I have been in the property industry for more than 15 years and nothing gives me more joy than being able to share my experiences and knowledge with others.
When I am researching new suburbs and locations as possible areas of investment, I like to use the following property investment checklist as it quickly narrows my focus and makes me ask the right questions and gather the necessary information I need to make an informed decision. It’s like a to-do list for investment property buyers!
Property Investment Checklist Item #1: Is the property close to existing or planned infrastructure?
Top of the property management checklist is to think of all the amenities you need for a good community including schools, shops, sporting facilities, cafes, services and more. If there is infrastructure planned or in place, this will attract tenants and be a positive for resale in the future. Future development is also important for capital growth and so this should feature high in your property investment checklist.
Property Investment Checklist Item #2: What transport options are easily available?
Next on your property investment checklist is checking out the transport infrastructure. It is important to assess what transport options will be available to your tenants including freeway access, major arterial roads, road networks, cycle paths, train lines, public transport and footpaths. If the transport options are in the pipeline, this can provide a potential opportunity for capital growth once they are delivered in your property management checklist.
Property Investment Checklist Item #3: How much land is available in the area?
The lack of land in an established, sought-after area can prove to be a very smart investment as a decreasing supply can drive up demand and push up the value of a property. Alternatively, don’t be afraid of a healthy land supply in a new land estate when completing your investment property checklist, as it is an indicator of future growth. Just make sure there is a strong sales rate in any new estate because stagnant sales are a good indicator that an area might not be as popular as it seems!
Property Investment Checklist Item #4: How many rental properties are available in the area?
Keep an eye out for suburbs where there is a tight rental market and where rental properties are quickly snapped up! This is always part of my investment property checklist! High demand for rentals is what you are looking for as this offers good opportunities for investors and decreases the likelihood of your property sitting vacant for any extended length of time.
Property Investment Checklist Item #5: What are the historical growth rates of the area?
When completing your buying an investment property checklist, research the area and look for a consistent and steady increase in property prices over the last ten years. Avoid areas that have suffered from plummeting price drops or major jumps as steady growth indicates stability and points to a healthy future. This will help with your financial planning checklist.
Property Investment Checklist Item #6: Have you compared the benefits of buying new or established?
Something most people don’t think about in their property investment checklist is the type of house. Carefully weigh up the advantages of buying new versus established as a new property can provide considerable tax benefits and advantages. This is an important part of your financial planning checklist.
Property Investment Checklist Item #7: What is the demographic breakdown of the area?
When considering an area on your property management checklist, you want it to have a balanced and welcoming community and a good mix of residents. If possible, research the number of owner occupiers and investors, if there is any public housing in the locality, the demographic breakdown of the area and look at the overall presentation of the surrounding suburb. You want your investment property to be surrounded by neighbours who take pride in their properties so it is a welcoming neighbourhood for your tenants and improves your chances for resale. It always pays to do your research when you are going through your buying an investment property checklist!
Property Investment Checklist Item #8: How does the property compare to the market average?
Vital to your property investment checklist is the competition! Check out where your potential property sits in the market compared to local and national averages. Are you paying a premium or does the property have good potential for capital growth? It’s also good to compare the property to other similar homes in the area to make sure it is priced accurately when completing your financial planning checklist.
Property Investment Checklist Item #9: Have you considered both capital growth and rental yield of the potential investment?
When evaluating an investment property it is always a careful balancing act between the potential for capital growth and a high rental yield. A property might achieve a strong rental yield but it might be priced at the top of the market so you miss out on any growth opportunities. Conversely, you might be forced to suffer a lower than desirable rental income in the hope the property will increase in value over time. Never sacrifice one over the other – make sure it is strong in both areas.
Property Investment Checklist Item #10: Is the property in a master planned area which will appeal to families?
Last, but not least, on our property investment checklist is to always carefully review the master plan in a new or up-and-coming estate. This is necessary because they generally have been expertly planned to deliver excellent lifestyle amenities whilst maximising safety and security. Areas that attract and cater well for families are appealing because families are generally valuable, stable tenants. Master planned communities can provide excellent investment opportunities.
You can do the research yourself using a property investment checklist, or if there are any areas where you need some expert advice or a helping hand, get in touch with the team at Investor Assist. Local council websites also provide good statistics and growth information. You can review quality investor magazines and news articles plus property liftouts in your local newspapers. But whatever methods you choose, make sure you get experienced, credible investment advice to help you make a smart decision. And use this article as your property management checklist for investment property decisions.
Want to get started on your investment property checklist? Download our Assist Kit to help get you started.
DISCLAIMER: This information is of a general nature only and does not constitute professional advice. We strongly recommend that you seek your own professional advice in relation to your particular circumstances.