your property and attract a wider range of tenants.
In order to maximise your rental return, look for properties that will appeal to your ideal tenant. Why not give the house a little more aesthetic appeal with a fresh coat of paint, or by putting new handles on the kitchen cupboards – every little bit helps!
Ample storage is a plus for tenants who may only be staying for the short term or who may otherwise have to pay for off-site storage. Plenty of storage facilities could also help to ensure that the property remains well-kept.
Stick to properties that can be easily and cheaply maintained on the tenant's behalf, as they are more likely to prefer low maintenance homes that will not require a significant investment of their time for upkeep.