What to look for in an investment property
Buying an investment property is different to buying a house to live in.
The main goal of buying an investment property is generally to generate a passive income and grow wealth.
Therefore, when you are considering an investment property there are a few key things to look for.
>> READ MORE: 4/64 CARLYLE STREET, MACKAY
1. Capital growth
Capital growth is essentially the increase in the value of the investment property over time.
Capital growth can help you get an idea of what your capital gains – how much you will financially gain based on the investment property’s capital growth – will be over time.
When considering an investment property, look into the growth-trend indicators such as median sale price for the suburb, past sales in the area, median rental income as well as demographic information and nearby conveniences.
All this information helps to build a picture of what your capital gains may look like.
2. Yield and rental demand
The idea of an investment property is generally to rent it out to generate income and help cover costs.
Therefore, knowing areas with strong rental demand and yield is key when assessing an investment property’s financial viability.
Essentially, rental yield is a calculation of the expected rental income against the costs of owning and maintaining the investment property. Such costs include mortgage repayments, council fees, insurance, strata fees and maintenance.
To calculate the gross rental yield of an investment property, take the total value of the property and divide it by the expected annual rent then multiply that figure by 100 to get a percentage.
Net rental yield factors in costs and fees such as depreciation, insurance, strata levies, council and property management fees and therefore the calculation is a little more complex.
3. Property type and location
There are two main types of investment properties: houses and units. Which one you buy will largely depend on your budget.
Houses are generally more expensive to buy, insure and maintain but they have a higher capital growth and can fetch higher rents on average.
While units are generally cheaper to buy and require less maintenance but come with other costs such as strata fees.
Also, consider the investment property’s location. Neighbourhood safety, proximity to schools, shops, public transport and other amenities are all important factors to consider when choosing an investment property.
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4. Property age
The age of the property can have an effect on the cost equation in two ways.
Firstly, properties that are older might need more maintenance. It all depends on the condition so make sure you get all the relevant checks from professional building and pest inspections before committing to a contact of sale.
Secondly, the age of a property will affect its depreciation schedule. This is a calculation of how much the value and contents of the investment property will decrease over time.
5. Property features
Lastly, when choosing an investment property, its features – things like additional bathrooms or home office – can increase rental value.
When considering an investment property look for all the features a tenant might look for in a home.
All that said, if you are looking for an investment property in Mackay, this one in Blacks Beach is a winner.
At $379,000 with long-term tenants paying $500p/wk, that’s a 7% gross yield!
>> READ MORE: 17 CABLE COURT, BLACKS BEACH
Fantastic investment property in Blacks Beach
Attention investors! If you have been looking for a fabulous investment property, then look no further than this lovely four-bedroom, two-bathroom home at the end of a quiet court in highly-sought after Blacks Beach.
This decade-old, neat and tidy render and Colorbond home is within walking distance of Blacks Beach Constructed Wetlands and an enclosed playground with equipment, an undercover entertaining area and a large grassy park.
Well positioned on a fully fenced and secured 432m2 block at the end of a quiet court, surrounded by other well-maintained family homes in a sought-after suburb in Blacks Beach, this property is perfect for you and your family.
There are three-generous sized bedrooms each with ceiling fans, built-in wardrobes, windows with blinds, quality carpet and cream-coloured walls. The lovely master bedroom is similarly appointed but boasts split system air conditioning, a walk-in robe and a private ensuite with shower, vanity and toilet while the stylish and modern family-sized bathroom features a full-sized bath, glass-enclosed shower, large vanity and a separate toilet.
At the heart of this home is the light and airy open plan living/dining and kitchen area that flows out onto the undercover outdoor entertaining area. The cleverly designed U-shaped kitchen has ample under-the-bench and overhead storage, a full-sized pantry and a generous breakfast bar and has been well-appointed with an oven, glass cooktop and stainless steel appliances.
Family mealtimes will be a breeze and well connected with the kitchen only steps from the dining area, featuring room for a six or eight-seater table, and overlooking the dedicated lounge room with plenty of space for a couch, accent chairs, coffee table and wall-mounted TV.
With windows on one side and large sliding glass doors at the end and quality tiles throughout, this open-plan area is cool, light-filled and easy to keep clean. This home also features security screens throughout, a large water tank and a level, grassy, fully-fenced backyard.
Within minutes of one of Mackay’s most popular beaches, Blacks Beach with an excellent park, barbecue facilities and playgrounds and only a short stroll from the wetlands and another playground, the kids will love living in this family-friendly location. And only 20 minutes from Mackay CBD, this property presents an exclusive opportunity for convenient beachside family living.
Some of the benefits of this four-bedroom family home near parks and playgrounds:
> Three generous bedrooms
> Master suite with walk-in robe and en-suite
> Family-sized bathroom
> Two toilets
> Double lock up garage
> 432m2 block
> Property is fully fenced and secured
> Generous-sized backyard
> Ceiling fans and split system A/C
> Built-in robes
> Dishwasher
> Outdoor entertaining area
> Close to parks, paths and the Northern Beaches
> Short drive to Blacks Beach Shopping Complex
To take advantage of this exclusive opportunity to secure this property for just $379,000 with an exceptional yield of $6.8% with current tenants in place at $500/week until July 2023, contact Benjamin from Baileux today, to arrange your inspection or to submit your offer Ph. 0400 989 161 or benjamin@baileux.com.au
See a full list of all properties for sale with Baileux here.
