What are the Characteristics of an Investment Grade Property?

Characteristics Investment Grade Property

Previously, we talked about how you can get started on your investment property journey, and that there’s no better time than NOW! But how do you go about identifying an Investment Grade Property, and what characteristics should you be looking for?

Nowadays, a quick search in realestate.com.au will give you over 300,000 properties for sale in Australia! Each of these could be use as rental property analysis, but that is not to be confused as being an ‘Investment Grade Property’. Anyone can buy a house, rent it out and instantly become a rental property owner overnight; however, without proper research, you could end up with a property that drains your pockets instead of filling them.

You might have heard the horror stories of nightmare tenants, hidden problems in houses that cost a fortune to fix, or the property that sits vacant and failing to yield rental income. These issues usually arise due to a lack of understanding and research on a property that is of Investment Grade. Generally, the characteristics to look for are:

  • Location, Location, Location! – is there strong growth and demand in the area? Or is there expected growth due to new schools, shopping centres or new developments?
  • Condition of the Home – is the home structurally sound (hidden problems can cost you thousands!)? Does it have modern facilities and a good floorplan? Is there room for improvement or added value?
  • Street Appeal and Security – what are the neighbours like? Does the street offer security and comfort to the tenants? Ask yourself, do you feel safe leaving your car parked on the street?
  • High Land to Asset Ratio – this is not to be confused with having a large block of land. Ideally, the land should grow in value. Size shouldn’t matter as long as it is a suitable block in a high growth area.

While this sounds like common sense, it’s certainly easier said than done. When you’re faced with thousands of properties for sale, it can be quite overwhelming and even discouraging! You might know your suburb well, but the homes are too expensive; or there might be more affordable options elsewhere, however, you’re not familiar with the area.

The fact is, only a very small percentage of properties are Investment Grade. That is why Smart Property Research is here to help. We analyse the rental market and target high-density areas with the lowest vacancy rates. You can also rest assured that our range of mostly new built homes is of the highest quality, therefore avoiding the issue of hidden problems in older properties.

Investing in property is highly achievable and a secure option for most Australians. Why not get in touch for an obligation free chat today: 0428 665 259

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