Inspect/Choose the Property

Checklist for Buying Property

It must pass 2 fundamental tests:

  • It must pay regular income: Look for locations where demand for rental accommodation is greater than supply. This gives you a better chance of finding potential rentals and develop greater capacity  to increase your rental income.

  • It must be able to increase in value: Increase in value means a growth rate above the inflation rate. Ideally it should double in price within a 10-year period. In Australia, residential property has consistently doubled in value every 7 years.

Things to look at:

  • Location is important, as we all know. However, don't forget the other important factor - timing. Yet there is one even more important factor, and that is price. Ideally you need to look for a property in the right location, at a very good price, purchased at the right time. This gives you the maximum advantage of investing in property.

  • If looking for property you can subdivide and sell, find a property on a good sized block, because it gives you the best options.

  • Look at architecturally sound properties, requiring low maintenance. They must have established gardens, swimming pools, driveways, etc. They should be in sought after locations where prices are continually rising.

  • Consider the potential tenants: Find properties close to public transport, shopping centres, childcare centres, churches, schools, employment centres, sporting venues, etc.

If seeking an apartment or unit:

  • Check out the number and size of the rooms.
  • Look for the capacity to alter or extend if necessary.
  • Look for recreational space and balconies.
  • Check parking space availability and street parking.
  • Look at the position of the unit on the building.
  • Look at comfort factors, such as noise levels, pollution, privacy, security, and position to the sun.
  • Check other costs such as body corporate fees, general state of the premises and proximity to other people.

Economic factors:

  • Check interest rates; whether they are rising, falling or stable. Make sure your weekly earnings are sufficient to meet the loan repayments.

  • Watch inflation. If inflation is rising, there will be pressure to increase your interest rate and prices, although it can be countered by an increase in tenancy rental.

Other factors:

  • Shop around for the best deal for loans, especially at times when less people are going into property and looking for finance.

  • If you are new to property investment, consider getting professional help regarding buying or selling, to gain the best advantage in your investment.