You’re armed with a budget and you’re ready to find your investment property.
You know it’s all about location, so you set off to find your waterfront, beach-access, close-to-transport piece of real estate gold… but everything is out of your price range.
Properties that tick all the right boxes for good capital growth potential can start to lead you into expensive territory, which can be out of reach for tight budgets – particularly for first-time investors.
We’ve all heard the popular real estate adage ‘location, location, location’, so when budget constraints narrow our criteria, what do we look for instead?
3 factors to consider:
When you buy an investment property there tends to be 3 variables:
- Price – this is determined by the banks, so you usually have little say here.
- Location – remember – around 80% of your property’s performance will be due to its location, so this is a factor I don’t like compromising on.
- The property – this is where you may have to make some compromises if you’re on a tight budget.
So for those investors seeking out more affordable properties, you may need to make concessions in the type of property you buy in order to stretch your dollar further.
However, there are some properties to steer clear of at all costs:
- Those that back onto highways or are located on main roads.
- Ones that are too close to train stations or airports.
- Properties located near factories or industrial zones
If you can only afford a property in any of the above locations, keep your money in your pocket and either look elsewhere or wait till you can afford to buy an “investment grade” property.
What do you do when you have to compromise on the location?
Here are some tips if you’re finding your budget is a bit tight:
- It may be better to buy an apartment in a great location that a house with land in a secondary location.
- It may be better to buy a 1 bedroom apartment in an high growth suburb than a 2 bedroom apartment in a secondary location.
- Consider buying a rundown dwelling in a better location, as you can always bring it up to scratch with some renovations down the track.
- If you can’t afford a house consider a town house or villa unit – both these types of property benefit by having a high land to asset ratio.
- Consider taking advantage of the ripple effect – look for a good property in an adjoining suburb – one which will benefit from the outward ripple of rising property prices.
Finding an “investment grade property” is a time-consuming task with plenty of research and planning required, however if your budget is tight, don’t bend on certain ‘deal breakers’.
You can never change a property’s specific location so don’t compromise on this factor.
IF YOU’RE ALREADY AN EXPERIENCED PROPERTY INVESTOR OR YOU WANT TO “FAST TRACK” YOUR SUCCESS…
Here’s your chance to invest 2 powerful days and learn renovation and development strategies that experienced property experts are using around Australia to “manufacture” capital growth and generate strong rental returns, so that they can win in today’s challenging property markets.
TAKE YOUR PROPERTY INVESTING TO A WHOLE NEW LEVEL BY JOINING ME IN OCTOBER AT MY…
What’s it all about? Click here and find out more.
Maybe now it’s time you stepped up and played in the big league by getting started in property renovations or development.
This is the course where other “experts” who are now teaching got their education. Click here find out more and reserve your place
SUBSCRIBE & DON'T MISS A SINGLE EPISODE OF MICHAEL YARDNEY'S PODCAST
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
NEED HELP LISTENING TO MICHAEL YARDNEY'S PODCAST FROM YOUR PHONE OR TABLET?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
PREFER TO SUBSCRIBE VIA EMAIL?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.