Finding the right property - a challenge for investors

New Mortgage Choice survey sheds light on investor market

 

Finding the right property is the biggest challenge facing property investors today, new research has revealed.

 

According to Mortgage Choice’s 2014 First Time Investor Survey, 50.6% of investors who purchased their first investment property within the last two years said finding the right property was the hardest part of investing.

 

The results were surprising, especially given the current market conditions.

 

“With property values climbing considerably over the last 12 months, we expected to see more first time investors saying their biggest challenge was saving a deposit,”

 

“Instead, just 15.3% said “saving a deposit” was the biggest challenge they faced when investing in property, while a further 15.5% said “choosing the right investment strategy” for their needs was the toughest aspect of property investment.”

 

Looking at the data, it was clear that Australians are quite particular about what they want from their investment property.

 

“They know what they want and they won’t settle for anything less,” 

 

“When purchasing an investment property, investors look for a dwelling that is not only located in the right suburb and is close to essential amenities, but also a property that is located in an area that has proven high tenant demand.

 

“For investors, it seems location is everything. A property that is located in a good suburb and near the necessary amenities including cafes, restaurants and local transport, is likely to attract more tenants, which can help to increase the rental income generated by the property.”

 

Investors are a savvy bunch - they have done their due diligence and investigated not only what locations are attractive to potential tenants, but what types of properties are in hot demand.

 

“More than 60% of recent investors admitted to purchasing either a small house (1 to 3 bedrooms) or a small unit (1 or 2 bedrooms) because they know these types of properties are in the highest demand,” he/she said.

 

Just 23% of investors admitted to buying either a large house (4 or more bedrooms) or a large unit (3 or more bedrooms) as an investment property.

 

“Today’s first time investors are switched on. They know what their potential tenants are looking for in a property and they aren’t prepared to buy something that doesn’t meet these requirements,” 

 

“Despite the fact that the property market is running hot at the moment and there is a lot of competition out there from other buyers, it seems first time investors are happy to bide their time and wait until they find the perfect property.”

 

If you would like more information on property investment, call 5502 8906 or click on the 'contact us' tab at the top of the page.

 

 

Table 1: Greatest challenge

 

What is your greatest challenge as an investor?

National

NSW

VIC

QLD

SA

WA

Saving a deposit

15.3%

14.6%

17.1%

7.8%

26.5%

14.1%

Choosing the investment strategy (eg. Negatively or positive geared, to renovate and sell or hold for potential capital gain, etc.)

15.5%

16.8%

9.3%

18.6%

11.8%

19.7%

Finding the right investment property

50.6%

53.3%

57.4%

52.0%

38.2%

43.7%

Choosing the right property loan (ie. interest only versus principal and interest, fixed versus variable, etc.)

7.3%

6.6%

7.0%

8.8%

7.4%

8.5%

Getting the finance approved (i.e. due to credit history, being self employed, etc.)

5.6%

5.1%

3.1%

4.9%

10.3%

8.5%

Sourcing quality financial advice

5.7%

3.6%

6.2%

7.8%

5.9%

5.6%

 

Table 2: Top factors they look for

 

What are the top five factors you look for in an investment property? (multi answer question)

National

NSW

VIC

QLD

SA

WA

Ability to renovate to add value

30.7%

33.6%

27.1%

32.4%

44.1%

21.1%

In the right suburb and street

71.6%

68.6%

74.4%

73.5%

79.4%

66.2%

Tenant demand in that area

73.8%

75.9%

76.7%

73.5%

61.8%

77.5%

Suitability of the property to my desired tenants

29.3%

30.7%

28.7%

23.5%

30.9%

31.0%

Population growth in that area

47.5%

51.1%

41.9%

52.9%

35.3%

53.5%

Infrastructure going into that area

55.6%

59.1%

51.9%

55.9%

55.9%

62.0%

Locality to amenities and entertainment (cafes, restaurants, etc)

59.0%

52.6%

62.0%

63.7%

58.8%

57.7%

Size of rooms and how functional the layout is

37.4%

27.7%

41.9%

36.3%

42.6%

38.0%

How easy it is to access (eg. elevator, stairs, angle of driveway)

8.6%

10.9%

5.4%

6.9%

14.7%

2.8%

How many car parking spaces  are available, if any

12.6%

13.1%

18.6%

9.8%

7.4%

9.9%

If it needs any repairs, renovations or regular maintenance

39.8%

40.1%

39.5%

36.3%

33.8%

47.9%

If the location is accessible for me to make regular inspections

9.2%

8.8%

10.9%

6.9%

8.8%

11.3%

Aspect (not looking onto neighbours properties, views, window placements, etc)

13.0%

15.3%

7.8%

17.6%

14.7%

9.9%

Level of noise

9.0%

9.5%

11.6%

7.8%

7.4%

7.0%

Other

2.9%

2.9%

1.6%

2.9%

4.4%

4.2%

 

Table 3: Property type

 

What type of investment property did you purchase?

National

NSW

VIC

QLD

SA

WA

Small house – 1 to 3 bedrooms

38.7%

35.0%

45.7%

35.3%

50.0%

29.6%

Large house – 4 or more bedrooms

18.0%

13.1%

11.6%

25.5%

19.1%

29.6%

Small unit/apartment – 1 or 2 bedrooms

25.3%

33.6%

28.7%

17.6%

16.2%

15.5%

Large unit/apartment – 3 or more bedrooms

5.0%

5.8%

2.3%

5.9%

4.4%

7.0%

Block of units/apartments

1.9%

0.7%

3.1%

2.9%

0.0%

2.8%

Small townhouse/terrace – 1 or 2 bedrooms

2.3%

2.2%

2.3%

1.0%

1.5%

5.6%

Large townhouse/terrace – 3 or more bedrooms

5.2%

6.6%

4.7%

6.9%

2.9%

4.2%

Duplex

0.6%

0.0%

0.0%

1.0%

1.5%

1.4%

 

Posted in: Property investment

Contact us today.


Additional Comments? * :