Five things to consider before buying a Perth rental property
Its no secret that Perth has been considered a renters market in recent years. However, whilst property owners arent enjoying the same rental prices they once were, its not been all bad news for WA investors. Interest rates on loans are hitting a record low, and with predictions that Perths property market could be about to turn, now could be a great time for Perth investors to make their next (or first) rental property investment. If youre considering adding to your property portfolio, here are a few tips to bear in mind when deciding where and what to invest in.
Local market trends
Before you even start looking at potential Perth rental properties, its important to research the local market you are buying into. REIWAs suburb profiles are a great resource for prospective property buyers considering where best to make a property investment in Perth. These listings give you information about the average rental yield and and median rent prices for different Perth suburbs so you can begin to get an idea of your potential return on investment. By keeping track of these statistics, you can start to predict trends in Perths property market.
Choosing the right property based on cash flow
When it comes to residential property investment, its important to pick a property that fits in with your financial plan. Understanding your propertys cash flow is integral to the success of your overall investment strategy. If your plan is to have a positive cash flow property, you will need to crunch the above figures to find out how much net profit you can expect to make from your prospective real estate investment. If, on the other hand, you plan to have a negative cash flow property, you will want to invest in a suburb with high growth potential.
Your long-term strategy
Where and what you decide to invest in will depend in part on your chosen investment strategy. Do you plan to live off the rental income from your Perth rental property? Or are you planning to sell your investment property and live off the capital growth? Your long-term investment strategy will determine what you are looking for in your rental property – higher sale value, great rental yields or long-term capital growth.
Selecting the right home loan
Choosing the right home loan to suit your financial circumstances can make or break your property portfolio. Before you take out a mortgage, consider your individual financial situation and your long-term investment goals. If youre thinking about a variable home loan, can you afford higher rates? If you opt for a fixed rate home loan, are their restrictions on extra repayments further down the line? With interest rates relatively low, its a great time to shop around for the right home loan.
Choosing the right property features
Its all well and good researching Perth suburbs and property statistics, but your rental property investment can fall flat if you fail to invest in the right type of property in the first place. If your plan is to make a rental income, you need to know what tenants are actually looking for in a Perth rental. Speaking to your property managers is a great way to find out which property features and characteristics appeal most to tenants, and could help you maximise on rental value.
If you need help increasing the appeal of your investment property, the property management team at Rentwest may be able to help. Our Perth based property managers have an in-depth knowledge of Perths rental market, and can assist you in making the right decisions for your Perth rental property.
Find out more about Rentwests property management solutions by calling us on 9314 9888 or email the team at firstname.lastname@example.org.