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Sam Price, a Brisbane buyer’s agent with 20-plus years in the market, shared seven questions property investors should ask before they take the leap.
1. Is this property purely for investment? Will my family or I potentially move in down the line?
“It’s important to be upfront with your intentions to best define the criteria for the property,” said Price.
For instance, if you’re buying purely as an investment, you might focus on properties with good yield and growth potential, without being too concerned about specific amenities or layout.
However, if there’s a chance you or your family might live in the property down the track, you may want to prioritise factors like proximity to schools, public transport, overall appeal, and layout. Defining this upfront can ensure the property suits your long-term needs.
2. What type of property is best suited to my willingness to complete work on the property?
“Deciding between a house, unit, or townhouse will depend on your budget and willingness to maintain and complete updates to the property,” said Price.
“This should be considered prior to purchase.”
3. How much can I afford to contribute out of pocket each month to cover ownership expenses?
Price highlighted an important consideration here: “I haven’t seen many properties that turn out to be great investment properties that are also cash flow positive from the beginning.
“Unless you have a 50 per cent deposit, that is.”
So, the bandwidth to contribute additional cash to the property is an important consideration.
4. Where will I buy my investment property? Will you purchase your property close to home or in another state?
This should be determined by your own opinion in conjunction with fundamental analysis.
5. How long will I hold the investment property for?
“Let’s put aside the rapid price escalation the Australian property market has seen in recent years,” said Price.
“The fundamentals are that property is a long-term investment and any timeframe shorter than 8-10 years can prove high risk.”
6. How much should I invest in the property?
“This isn’t how much you can afford,” Price said. “Overcommitting on your first investment may limit your ability to purchase further property or other investments in the future.”
7. Do I feel confident in my expertise in choosing a quality property to invest in?
This is where a buyer’s agent can help investors make a great decision. The pay-off from the property long-term generally far outweighs the fee investment.
Sam Price is the director of Templeton Property.