Australian property investors own over a quarter of all the housing stock in the country, valued at over $1.37 trillion, according to CoreLogic. There's a very simple reason why these investors own so much property – it can be an extremely profitable investment.
However, it's not foolproof. If you want to ensure Melbourne property investment success, start off the right way by keeping these pearls of wisdom in mind.
Don't just look for capital gains – particularly on your first property
When you sell a property for more than you bought it for and pocket the difference – that's a capital gain. Capital gains can be a brilliant way to make money, however, they shouldn't be the sole focus of your property investment.
Rental yields are equally, if not more important, particularly if you don't earn a high salary or you're new to investing. They'll offer vital cash flow, making your mortgage easier to repay, helping cover unexpected costs and allowing you to gain equity in the property quicker.
Always cover your bases before buying
One of the most useful pieces of Melbourne property investment advice we can give you is to always look before you leap. If you settle on a property without doing your due diligence you could find problems with it later on that are costly to fix. Before you purchase you arrange the following checks and reports:
- Building report.
- Pest inspection.
- Strata report.
In addition to these, you should always have a conveyancer go over contracts of sale and the title of the home to ensure they're in order before signing on the dotted line.
Find a good property manager and let them do their job
The success or failure of any rental investment depends on the relationship you have with your tenants, and the way you manage that relationship. Hiring a professional property manager is the best way to ensure you get this part right.
Use someone local and experienced with a solid reputation. In the long run this will help ensure you receive constant rental income, are always in line with tenancy law, and that your property is maintained to a high quality.
It can be hard to come across quality support for beginner property investors in Melbourne. However, if you're careful when choosing an agency you'll receive the best possible, from buying a new investment property, to managing it, and right through to the day you eventually sell.