Investing in property is a serious financial commitment and it’s something you want to get right before you plunge into it. I have collated a checklist of some questions you should always consider before investing in a Property.
It’s actually the list I use when looking at investment property opportunities on the market. It’s important to seek expert advice from your trusted real estate investment team however this checklist will give you some good points you should take into account.
- What’s my expected rental yield on the property and the costs of holding the property? This involves conducting a full cash flow analysis
- Is it within close proximity to amenities such as transport, education, medical, shops, etc
- What infrastructure is taking place around the area and will this help increase the value of the property
- What is the population growth in the area?
- Does this property have equity creation potential i.e. renovation or subdivision
- What is the local vacancy rate
- Is this property subject to flooding
- How old is the property? How much depreciation (if any) can I claim
- What condition is the property in? Are there any immediate or short term repairs or maintenance that stand out
- Is the area noisy
- How is the parking
- How will I structure the financing for it
- What will be the effect of the property being vacant for a while
- If there is a body corporate, have I carried out a body corporate search
- Am I investing in an area with a strong diverse economy
- What is the land availability in the area
- What are comparable sales and is the property at or below market value
- What are the local demographics within the area and are there any emerging trends
- How has the area performed historically
- Does the area offer affordability
These cover off some of the many questions every smart property investor should ask before investing in property. By thoroughly carrying out your due diligence and doing your homework you will be a part of the minority of successful investors who use property to create real wealth in the medium to long term.