6 Things To Consider When Choosing An Investment Property

6 Things to Consider When Choosing an Investment Property

May 10, 2023

Embarking on the journey of property investment can be both thrilling and daunting. Each decision made, from choosing the right location to understanding the potential rental return, can significantly impact the trajectory of your investment. Given the complexities involved, it’s crucial to arm yourself with comprehensive knowledge about the dynamics of the real estate market. There are a number of key factors to consider when buying an investment property, including rental return, capital growth, and development growth, along with other vital considerations. By understanding these elements, you’ll be well-equipped to make informed investment decisions, paving the way for a successful and profitable real estate journey.

The Power of Rental Return

The rental return, often referred to as the yield, is a vital metric for property investors. This figure represents the annual rental income as a percentage of the property’s purchase price. While this can offer a straightforward snapshot of potential earnings, it’s only part of the overall picture.

High rental demand significantly influences rental return. Certain factors, such as proximity to schools, universities, business hubs, or properties boasting modern amenities, secure surroundings, and excellent transport links, typically enjoy high demand. Essentially, the more desirable a location or property is, the higher the potential rental demand, leading to improved rental returns.

Capital Growth: The Silent Wealth Builder

Capital growth, otherwise known as capital appreciation, refers to the increase in a property’s value over time. Although future trends can’t be predicted with absolute certainty, careful analysis can suggest a property’s potential for capital growth.

Investment in areas experiencing strong economic growth, rising population, low unemployment rates, and upcoming infrastructure projects often yields high capital growth. Moreover, properties with unique attributes or those situated in high-demand areas can also appreciate significantly over time, adding to the overall investment return.

Development Growth: A Pathway to Added Value

Development growth hinges on the potential for enhancing a property or introducing new developments to increase its value. This could involve renovating an existing property, subdividing a larger parcel of land, or capitalizing on zoning changes to add new constructions, such as granny flats or townhouses.

Local regulations and zoning ordinances play a pivotal role in development growth. Some areas may impose restrictions on what can be built or altered on a property, while others might be slated for future development by local councils. Understanding these dynamics is key to pinpointing properties with strong development growth potential.

Location: More Than Just a Real Estate Catchphrase

The phrase “location, location, location” has become a real estate cliché for good reason. The location of your investment property can significantly influence its rental return, capital growth, and development potential. A good location doesn’t necessarily mean the most expensive – it’s about identifying areas where people want to live, work, or visit.

Properties in neighbourhoods with quality schools, easy access to public transportation, and nearby amenities like shopping centres, parks, and restaurants, often command higher prices and rents. A desirable location can attract a higher calibre of tenants and increase the resale value of your property.

Due Diligence: The Pillar of Smart Investing

Before finalizing any property investment, conducting thorough due diligence is essential. This process should encompass a comprehensive property inspection, a detailed review of property title and local council records, an understanding of the local rental market, and obtaining a professional property valuation.

Moreover, understanding the tax implications of property investment, assessing insurance needs, and calculating all the costs associated with buying and owning a property are vital components of due diligence. This diligent approach can shield you from future complications and financial pitfalls.

The Final Piece: Leasing Your Property

Once your investment property is secured, efficient management is key to leveraging its full potential. This includes tasks like attracting and retaining quality tenants, addressing maintenance requests, complying with leasing regulations, and more.

How can Zevesto Help?

Here at Zevesto Property Group, we pride ourselves on a reputation for excellence in property management thanks to our skilled and experienced team.

With over 40 years’ experience within the team, we will work alongside you to understand your property goals, and what is most important to you. For investors seeking a comprehensive property management solution, Zevesto Property Group stands ready to assist.

Renting with Zevesto

"Rob Ford is a credit to the real estate industry"

Dear Rob,

It is with sincere gratitude that I write this testimonial to you.

Buying and selling real estate is financially one of the biggest decisions we have to make.

In my case it was a change in personal circumstances that I decided to sell the three investment units in Queensland.

Living interstate I have often received promotional letters from various real estate companies requiring properties for listing and yours arrived at the time I had made the decision to sell.

Each of the three units have their own story.

The first sold within two days and the second sold quickly as well, and the third has now sold after a few setbacks due to termite damage.

The process of selling these units has not been straight forward as you have had to deal with the onsite manager, a person who has tried to make everything as difficult as possible and by his own words “would not co-operate in any way”.

You have, at each step of the transactions kept me informed and guided me through the necessary paperwork. Thank you for being patient with me and making yourself available to answer the many questions I put to you.

At the time my situation with the onsite manager became untenable, your support was very much appreciated and the professional way in which you took over the management of the unit was such a relief.

To the person who is reading this I can say that Rob Ford is a credit to the real estate industry. He was honest in his valuation of the properties and has been able to sell them at the contracted price.
At all times he has been friendly, polite and confident in meeting the challenges (of which there were many) that were put before him.

Rob, I know you will be a success because of your commitment and professional conduct and I wish you well.

Carpe Diem

"Prompt, polite and nothing is a bother"

We first spoke with Progress Properties in November 2011 before we visited Brisbane.

In early 2012, they made contact to see how we were going with our search for an investment property then offered us an opportunity to speak with Brett Devenish, explaining his role with the company.

We first met with Brett on 27 March, 2012 where he explained how they could help us with a property portfolio. Brett collated the financial information required and advised he would be in touch soon with a property of interest to suit us.

Brett made a further appointment time on 24 April, 2012 to discuss a particular property which he left with us to discuss and decide if we would be interested. As we were not familiar with Brisbane suburbs they offered to fly us to Brisbane and show us the area and the property. True to their word we were on a plane on 16 May, 2012 where we were met and taken around the area and to inspect the property. It was also arranged for us to meet with Robert Ford to speak about the NRAS properties. All in all we found this day was what we needed and confirmed everything we had been hearing to date.

We are now in the process of settling this property after Brett and Adrian have done a great deal of hard work to keep both seller and purchaser happy. Once settled we will be leaving it with Progress Properties to manage the rental side as well.

To date they have looked after us and we cannot fault them, so far everything they offered they have delivered. Along with that they are very prompt, polite and nothing is a bother to them, particularly as we are purchasing interstate and things can differ so I have needed extra assistance to ensure everything goes smoothly.

We have already sent them a referral and would consider doing this again in the future.

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