The stock market has literally been up and down every single day over the last two months and the unease in the stock market isn’t over yet because, most analysts agree that the real market correction is set to come.
With the instability in the stock market you may be wondering if you should invest in real estate and the answer is yes.
Unlike the stock market, real estate offers stable returns right now that you can depend on.
Imagine knowing what return you’re going to get from your investments on a monthly basis. This is what investing in real estate will do for you. It’s going to give you stability and peace of mind that you won’t get from investing in stocks right now.
What To Look For In An Investment Home
The property price
According to The Australian Landlords Panel*, around half of all investment properties are valued between $250,000 and $500,000.
“Australian landlords tend to buy and rent to the middle market – a market which might increase if incomes become increasingly squeezed in the continuing post GFC era. Renting may thus become a matter of necessity rather than choice,” the report states.
This means that you shouldn’t just focus on whether you are buying at a good price: It is important to consider the affordability of the market you buy into, so your investment appeals to the largest possible pool of tenants.
Sticking within your chosen suburb’s median price bracket is a good starting place.
The rental income
Another important consideration when determining your property investing budget is the reliability of rental income. It helps to determine whether a potential property investment is located in an area with a steady supply of renters; near employment nodes such as universities, hospitals and other commercial precincts is a good place to start.
A central location that appeals to tenants can ensure a strong rental income and minimise your losses, if tenants unexpectedly vacate your property.
Your asking rent should also be reviewed annually, with a view to increasing the rent regularly. Take note of vacancy rates; below 3% is considered tight and below 2% is considered extremely competitive. Your property manager will guide you and can provide evidence of comparable asking rents, to prove that the market can support an increase. Keep in mind that the rent must be low enough to attract appropriate tenants, but also high enough to move your financial position forward.
Your budget may dictate whether you can afford to invest in a house or an apartment. Either way, you should ensure that the property type suits the demographic of the area, and will continue to meet the needs of the local market for years to come.
Take notice of the age and condition of the property and its fixtures and fittings such as carpets, curtains and cabinetry, keeping in mind that you want a property that is ready to rent out as soon as possible. In saying that, choosing a property that isn’t in pristine condition may be a smart move, if you believe you can add value through future renovations. Otherwise, select a home that is fresh, clean and ready for tenants to occupy immediately.
The property must be attractive to both prospective tenants and owner occupiers so you’re not limited when it comes to selling. Features like a well-considered floor plan, appealing colours and a good view will positively influence demand, which in turn can influence its value.
To ensure your property is as attractive as possible to renters, you must take into account factors like its proximity to the CBD, public transport, schools and other lifestyle amenities.
Also consider: what are the future plans for the area? How will they affect anyone living there? And what level of crime or natural disasters are occurring (or at risk of occurring), nearby?
Most importantly, you need to undertake enough research to become confident that the property is the type of home that people in that location are looking to rent. If it’s located near a university, for example, small, low-maintenance apartments are going to be more in-demand that family homes with large backyards.
Search For Investment Properties
To get started with searching for investment properties in Miami or Fort Lauderdale Florida contact the Bryan Orange Group by calling us at (786) 606-7227 or click here.