The keys to property investment

August 26, 2015
Peter Dall

Mortgage Choice reveals top 5 factors for property investors 

A majority of Australian investors are motivated to buy property for financial reasons, new data has revealed. 

According to Mortgage Choice’s 2015 Investor Survey, 76% of investors said they bought their investment property to ‘set themselves up financially for the future’. 

Speaking about the results, local Mortgage Choice franchise owner, Peter Dall said with vacancy rates low and property prices on the rise, property investment can be a very lucrative investment strategy provided it is done well. 

“So long as Australians buy the right investment property, property investment can be a great way for someone to future proof their wealth,” he said. 

“Of course, finding the right investment property can seem like a daunting task – especially for first time buyers. To make the process easier, it is important to know what key factors all investment properties should have.” 

To help Australians hunting in the market, Mortgage Choice has revealed the ‘keys’ to successful property investment: 

Location, location, location: According to the Investor Survey, 59% of investors believe purchasing in the right suburb and street is a key factor when choosing a property. Indeed, buying a property that is ideally located is imperative as it can help ensure you always have tenants and achieve strong capital growth. 

Revisit finances: Most people realise that establishing a finance strategy is an important first step to buying property. However, some buyers fail to revisit that strategy during the house hunting process – which can take upwards of six months. While you may have been pre-approved for finance earlier in the year, recent changes to investment lending policy and pricing may affect your ability to finalise your finances come settlement. Remember to keep your finance strategy front of mind and double-check any financial advice you’ve received before placing an offer on a property. 

In demand: Buying an investment property that is close to things like public transport, restaurants, cafes and educational institutions is always a good idea as it will help ensure you earn top dollar and keep the property occupied. Tenants love to be close to the action, so it is important to make sure your investment property is as well. 

Know your numbers: Do your research on population growth, average rental income and vacancy rates, in the areas that interest you. The more you know your numbers, the easier you will it will be to buy a property that meets your needs. 

Repairs and renovations: Keep your eyes peeled for any maintenance or renovations a property requires. From the first inspection it is important to weigh up quick and easy fixes, which will boost your rental income or capital growth, over those that will be more costly and timely. 

If you would like learn more about your home loan or financial advice options, call 0414 583 233 or visit www.mortgagechoice.com.au/peter.dall.

Table: Key motivators

What are/were the key motivators behind your looking to buy an investment property?

National

NSW

VIC

QLD

WA

SA

My parents' success/experience with property investments

13.0%

13.5%

16.6%

9.2%

10.9%

15.4%

I don’t wish to own my own home but I see the benefit in having an investment property/ies

5.1%

5.5%

5.9%

5.3%

3.6%

4.0%

I’m not ready to own my own home but want to get a head start in the market

9.7%

12.5%

9.8%

11.2%

7.3%

8.0%

I see more benefit in investments such as property, than I do in the share market

44.0%

44.5%

40.5%

44.7%

44.8%

45.8%

I have researched the property market and feel property investment will enable me to achieve my financial goals sooner/better

31.9%

31.5%

36.6%

31.6%

32.3%

27.9%

Tax benefits

38.7%

39.5%

39.0%

39.8%

39.1%

36.3%

Advice received from family, friends or a financial advisor

25.1%

27.5%

27.3%

24.8%

20.8%

24.4%

Reading and/or hearing of others’ success

20.0%

19.5%

24.9%

18.9%

19.8%

16.9%

Capital gain

27.0%

30.5%

30.2%

24.3%

28.1%

21.9%

Negative gearing

24.9%

26.5%

28.8%

19.9%

22.4%

25.9%

Positive gearing

13.7%

14.0%

11.7%

19.4%

9.4%

13.4%

I want to set myself up financially for the future

75.8%

71.5%

71.2%

76.2%

82.8%

77.1%

Pressure from family/my partner

11.6%

16.5%

10.7%

8.7%

14.1%

8.5%

Building a portfolio to hand on to beneficiaries

22.5%

15.5%

23.9%

24.3%

21.9%

27.4%

Potential rental yields I can get

36.7%

37.5%

32.7%

38.8%

36.5%

38.3%

To diversify my asset portfolio

26.5%

22.0%

26.8%

24.3%

30.7%

27.9%

I can’t afford to buy the home I want so I’m taking the first step with an investment property

15.3%

19.0%

13.2%

14.1%

15.1%

15.9%

To plan for my retirement

57.4%

52.5%

49.8%

63.1%

58.3%

63.7%

Other

1.2%

0.5%

0.5%

1.5%

2.1%

1.5%

 

For further information, or to arrange an interview, please contact:

Peter Dall - Waverley Mortgage Choice

Mob: 0414 583 233 - em:peter.dall@mortgagechoice.com.au

                                               

*About the survey

Market research company Nine Rewards was commissioned by Mortgage Choice to conduct the 2015 Investor Survey. The online survey was conducted in July 2015 and completed by 1,025 Australians who were planning to purchase their first investment property in the next two years or recently purchased their first investment property.

 

Important information

This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.

 

 

 

Posted in: Property investment

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