How to Ensure Your Property Investment Will Be Profitable

Investing in property is a proven vehicle for growing wealth but for many newbie property investors, the whole thing can feel overwhelming. Here are a few things you must consider if you want your property investment to be profitable long-term.

1. What is the infrastructure like in the area?

You’re far more likely to secure a profitable property investment if it’s in an area where there is a secure infrastructure already in place. Having a secure infrastructure means you’re also much more likely to attract tenants as well. This includes things like great public transport connections, roads, power supplies, schools, and more.

These are all likely to boost the value of your property.

2. Research what areas consistently record a rise in property prices

Research is one of the most important parts of the process because it will allow you to see what areas consistently register rising property prices. Then you’ll also know what areas record lower property prices consistently.

This is the best way to determine what areas contain properties that can be a potential goldmine for you.

3. Is the area your property in likely to attract families?

It’s an important consideration because families are generally considered to be much more stable & long term tenants. Areas that are also family friendly are likely to have a higher property valuation than those that aren’t family friendly.

4. Do you understand the capital growth and yield growth of the potential investment property?

These are two of the most important metrics to consider if you really want to know how profitable your investment will be in the long-term.

Generally, a high yield strategy is less risky but there’s also less chance to make as much money from your investment.

Compare this to a reasonable capital growth rate that is much more likely to give you a long-term return on investment. However, a capital growth strategy means you’ll be subject to interest rate and mortgage rate increases.

The reality is that both of these factors are important because they’re both proven wealth generators. Choosing which one to focus on is really dependant on your own objective’s as a property investor, your financial circumstances, and the level of risk you’re willing to take.

5. How does the home compare to others in the area regarding price?

Again, this comes down to research. You’ll want to research what the average price range is of houses in the area so then you can be confident you’re getting your money’s worth. This is a serious investment so you don’t want to leave anything to chance.

6. Consider the amount of land available in the area

There are two factors to examine here. One is how much free land is available for potential future development. Two is a lack of free land. A lack of free land can actually be a good thing because it can mean that demand is high in that area and this boosts the value of the property. This isn’t always true but it’s something to remember.

Investing in property can be challenging but take solace in knowing we have a team of real estate agents that are experts in this area along with providing property management services.

We can also help with rough estimate appraisals on listings to potential investors prior to purchase!

If you want some clarity and confidence you’ll make a smart property investment decision give the team at Hicks Real Estate a quick call today on 07 3355 6845.

We always recommend that you seek professional financial advice before investing. The team at Hicks Real Estate are highly skilled, dedicated and people focussed professionals. Call us today on: 07 3355 6845 for any of your real estate selling, purchasing or investment questions.