Often when speaking with my clients, one of the first questions they ask is “what is the best investment property to buy?” This will depend on you the client and what your goals and investment strategy are. Some people are looking for cash flow as they don’t have a lot of spare money each week to top up the investment, others have surplus income and have the ability to top up the investment.
People will buy for capital growth alone and others will buy for cash flow, some of Blue Wave’s clients like to add value and force the capital growth from day one. This is one of my favorite approaches; such as building a duplex – where you start out with one property and on completion you strata title them and end up with two properties which are of course worth more than the single property.
The property market and the demographics are also going to help you make the decision on what is the right investment property for you to own. If you are looking at property in the inner city then your demographic is probably not going to be a 4 person family with mum, dad and two kids, so investing in a 4 bedroom house in this area would not be the best idea. However investing just a couple of km, out from the city centre in an affluent blue chip area might be the way to go. The price might be higher and your rental return might be under 5% yield so not a great option for cash flow but excellent for long term growth.
If fast tracking your investment is what you prefer – then doing an advanced strategy project where you build a duplex, dual occupancy or maybe a splitter block – will be a better idea, this will allow you to add value from the completion of the project. It does require a little more cash initially than the standard house & land or unit, however at the end you could be accessing the equity and be able to pull out your full deposit giving you a 100% return on your money within 12 months.
When first starting out you need to know your numbers and what your budget is, this will affect the type of property you purchase. You will need to look at the tenancy possibilities, what sort of tenant you want and what is the highest yield you can achieve. Look for employment opportunities, infrastructure projects and what your target tenant is going to want when the property is complete or when looking for an existing property.
There is no one mold that fits everyone and the type of property and area will vary depending on your goals, desires, dreams and aspirations. If you want to have a talk with someone about what type of property would suit you and knowing your numbers then don’t hesitate and give Blue Wave Property Strategies a call and let us help you Ride the Wave to Wealth